Non-conviction based forfeiture
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El desmantelamiento de la recuperación de activos en el Perú: Un llamado a la cautela y a la construcción de consensos en torno al Proyecto de Ley 3577-2022
El Basel Institute on Governance, como entidad internacional dedicada a promover la buena gobernanza y a combatir la corrupción, ha seguido de cerca los avances legislativos en materia de recuperación de activos en el Perú y en América Latina. En este sentido, advertimos el importante retroceso que significaría la aprobación del Proyecto de Ley 3577-2022, que busca modificar la Ley de Extinción de Dominio, desnaturalizando su contenido y reduciendo su ámbito de aplicación de manera contraria a la política criminal vigente y a los estándares internacionales que el Perú como Estado está obligado a respetar. Con no poco esfuerzo, el Perú se ha logrado ubicar entre los países más destacados en materia de recuperación de activos en los últimos años, tanto al nivel doméstico como internacional, generando la admiración de la comunidad internacional en esta materia. Testimonio de esto son los números casos internacionales que Perú ha conseguido ganar desde la puesta en marcha del sistema nacional de recuperación de activos. Uno de los factores clave, es sin duda la Extinción de Dominio, una ley regional que permite la recuperación de activos ilícitos, fuera de un proceso penal, cuando un Tribunal reconoce su carácter ilícito. El Proyecto de Ley 3577-2022 significa el desmantelamiento del subsistema de Extinción de dominio por varias razones, entre las principales: Desnaturaliza al instituto jurídico del decomiso sin condena. Al introducir como condición básica para su aplicación una condena penal, el Proyecto vuelve a la actual ley inútil en su aplicación e introduce una contradicción fundamental que carece de lógica y de justificación jurídica aparente. Debilita, entiéndase desmantela en la práctica, el subsistema descentralizado de Extinción de dominio. Desde la adopción de la ley en el 2019, el Perú, con el apoyo de la comunidad internacional y las organizaciones internacionales especializadas en esta materia, ha realizado denodados esfuerzos para crear un subsistema único en la región que implicó la creación de fiscalías, procuradurías y juzgados especializados descentralizados. Lo que inicialmente se concibió como una buena práctica internacional, quedaría sin efecto práctico si se reduce abruptamente el ámbito de aplicación de la ley como pretende hacer el Proyecto de ley. Graves consecuencias reputacionales y económicas para el Perú. Desde la adopción de la Convención de las Naciones Unidas contra la Corrupción CNUCC en el 2003 – pero particularmente desde noviembre del 2023 con la adopción de nuevos estándares globales en materia de recuperación de activos – el decomiso sin condena del cual hace parte la Extinción de Dominio se ha convertido en un estándar internacional. En efecto, las nuevas recomendaciones 4 y 38 del Grupo de Acción Financieras Internacional GAFI , una organización global de lucha contra las finanzas ilícitas, introduce de manera obligatoria la adopción de leyes como la Extinción de dominio en los países miembros. El Proyecto de ley es contrario a la letra y el espíritu de estas recomendaciones y las contradice profundamente. En ese contexto, cabe señalar que el Perú se apresta a pasar la 5ta ronda de evaluaciones del GAFI y es de esperarse que este retroceso legislativo afecte notablemente su performance y, por tanto, los resultados de la evaluación. Las consecuencias de lo anterior, podrían traer consecuencias reputacionales y económicas importante para el Perú. Favorece el desarrollo del crimen organizado y violento en el Perú. Uno de los elementos clave de las leyes de recuperación de activos es la disuasión. La evidencia empírica demuestra que las organizaciones criminales se desarrollan en países que carecen de estas herramientas jurídicas indispensables. Es de esperarse por tanto que el debilitamiento de la ley de Extinción de dominio, tendrá un impacto certero en la expansión del crimen organizado en el Perú, con consecuencias difíciles de estimar. Por los motivos antes esgrimidos, el Basel Institute on Governace hace un llamado a la reflexión y a la búsqueda de consensos en beneficio de la ciudadanía y de la justicia del Perú. En particular, se hace un señalamiento a las autoridades legislativas competentes, las autoridades judiciales, los colegios profesionales y a la sociedad civil organizada de las graves consecuencias que la adopción del Proyecto podría tener en el Perú. Si bien se debe reconocer que en la implementación del subsistema se han podido identificar algunas disfuncionalidades consideramos que la solución debe transitar por otros senderos que los que plantea el Proyecto. Por otro lado, no es inhabitual que la implementación de un sistema tan complejo, que introduce además un cambio paradigmático en las reglas de la justicia, haya generado dudas y reacciones de todas las partes interesadas. Consideramos, sin embargo, que dichas disfuncionalidades emergen en el contexto de la aplicación de la ley y no necesariamente en su concepción o legitimidad jurídica y social, ya que, como se ha dicho, este tipo de leyes constituye un estándar internacional reconocido, incluso por los tribunales internacionales en materia de derechos humanos. Por lo expuesto, consideramos que la aprobación del mencionado proyecto es apresurada y requiere mayor debate, reflexión y la generación de consensos. El Basel Institute on Governance se pone a disposición del Estado peruano para colaborar en este proceso, brindando asistencia técnica y compartiendo nuestra experiencia internacional. Creemos que una reforma integral de la Ley de Extinción de Dominio debe ser una oportunidad para fortalecer el Estado de Derecho y recuperar los activos ilícitos en beneficio de la sociedad peruana. Oscar Solorzano Director del Basel Institute-Perú Más información Descargue este texto PDF . Lea nuestro Working Paper 54: Targeting illicit wealth through non-conviction based forfeiture: Identifying human rights and other standards for Latin America. Lea la Guía de Buenas Prácticas sobre Extinción de Dominio y Decomiso no Basado en Condena y un blog relacionado de Oscar Solórzano. Consulte también nuestra YouTube playlist sobre la recuperación de activos en América Latina.
New GAFILAT guide: Why asset recovery laws need to align with human rights and other international standards
A new guide to non-conviction based forfeiture published by GAFILAT, the Latin American body of the Financial Action Task Force FATF sets out good practices for this powerful but under-used form of asset recovery legislation. It also emphasises the need for laws to align with both domestic constitutions and international human rights standards. The GAFILAT guide was drafted by Oscar Solórzano in collaboration with the region’s Asset Recovery Network RRAG . Oscar is Head of Latin America at the Basel Institute on Governance and a Senior Asset Recovery Specialist with many years of experience supporting government partners across Latin America in high-profile, complex cases of corruption and asset recovery. In this Q&A, he explains the approach, relevance and impact of the Guía de Buenas Prácticas sobre Extinción de Dominio y Decomiso no Basado en Condena , which was published by GAFILAT in 2024 and financed by EU member states through the COPOLAD III cooperation programme. COPOLAD III is a consortium led by the Italo-Latin American Association IILA and FIIAPP of the Spanish Cooperation. 1\. What is the guide about and who is it for? This is a guide to good practices in non-conviction based forfeiture for Latin America. It analyses the existence and implementation of non-conviction based forfeiture mechanisms in the 18 GAFILAT countries, which provided useful data during the drafting process and very detailed comments during the review. The guide contains an analysis of economic criminality in Latin America and the public policy response. It also addresses the essential concepts and standards applicable to non-conviction based forfeiture, presents case studies and explores available data from GAFILAT countries. Policymakers, legislators, law enforcement and judicial practitioners, law students and civil society – including journalists who report on these complex topics – will benefit from the guidance. 2\. Why is there a need for guidance? The expansion of non-conviction based forfeiture legislation has accelerated in Latin America in recent years, and not necessarily in the most coordinated or harmonised way. In line with the updated FATF standards relating to asset recovery, it is expected that it will continue to expand in the region. In effect, the FATF’s updated Recommendations 4 and 38 make the adoption of non-conviction based forfeiture laws mandatory and seek to ensure that decisions based on these laws can be enforced internationally. The guide therefore appears at an ideal time. It proposes a way to harmonise this type of law while respecting the legislative diversity that exists in the region. 3\. The idea is that non-conviction based forfeiture can reduce economic and organised crime – even without the threat of criminal convictions. Can you justify that? Economic crimes are perpetrated for the purpose of obtaining illicit economic advantages. Laws that reduce such economic advantages are a concrete step forward. And jurisdictions with more powerful and varied legal tools are more likely to see their crime rates decrease, simply because there is a concrete societal response to the criminal phenomenon. Without comprehensive asset recovery laws and an effective judicial apparatus to implement them, various incentives for engaging in profitable criminal activity arise. Some studies show that the lack of effective legal mechanisms targeting criminal assets has, among other things, allowed an explosion of organised and economic crime in Latin America in all its manifestations. The same goes for the growth of public-sector corruption. Assets stolen through corruption have rarely been confiscated in the past, when asset recovery was only possible in the context of criminal proceedings. It is naïve to think that a legislative instrument alone can change the reality of crime in Latin America, where the most fearsome drug cartels operate and, according to all international indices, corruption is rampant from north to south. However, the empirical experience I have gathered while working for almost 15 years in this part of the world indicates that there is a positive difference in the criminal situation of countries that effectively implement asset recovery mechanisms. A robust legal toolkit for asset recovery also alters the behaviour of criminal organisations, which have to bear higher costs to develop more sophistication in their criminal activities or simply relocate their activity to jurisdictions less equipped with legal tools and the ability to wield them. In Peru, to take a positive example, non-conviction based forfeiture is proving a powerful way to get at numerous politicians who have been accused of corruption, but where criminal proceedings seem to be never-ending. The independence of Peru’s non-conviction based forfeiture law from criminal procedures allows prosecutors to target assets even if their owners inevitably slip through the nets of justice. 4\. What does the guide show about the prevalence and success of different forms of non-conviction based forfeiture in the region? On paper, there has been a lot of progress in the adoption of non-conviction based forfeiture in Latin America. Only two countries in the region do not have any form of non-conviction based forfeiture law. The most predominant form is arguably Extinción de dominio, which has existed for 13 years. Ten out of the 18 countries have incorporated it into their legal arsenals and apply it in various forms and degrees. Extinción de dominio is a flexible law that can operate in civil, criminal or administrative matters, or even completely independently. It has developed specific concepts that make it possible to broaden the grounds for asset forfeiture. It lists an extensive catalogue of rights of the defence which, as stated in the Guide, seem to go far beyond the internationally established standard. In practice, however, recovery rates remain modest in relation to the volume of criminal assets generated in and flowing through the region. The best practices guide argues that a lack of effective implementation of existing laws partially explains the poor performance. The quality of implementation is influenced by political, economic and social interests. These are not necessarily addressed in the guide, which limits itself to technical and legal issues. However, the guide proposes some concepts and comparative practices that have the modest objective of guiding national authorities in applying this indispensable tool. 5\. What are success factors and challenges? In many Latin American countries, non-conviction based forfeiture is only taking its first baby steps. But from a Darwinian perspective of law – i.e. survival of the fittest – I observe that the laws that thrive are those that align with international standards and the constitutional rights of the countries that adopt them. In other words, those laws that develop around recognised global standards and practices but that are also designed to work in specific local contexts. Since 2020, together with my colleagues and many passionate and competent local partners, I have implemented programmes promoting non-conviction based forfeiture laws in the region. That experience has helped me to see that there is a group of countries that have what we can call a “European” approach to the issue, and whose laws apply only in a narrow set of scenarios. Others have more hard-hitting practices that evoke the laws used in countries such as the United States, and have transposed common law practices and principles into civil law frameworks without further reflection. Despite an increase in asset recovery rates, in many cases this has led to distortions and challenges, which are partially explored in the guide. 6\. What does the guide tell us about non-conviction based forfeiture in international cases? International asset recovery is a very different animal from domestic asset recovery and has political implications. That said, since 2014 several Latin American countries have tried to pierce the once impenetrable veil of the European financial system with non-conviction based forfeiture procedures. Switzerland and then Luxembourg were the first European countries to accept these laws as valid, in particular in relation to decisions based on Extinción de dominio. Today, almost all countries accept provisional measures based on these laws and some can directly enforce the resulting decisions. Even if the practice of enforcing non-conviction based forfeiture judgments is not abundant, we hope that the new standards adopted by the FATF on this matter will help to accelerate international asset recovery. 7\. The guide emphasises the need to align laws with international human rights standards. Why? In my opinion, this is fundamental. It is inconceivable that the ideals of justice can be achieved to the detriment of human rights. Rather than a random matter left to the discretion of states, respecting human rights in the adoption of non-conviction based forfeiture laws is an international treaty obligation. Most countries adhere to the so-called control of conventionality doctrine, i.e. the obligation to align any domestic legal instrument or practice with binding rules arising from international treaties such as the American Convention of Human Rights. This presupposes that the adoption of any domestic rule and practice on non-conviction based forfeiture must respect human rights and the practice of human rights courts. This is a condition sine qua non of any asset recovery law. The guide cites two examples of setbacks to the use of non-conviction based forfeiture laws in the region on the basis of human rights deficits. We can agree or disagree with the premises used by the countries’ High Courts to reach their conclusions. But what is clear is that a lack of consideration for human rights can also play a paralysing role. This challenge is vividly illustrated in Peru right now, where the Ombudsman has filed a claim against the use of non-conviction based forfeiture with the Constitutional Tribunal on the grounds that it could violate the right to property and the principle of the presumption of innocence. On a more positive note, a human rights lens can enhance the application of this type of law, especially in the context of international cooperation. On the one hand, more attention to human rights brings more legitimacy and acceptance to laws and therefore better recovery rates. On the other hand, a human rights lens also offers national legislators the ability to adopt more incisive standards when there are, for example, elements of organised crime or other exceptional conditions that make the application of some human rights more flexible. 8\. How does the guide help navigate the human rights topic in practice? As the guide explains through a study of the jurisprudence of the European Court of Human Rights, the issue is constantly evolving. The guide provides Latin American legislators and practitioners with examples of how to develop the human rights approach in a clearer way and enables them to critically review concrete non-conviction based forfeiture cases in various parts of the world. It emphasises two human rights that are central to non-conviction based forfeiture: the right to property and the right to a fair trial. This will be enormously beneficial in ensuring that new or revised non-conviction based forfeiture laws in Latin America are in line with the updated FATF Recommendations. The guide advocates for the adoption of laws that are in harmony with human rights principles and specifies that their international enforcement is a recognised standard. Similarly, the interpretative notes to the revised FATF Recommendations 4 and 38 – and the very coherence of the FATF system – indicate that the respect for human rights is fundamental to the adoption and application of these laws. The human rights perspective is likely to be an important element in the forthcoming fifth round of FATF Mutual Evaluations in GAFILAT countries, where the technical compliance and effectiveness of these laws with FATF standards will be under the microscope. Learn more See the Guía de Buenas Prácticas sobre Extinción de Dominio y Decomiso no Basado en Condena . Read a related blog by Oscar Solórzano: FATF seeks to change the landscape of international asset recovery: what this means for Latin America.
New funding agreement strengthens asset recovery efforts in Mozambique
The Basel Institute's technical assistance to the Prosecutor General’s Office in Mozambique will now continue through 2027, thanks to a second-phase agreement with the Swiss Agency for Development and Cooperation SDC , Mozambique office. Since 2018, our locally based team has been helping to build the capacity of the Prosecutor General's Office to investigate and prosecute corruption and related financial crimes, as well as to recover stolen assets. Training support was extended to the country’s Criminal Police in 2022. The programme is primarily funded by SDC and is implemented through our International Centre for Asset Recovery ICAR , which also benefits from core funding from the Governments of Jersey, Liechtenstein, Norway, Switzerland and the UK. The key priorities of the programme are targeted training and mentoring; support with civil confiscation legislation; and institutional development. Phase one achievements: strengthened investigation capacity and legislative framework The most significant achievements of the first phase of the intervention 2019–2023 include the strengthened financial investigation capacity embodied by the Central Asset Recovery Office GCRA , an entity created and made operational during the programme period. The country also made significant progress in legislative and policy reform, including the introduction of an extended forfeiture regime, a new law to strengthen the country’s AML/CFT framework and improvements to the country’s penal and penal procedural codes. Draft civil confiscation legislation is currently with the Council of Ministers for submission to Parliament. Once adopted, Mozambique will be the first Portuguese-speaking country in the world to have civil confiscation legislation. ICAR experts also delivered training to over 1,500 prosecutors, criminal investigators, financial investigators and judges on topics related to anti-money laundering, corruption, extended asset forfeiture, international cooperation, asset recovery and criminal investigation techniques. Phase two priorities: targeted training and institutional development The second phase of the programme will focus on three main areas: Continuing our collaboration with Mozambique's authorities to enhance the legal and institutional framework for anti-corruption, financial and economic crime and asset recovery, including supporting them with the approval and implementation of the civil confiscation law. Continuing our contribution to institutional strengthening by advising on the creation of further specialised entities within the Prosecutor General’s Office, and providing support the Asset Recovery Unit. Enhancing the skills of the staff of anti-corruption institutions, especially prosecutors and criminal investigators, both at the national and provincial levels. Through specialised training and on-the-job mentoring we will improve capacity for the investigation and prosecution of corruption, financial crime and asset recovery, including financial investigations and mutual legal assistance, with an emphasis on provinces where such types of crime are concentrated. Contributing to an environment that deters corruption Our intervention is part of a wider SDC-funded anti-corruption programme that seeks to reduce the political, economic and social costs of corruption on development for Mozambique by creating an environment that deters engagement in corrupt practices by public servants, office holders, private companies and citizens. Other partners include the Ministry of Economy and Finance, UNODC and the Centro de Integridade Pública. Our ICAR team is assisting with coordination of the consortium in the new phase. “The Asset Recovery and Management Offices and the strengthening of anti-corruption legislation are among the achievements of the first phase of the programme, and we commend the staff of the Prosecutor General's Office, the Ministry of Economy and Finance, ICAR and UNODC experts for their work. We expect that the second phase will continue to improve the legislation on international legal and judicial cooperation in the fight against corruption, including through the adoption of the Law on Civil Forfeiture. We hope that the programme will also continue to improve the quality of criminal, financial and asset investigations.” – Ilaria Dali-Bernasconi, Head of Cooperation, Embassy of Switzerland in Mozambique “The results presented here underline the undeniable contribution of the cooperation and support programme to strengthening Mozambique's capacity to combat corruption and economic and financial crime and recover assets. From the creation of the Central Asset Recovery Office GCRA to the training of its staff... We praise the efforts made by the \ ICAR\ team… that culminated in the approval by Parliament of the Asset Recovery Law. The results show the fulfilment of the agreement's objectives, the gains the country has made in the fight against corruption, which contributes to the country's development, the respect and integrity of the state and the well-being of our people.” – Alberto Paulo, Deputy Public Prosecutor General of Mozambique Learn more Download a flyer about the programme
The Quispe Callo case: Peru’s provincial prosecutors recover corrupt assets through non-conviction based confiscation
Authorities in Cusco in southeast Peru have succeeded in recovering a house and land linked to acts of corruption by the former mayor of the province of Canchis, using a recently introduced non-conviction based forfeiture law. Specialised Prosecutors working with asset recovery specialists of the Programa GFP Subnacional were able to prove that land was purchased, and the house built, with proceeds of corruption. The assets were confiscated under Peru’s law of Extinción de Dominio , a form of non-conviction based confiscation law targeting illicit assets separately from criminal proceedings. The judgment under the Extinción de Dominio law is the first obtained by Peruvian authorities at the subnational level with the support of the Programa GFP or Subnational Public Finance Management Programme of the Swiss SECO Cooperation in Peru, implemented by the Basel Institute on Governance. Corruption doesn’t pay The successful recovery of the assets demonstrates – to corrupt officials as well as to citizens – that corruption does not pay. It also indicates the value of having a robust non-conviction based confiscation law and system at the subnational level. While criminal proceedings against the mayor are ongoing, they typically take much longer to complete than non-conviction based proceedings, which use a lower civil standard of proof. In the meantime, valuable assets such as the corruptly obtained land and house cannot be recovered, and even have to be managed and maintained to avoid a depreciation in value. The Basel Institute supported the Peruvian authorities in the drafting and enactment of the law in 2018, as well its implementation since then via a national “subsystem” of specialised courts, tribunals and prosecutors’ offices. As well as targeted capacity building and case-based mentoring, our team has organised peer learning events such as major two-day convention of judges specialised in the use of this law. In the prosecutor’s words Dr. Sergio Jiménez, who leads the team responsible for asset recovery assistance at the subnational level under the long-running programme, spoke to Dr. Yolanda Inquiltupa Calvo about the significance of the "Quispe Callo", named after the former mayor Jorge Quispe Callo. Dr. Inquiltupa Calvo is Provincial Prosecutor for Extinción de Dominio in Cusco. Read or watch the original interview in Spanish. Dr. Inquiltupa, the Extinción de Dominio law came into force five years ago. How important is this tool for Peru in general and for Cusco in particular? Very important. Reality has taught us that criminals are not deterred by the prospect of a conviction. It is not a problem for them to go to prison if they can get out and still enjoy the assets they have acquired illicitly. This is where non-conviction based confiscation comes into play. Through a judicial process that takes place in court, we are able to confiscate assets that have been acquired with proceeds of crime. We can also confiscate assets that were used to facilitate the commission of crimes. The assets are being returned to the public treasury for the benefit of citizens. Why is the decision in the Quispe Callo case important and what message do you think it sends out? This ruling is very special. We launched the Extinción de Dominio case after learning of a police investigation into the former mayor Quispe Callo together with other public officials. We were then able to identify assets that he had acquired, both himself and also jointly with his partner. In the ruling, it was established that not only had the land been acquired with funds arising from public-sector corruption, but also the construction of the house itself. The total value was approximately PEN 350,000 just under USD 100,000 . Can you tell us about your collaboration with the Basel Institute’s asset recovery specialists in this case? For us, as an asset recovery office, the support provided by the Basel Institute on Governance through the Programa GFP Subnacional is very important. First, for the technical assistance related to specific cases. Second, for the more general assistance in improving our effectiveness and productivity. In this case, the team supported us in the analysis of the case, in the review of the evidence and in the coordination required to gather more information. As a result, we were able to jointly draw up a very well prepared action plan that allowed us to identify the illicit assets and launch proceedings to confiscate them. In your opinion, what can we look forward to in terms of asset recovery through Extinción de Dominio and what does it mean for the targeting of criminal behaviour? I foresee a very promising outlook for Peru in terms of asset recovery. This is not only because of the progress we have made at the provincial level here in Cusco. At the national level, where the law is being used by different entities of the Peruvian system, asset recovery is advancing by leaps and bounds. I understand that we have more than 600 judgments at the national level, and we have already recovered assets in excess of USD 60 million through this law alone. Where nothing was happening before, now we are finally seeing progress. What we are trying to achieve with this is to bring about a change in thinking – a change in the perceptions of citizens around crime and corruption. The general perception is that crime is lucrative. We want to reverse that, so that citizens know that crime does not pay. Learn more Learn more about the Programa GFP Subnacional in Spanish or English. Learn more about the work of our International Centre for Asset Recovery
Working Paper sheds fresh light on the sanctions and confiscation debate
As the war in Ukraine intensifies, calls are growing for states to confiscate Russian assets frozen under sanctions and redirect them to provide support to Ukraine. Our latest Working Paper argues that states can and should do this by enhancing the effectiveness and scope of established asset recovery measures – not by introducing new untested mechanisms that risk inviting future legal challenges, defeating the purpose of sanctions and violating the rule of law. Go straight to Working Paper 42: From sanctions to confiscation while upholding the rule of law or read the key takeaways: Executive summary In light of recent world events, political leaders around the world have questioned whether it is justifiable to confiscate assets frozen under financial sanctions in order to redirect them to the victims of state aggression. Some states have even sought to introduce legislative mechanisms to make it possible to confiscate an asset frozen under sanctions, purely on the basis that the asset has been made subject to a sanction. One state – Canada – has already done so. The intention behind these mechanisms is clear: assets frozen under sanctions could be confiscated and repurposed to provide assistance and compensation to the victims of the sanctioned target. In the context of the Ukraine war, for example, proponents argue that these measures will allow states to permanently confiscate Russian-linked assets under sanction and redirect them to provide support to Ukraine. The debate Should states be able to confiscate sanctioned assets\ purely on the basis that they have been sanctioned? The justifiability and legality of mechanisms such as Canada’s is currently the subject of debate. Two key issues include whether the confiscation of assets in such circumstances: is acceptable in the context of established legal rights and norms; defeats the primary purpose of sanctions as a tool of coercion. Issues of property and due process rights With regards to the first point, the lack of adequate judicial oversight included in such mechanisms, and the fact that these mechanisms aim to permanently deprive sanctioned targets of their assets, raises serious questions surrounding property and due process rights. If such a mechanism was introduced in Europe for example, it is likely to be challenged on the grounds that it violates Protocol 1 Article 1 as well as Article 6 of the European Convention on Human Rights. If such mechanisms were also applied to state-linked assets such as sanctioned assets belonging to central banks then this would also raise concerns regarding a possible infringement of domestic and international laws relating to state immunity. Undermining the purpose of sanctions With regards to the second point, permitting the confiscation of sanctioned assets arguably annuls the coercive purpose of sanctions regimes to act as a tool to persuade targets to cease their adverse behaviour. If states are permitted to confiscate sanctioned assets and make it impossible for a target to retrieve their frozen assets then this effectively removes any incentive for the target to change their behaviour. In such cases, rather than operating as tools of coercion, sanctions would instead primarily operate to punish a target and provide compensation to the victims for the harm that has been caused. Of course, some have argued that there is a greater need for these latter objectives, particularly in the context of the war in Ukraine where financial assistance is required urgently. Others however argue that despite the urgency this situation presents, the long-term objective of sanctions should remain coercion, particularly if sanctioning states wish to compel the aggressing state, Russia, to contribute to post-war reconstruction efforts in the future. Other options through which to confiscate assets under sanction There are, in addition, several established avenues for seeking war reparations that should also be explored. Such established measures that states could adopt and apply to target sanctioned assets include: Traditional conviction-based confiscation measures, including ‘extended confiscation’ mechanisms Non-conviction based confiscation NCB measures Unexplained wealth laws These measures could be used to target: Assets that are involved in sanctions violations Sanctioned assets that are also the proceeds of crimes unrelated to the sanctions regime, such as corruption or organised crime offences Unexplained wealth Maximising effectiveness of established asset recovery mechanisms While these avenues may be limited, and can only result in the permanent confiscation of a portion of sanctioned assets, states could take various steps to maximise their effectiveness. For example legislative amendments could be considered to broaden the scope of relevant terms like ‘money laundering’ and to specifically permit confiscated assets to be redirected to the victims of state aggression. Domestic and international coordination could be improved by creating dedicated law enforcement bodies for example, or through participating in international coordination initiatives. Importantly, these avenues target established criminal activity and/or include defined judicial processes through which a targeted person can challenge any attempts to confiscate their property. Therefore they can be applied without unacceptably infringing on legal rights. Moreover, if states take measures to enhance the effectiveness and scope of established asset recovery measures, additional benefits can be derived for the broader fight against financial crime and kleptocracy. The bottom line: maintaining the rule of law Opting for mechanisms that abide by established legal rights will not only significantly increase the chance of recovering assets without subsequent legal challenges. It will also ensure that the very reason for targeting the assets in the first place – namely to seek justice and compensation for acts of aggression – is not undermined through the erosion of the rule of law. \ The term ‘sanctioned assets’ is used as a shorthand to refer to assets of a sanctioned person or country. Learn more Download the Working Paper. Watch or read the main takeaways from a December 2022 panel discussion on asset recovery developments since the start of the war in Ukraine.
Publications
Case Study 13: The Beauty Queen case: non-conviction based forfeiture across borders
This Case Study analyses how Colombian authorities recovered assets linked to drug trafficking and held in a trust in Guernsey. It sets out the legal tools and procedures in Colombia and in Guernsey that enabled Colombia’s first international recovery under its non-conviction based forfeiture model Extinción de dominio. The Case Study highlights lessons for international cooperation between jurisdictions with different forfeiture systems or even legal traditions.
The International Centre for Asset Recovery (ICAR) at the Basel Institute on Governance provided technical assistance as part of a Memorandum of Understanding with the General Prosecutor’s Office of Colombia.
On 30 November 2023, the Fourth Court of the Specialised Extinción de Dominio Circuit of Colombia ordered the non-conviction based forfeiture of a Guernsey trust account issued by Northern Trust Fiduciary Services (Guernsey) Limited. The beneficiary was María Marcela Serrano Camacho, a Colombian model and former beauty queen.
The Colombian forfeiture order extinguished property rights over the account – amounting to GBP 361,146 – on the grounds that the funds were the proceeds of drug trafficking offences committed by Efraín Antonio Hernández Ramírez (“Don Efra”), a well-known Colombian drug trafficker, and his former spouse María Serrano in the 1990s.
On 30 January 2025, following successful mutual legal assistance proceedings between Colombia and the Bailiwick of Guernsey, the two jurisdictions concluded an asset sharing agreement for the repatriation of the confiscated assets.
This marked Colombia’s first successful international recovery through non-conviction based forfeiture.
This Case Study examines how early and effective coordination between Colombia and Guernsey enabled the identification, freezing, forfeiture and repatriation of the assets. It analyses the legal framework underpinning Colombia’s Extinción de dominio regime and how it was applied, leading to the forfeiture of the Guernsey acccount. It also describes the procedural mechanisms used in Guernsey to execute foreign non-conviction based forfeiture orders.
The interaction between the authorities in both jurisdictions offers valuable lessons and examples of good practices.
Main takeaways of the case:
- Early and trust-based international cooperation is decisive
- Non-conviction based forfeiture is indispensable when criminal routes are closed
- Identifying beneficial ownership is central to effective asset recovery
- Direct enforcement of foreign forfeiture orders increases efficiency and legal certainty
- Asset sharing agreements strengthen cooperation incentives
The Case Study can be read alongside Policy Brief 16: “Enforcing foreign non-conviction based forfeiture orders: FATF standards and asset recovery practice in Latin America and financial centres”.
About this Case Study
This publication is part of the Basel Institute on Governance Case Study series, ISSN 2813-3900. It is licensed for sharing under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BYNC-ND 4.0).
The Case Study series offers practitioners insights into interesting and precedent-setting cases involving corruption and asset recovery.
This is a publication of the International Centre for Asset Recovery (ICAR) at the Basel Institute on Governance. ICAR receives core funding from the Governments of Jersey, Liechtenstein, Norway, Switzerland and the UK.
Disclaimer: This Case Study is intended for general informational purposes and does not constitute and/or substitute legal or other professional advice. The contents are the sole responsibility of the authors and do not necessarily reflect the views or the official position of the Basel Institute on Governance, its donors and partners, or the University of Basel.
Policy Brief 16: Enforcing foreign non-conviction based forfeiture orders
This Policy Brief analyses emerging international standards aimed at addressing recurring challenges in judicial practice with regard to the enforcement of non-conviction based forfeiture orders issued by foreign states. It focuses in particular on the historical absence of a binding obligation on requested states to cooperate in such cases and, where cooperation is available, on the structural tension between direct and indirect enforcement models.
Revisions in 2023 to the Financial Action Task Force (FATF) Recommendations 4 and 38 seek to clarify and strengthen states’ cooperation in the enforcement of foreign forfeiture orders. In this context, the recognition and execution of foreign non-conviction based forfeiture orders are central components of the evolving international asset recovery framework.
Through analysis and case studies involving Latin American states and international financial centres, this Policy Brief demonstrates that the choice of procedural model for enforcing foreign forfeiture orders – direct or indirect – has significant implications, while acknowledging the competing legal and institutional interests involved.
In line with FATF Recommendation 38, the Policy Brief argues in favour of direct enforcement in the requested state, based on the facts established by the foreign authority. This promotes efficiency, legal certainty and mutual trust. Indirect enforcement models that may require domestic investigations by the requested state, on the other hand, often lead to delays, duplication and increased costs, which hinders international asset recovery efforts.
The analysis provides empirical insight into how the revised FATF standards address practical deficiencies and the implications for judicial practice in requested states. For the Latin American context, the Policy Brief suggests to go beyond technical compliance of domestic non-conviction based forfeiture regimes with the FATF standards to strengthen the effectiveness of cross-border enforcement in practice.
This Policy Brief can be read alongside Case Study 13: “The Beauty Queen case: non-conviction based forfeiture across borders. Lessons learned from Colombia–Guernsey cooperation.”
About this Policy Brief
This publication is part of the Basel Institute on Governance Policy Brief series ISSN 2624-9669. You may freely share or republish it under a Creative Commons BY-NC-ND 4.0 licence.
It is a publication of the International Centre for Asset Recovery (ICAR) at the Basel Institute on Governance. ICAR receives core funding from the Governments of Jersey, Liechtenstein, Norway, Switzerland and the UK.
Disclaimer: This Policy Brief is intended for general informational purposes and does not constitute and/or substitute legal or other professional advice. The contents are the sole responsibility of the author and do not necessarily reflect the official position of the Basel Institute on Governance, its donors and partners, or the University of Basel.
Suggested citation: Solórzano, Oscar. 2026. “Enforcing foreign non-conviction based forfeiture orders: FATF standards and asset recovery practice in Latin America and financial centres.” Policy Brief 16, Basel Institute on Governance. Available at: baselgovernance.org/publications/pb-16.
Quick Guide 42: Non-conviction based confiscation
Criminals exploit legal loopholes, borders and other avenues to conceal the proceeds of their illegal activities and evade prosecution. Meanwhile, they use their illicit proceeds to buy luxury villas or increase their power and influence. Victims of crime – including communities affected by corruption – suffer the losses.
One tool to address this problem is non-conviction based confiscation: legal mechanisms that allow states to recover illicit assets even in the absence of a criminal conviction. It is also known as non-conviction based forfeiture or, in some jurisdictions, civil confiscation or civil forfeiture.
This Quick Guide outlines in simple terms how non-conviction based confiscation is used, the concerns and challenges it faces and how it can be implemented in line with established legal safeguards.
About this Quick Guide
You are free to share and republish this work under a Creative Commons BY-NC-ND 4.0 Licence. It is part of the Basel Institute on Governance Quick Guide series, ISSN 2673-5229.
Working Paper 54: Targeting illicit wealth through non-conviction based forfeiture: Identifying human rights and other standards for Latin America
This Working Paper explores the wide variety of non-conviction based (NCB) forfeiture laws in Latin America, with a special focus on the region’s predominant model, Extinción de dominio.
It argues that NCB forfeiture legislation, which allows for the recovery of stolen assets outside of criminal proceedings, can contribute significantly to a state’s criminal policy response to rampant economic and organised crime.
The paper emphasises the importance of critically reviewing and harmonising domestic practices of NCB forfeiture around emerging standards, so that they can reach their large potential in asset recovery. Ensuring their alignment with international human rights and other recognised norms and procedural rules ultimately builds trust, lends legitimacy and fosters judicial cooperation in international NCB forfeiture cases.
About this report
The paper is based on experience gained through the Basel Institute’s International Centre for Asset Recovery (ICAR), which since 2006 has supported partner countries in investigating, prosecuting and recovering assets arising from grand corruption and other crimes.
This paper is published as part of the Basel Institute on Governance Working Paper series, ISSN: 2624-9650. You may share or republish the Working Paper under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0).
Suggested citation: Solórzano, Oscar. 2024. ‘Targeting illicit wealth through non-conviction based forfeiture: Identifying human rights and other standards for Latin America.’ Working Paper 54, Basel Institute on Governance. Available at: baselgovernance.org/publications/wp-54.
Quick Guide 30: Asset recovery legislation – best practices
Asset recovery tools are integral to combatting corruption, organised crime, sanctions evasion and other profit-motivated crimes. However, in many states, the range of asset recovery tools available to law enforcement and criminal justice agencies is limited.
This quick guide examines the established good practices in asset recovery legislation as well as less conventional, broader measures. It shows how states can widen their asset recovery toolkit and increase the potential for asset recovery success.
It is drawn from a comparative study of good practices in asset recovery legislation in selected Organization for Security and Co-operation in Europe (OSCE) participating States, published as Working Paper 51 in March 2024 by the Basel Institute on Governance and OSCE.
About this Quick Guide
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. It is part of the Basel Institute on Governance Quick Guide series, ISSN 2673-5229.