A GOOD PRACTICES GUIDE FOR NON-CONVICTION BASED ASSET FORFEITURE Theodore S. Greenberg Linda M. Samuel Wingate Grant Larissa Gray Stolen Asset Recovery Stolen Asset Recovery (StAR) Initiative Stolen Asset Recovery A Good Practices Guide for Non-Conviction Based Asset Forfeiture Theodore S. Greenberg Linda M. Samuel Wingate Grant Larissa Gray Washington, D.C. © 2009 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved 1 2 3 4 12 11 10 09 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The fi ndings, interpretations, and conclusions expressed in this volume do not necessarily refl ect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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All other queries on rights and licenses, including subsidiary rights, should be ad- dressed to the Offi ce of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. ISBN: 978-0-8213-7890-8 eISBN: 978-0-8213-7902-8 DOI: 10.1596/978-0-8213-7890-8 Library of Congress Cataloging-in-Publication Data Stolen asset recovery : a good practices guide for non-conviction based asset forfeiture / Theodore S. Greenberg ... [et al.]. p. cm. Includes bibliographical references and index. ISBN 978-0-8213-7890-8 — ISBN 978-0-8213-7902-8 (electronic) 1. Forfeiture. 2. Forfeiture—Criminal provisions. 3. Corruption. I. Greenberg, Theo- dore S. K5107.S76 2009 345'.0773—dc22 2009000084 Cover design: Critical Stages Contents Contents of the CD-ROM Appendix of Legal Resources .......................................................... xi Foreword ..........................................................................................................................................xv Acknowledgments .......................................................................................................................xvii Abbreviations ................................................................................................................................xix Introduction ........................................................................................................................1 Part A Understanding the Problem and the International Response..................5 1. Theft of Public Assets: A Development Problem of the Greatest Magnitude ........................................................................................7 2. Global Consensus on the Need for Concerted Action .....................................9 The United Nations Convention against Corruption ..................................9 The Stolen Asset Recovery (StAR) Initiative ..............................................10 3. Non-Conviction Based Forfeiture as a Tool for Asset Recovery..................13 Distinguishing between Criminal Forfeiture and NCB Asset Forfeiture ......................................................................................................13 NCB Asset Forfeiture in Civil and Common Law Jurisdictions ................16 Historical Perspective and International Support for NCB Asset Forfeiture .....................................................................................................18 Appropriate Laws to Introduce Forfeiture .................................................22 Asset Recovery ..............................................................................................24 Part B Key Concepts in Non-Conviction Based Asset Forfeiture ...................... 27 Prime Imperatives .......................................................................................................29 1. Non-conviction based (NCB) asset forfeiture should never be a substitute for criminal prosecution..........................................................29 2. The relationship between an NCB asset forfeiture case and any criminal proceedings, including a pending investigation, should be defi ned .....................................................................................................30 v 3. NCB asset forfeiture should be available when criminal prosecution is unavailable or unsuccessful .....................................................................31 4. Applicable evidentiary and procedural rules should be as specifi c as possible .....................................................................................................33 Defi ning Assets and Offenses Subject to NCB Asset Forfeiture ........................37 5. Assets derived from the widest range of criminal offenses should be subject to NCB asset forfeiture ...............................................................37 6. The broadest categories of assets should be subject to forfeiture .............38 7. The defi nition of assets subject to forfeiture should be broad enough to encompass new forms of value .................................................43 8. Tainted assets acquired prior to the enactment of an NCB asset forfeiture law should be subject to forfeiture .............................................44 9. The government should have discretion to set appropriate thresholds and policy guidelines for forfeiture ..........................................47 Measures for Investigation and Preservation of Assets .....................................51 10. The specifi c measures the government may employ to investigate and preserve assets pending forfeiture should be designated ....................51 11. Preservation and investigative measures taken without notice to the asset holder should be authorized when notice could prejudice the ability of the jurisdiction to prosecute the forfeiture case ...................54 12. There should be a mechanism to modify orders for preservation, monitoring, and production of evidence and to obtain a stay of any ruling adverse to the government pending reconsideration or appeal of any order that could place forfeitable property beyond the reach of the court ..................................................................................55 Procedural and Evidentiary Concepts .....................................................................57 13. The procedural and content requirements for both the government’s application and the claimant’s response should be specifi ed ...................................................................................................57 14. Fundamental concepts such as the standard (burden) of proof and use of rebuttable presumptions should be delineated by statute ..............58 15. Where affi rmative defenses are used, defenses to forfeiture should be specifi ed, along with the elements of those defenses and the burden of proof. ...........................................................................................63 16. The government should be authorized to offer proof by circumstantial evidence and hearsay ..........................................................65 17. Applicable statutes of limitations (prescription) should be drafted to permit maximum enforceability of NCB asset forfeiture .....................66 VI Parties to Proceedings and Notice Requirements ...............................................69 18. Those with a potential legal interest in the property subject to forfeiture are entitled to notice of the proceedings ....................................69 19. A prosecutor or government agency should be authorized to recognize secured creditors without requiring them to fi le a formal claim .................................................................................................70 20. A fugitive who refuses to return to the jurisdiction to face outstanding criminal charges should not be permitted to contest NCB asset forfeiture proceedings ................................................................71 21. The government should be authorized to void transfers if property has been transferred to insiders or to anyone with knowledge of the underlying illegal conduct .....................................................................73 22. The extent to which a claimant to forfeitable assets may use those assets for purposes of contesting the forfeiture action or for living expenses should be specifi ed .......................................................................74 Judgment Proceedings ..............................................................................................79 23. Consider authorizing