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Asset RecoveryMUSA MODOI
ADVISOR, HUMAN RIGHTS AND ACCOUNTABILITY
JUSTICE, LAW AND ORDER SECTOR – MINISTRY OF JUSTICE & CONST. AFFAIRS
UGANDA
Outlay of Presentation
• Conceptual Premise
• International Legal Premise
• Tracing, Identification and Restraint
• Preservation and Management
• Forfeiture / Confiscation and Repatriation
• Legal Processes in the Ugandan Jurisdiction
• Lessons and factors for Effectiveness
Conceptual Premise
• Boucht (2017, p.1) describes the emergence of asset recovery as “a basic point of departure in criminal justice policy that a perpetrator should not profit from his crime”.
• The human rights jurisprudence has embraced asset recovery even under civil proceedings as demonstrated in many cases, as long as the tenets of legality, necessity, and proportionality are taken into account (Council of Europe, 2013).
• Dispossession remedy and creature of statute.
• Mainly conviction based Asset Recovery, but recoveries also realised during inquiries and investigations.
• Object and value based.
• Unexplored. potential of non-conviction based Asset Recovery (in rem)
International Legal Premise
• The United Nations Convention against the Illicit Traffic of Narcotic Drugs and Psychotropic Substances,1998 (Articles 5, 7, 8, and 10). – Vienna Convtn.
• The United Nations Convention against Transnational Organized Crime, 2000 (Article 12). – Palermo Convention
• The United Nations Convention Against Corruption, 2003 (Chapter 5).
• The African Union Convention on Prevention and Combatting Corruption (AUCPCC) (2003).
• Obligations on state parties to legislate and institutionalise asset recovery initiatives (articles 51-59, UNCAC, 2003; article 16, AUCPCC, 2003; and article 12-14, UNTOC, 2000).
International Legal Premise
• Inter-American Convention against Corruption, 1997;
• Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime and on the Financing of Terrorism (1990) – Revised (2005);
• Council of the European Union Framework Decision 2003/577/JHA on the Execution in the European Union of Orders Freezing Property or Evidence;
• Accra Agenda for Action (AAA) + Busan partnership – Institutional arrangements, capacity building.
• Council of the European Union Framework Decision 2006/783/JHA on the • Application of the Principle of Mutual Recognition to Confiscation Orders;
International Legal Premise
• Southern African Development Community Protocol against
Corruption (2001);
• Commonwealth of Independent States Conventions on Legal
Assistance and Legal Relationship in Civil, Family and
Criminal Matters;
• Scheme Relating to Mutual Assistance in Criminal Matters
within the Commonwealth (the Harare Scheme);
• Mercosur Mutual Legal Assistance in Criminal Matters Treaty,
June 25, 1996 (No. 12/01); and
• Bilateral MLA treaties.
International Networks and CSOs
• Regional informal networks such as; Asset Recovery Inter-Agency Network of East Africa (ARINEA), Asset Recovery Inter-Agency Network of Southern Africa (ARINSA), East African Association of Anti-Corruption Authorities (EAAACA), Eastern and Southern Africa Anti-Money Laundering Group (EASAAMLG), etc.
• UNCAC Conference of State Parties
• Inter-Governmental Working Group (IWG)
• UNCAC Open-Ended Working Group on Asset Recovery
• UN Coalition Against Corruption
• AU and SADC Anti-Corruption Convergences
• Civil Society Organisations and NGOs
Informal Methods of Asset Recovery
• The 2017 arrest of 11 princes of the Kingdom of Saudi Arabia
by officers of the a new anti-corruption committee headed by
Crown Prince Mohammad bin Salman led to the recovery of
$106.6bn (Al-Shihri and Batrawy, 2019).
• The Crown Prince proclaimed that “[l]aws will be applied
firmly on everyone who touched public money and didn’t
protect it or embezzled it, or abused their power and
influence… this will be applied to those big and small, and we
will fear no one” (Agence France-Presse, 2017).
Tracing of Illicit Assets
• Tainted Assets: direct assets, instrumentalities used in perpetration, or consequential product of corruption.
• Parallel investigations and prosecution led processes: timing and speed.
• Technical leads and trails: Registries, technological and social structure trails.
• Technical investigation capacity and operating environment:
• Digital vs Analogue
• National vs international
• Formal vs informal economies (cash economy)
• Property Rights Regime and Socio-economic outlay
Financial Investigation Teams
• Joint multi-disciplinary teams, domestic and
international collaborations.
• Legal experts; investigators, prosecutors and
international law practitioners
• Forensic accountants.
• Financial Investigators/Analysts.
• Auditors (internal and external).
• IT Forensic Experts (As and when needed).
Critical Role of FIUs
• Proactive/spontaneous sharing/disclosure of intelligence with law enforcement and prosecutors.
• Independent operation from the financial and political systems.
• Provision of ancillary intelligence: Suspicious Transaction Reports (STRs), Etc
• Expertise and specialised focus in financial matters.
• Informal and formal contacts and networks. (Egmont Group, ARINSA, ARINEA, Etc)
• Powers and ability to institute an administrative interim freeze on financial transactions.
• Double edged sword: insulation from abuse and political witch-hunting
Information, Contacts and Tools• SHERLOC: Sharing Electronic Resources and Laws on Crime (UNODC):
https://sherloc.unodc.org/cld/v3/sherloc/treaties/index.html?lng=en
• Competent National Authorities Directory: The online directory ofCompetent National Authorities allows easy access to the contact information ofover seven hundred competent national authorities designatedhttps://www.unodc.org/docs/mla/MLA_Tool_Revised/MLA_Tool_User_Manual_2.1.1.pdf
• The ICAR hosts an online Asset Recovery Knowledge Center:http://www.assetrecovery.org/
• The U4 Help Desk: http://www.u4.no/helpdesk
Open Source Data• Companies in over 100 countries: https://opencorporates.com/
• TRACE Compendium http://www.traceinternational.org/compendium/
• FCPA enforcement actions: http://fcpa.stanford.edu/
• Company registries: https://www.gov.uk/government/publications/overseas-registries/overseas-registries
• Corporate Crime Reporter: http://www.corporatecrimereporter.com/top100.html
• Bureau of Investigative Journalism: https://www.thebureauinvestigates.com/current-investigations/
• China SOE: http://www.sasac.gov.cn/n2963340/n2971121/n4956567/4956583.html
• Financial regulatory bodies by country: http://globaledge.msu.edu/industries/financial-services/regulatory-agencies
• Alphabetical querying of airports by three-digit code: http://www.airportcodes.aero/
• Airline prefixes by country: https://en.wikipedia.org/wiki/List_of_aircraft_registration_prefixes
Open Source Data
Land Registries:
• Malta: https://identitymalta.com/public-registry-searches/
• Hong Kong: http://www.landreg.gov.hk/en/services/services_b.htm
• United Kingdom: https://www.gov.uk/government/organisations/land-registry
• Ireland: http://www.prai.ie/
• Canada: http://www.titlesearchers.ca/registries/
• Sri Lanka: http://www.rgdept.lk/office/Land%20Registry.aspx
• Australia: http://www.necs.gov.au/Land-Registries/default.aspx
• All Europe list of land registries: http://eulis.eu/service/countries-directory/
Open Source Data• Where has the airplane been landing or taking off: https://www.planespotters.net/Aviation_Photos/index.php or
http://www.airliners.net/advsearch/ http://www.landings.com/_landings/pages/search/reg-world.html
• Marine traffic system: http://www.marinetraffic.com/en/ais/index/ships/range/flag:BS
• Offers real-time satellite tracking of maritime activities: http://www.spire.com/products/sense/
• Registries of ocean going ships: http://www.veristar.com/portal/veristarinfo/generalinfo/registers/seaGoingShips , http://www.classnk.com/register/regships/regships.aspx
• Marine traffic: http://www.marinetraffic.com/en/ais/home/centerx:25/centery:37/zoom:9
• Photo finder -Tin Eye: http://www.tineye.com/
• Photo meta data finder: http://fotoforensics.com/tutorial-meta.php
• Photo geolocator: https://www.yandex.com/images/?redircnt=1447095838.1 , http://readexifdata.com/ ,
• Social media: http://www.yoname.com/, http://snitch.name/, http://www.peekyou.com, https://www.anoox.com/, http://www.whostalkin.com/, http://socialmention.com/, http://boardreader.com/, https://www.social-searcher.com/
• Devices where twitter accounts used: http://www.twitonomy.com
The Dark and Anonymous World
• Anonymous search engines - the ‘gold standard’ in Internet privacy. https://torproject.org
• A proxy-server based tool that hides your IP address. HMY also offers an encrypted VPN. https://www.hidemyass.com/
• Obscure your IP address so that the target site has no idea you are looking at it: https://www.megaproxy.com/
• Temporary email: https://www.guerrillamail.com/ , http://10minutemail.com/10MinuteMail/index.html
• Free web browser and no personal information is left on your machine: https://www.ixquick.eu/, https://duckduckgo.com/
Cleaning your tracks after …*
Wipers
• For clearing all Internet history, cookies, passwords, cache, unrecoverable file deletion, etc.
• BleachBit: http://bleachbit.sourceforge.net/
• Eraser: http://download.cnet.com/Eraser/3000-2092_4-10231814.html
• Darik’s Boot & Nuke: https://sourceforge.net/projects/dban/?source=directory
• Glary Utilities: http://www.glarysoft.com/
• CCleaner: http://www.piriform.com/ccleaner
Email Tracking
• Free software that tracks who opens and reads an email,
including providing back information on identity, the
device or machine on which they opened the message,
and other information pulled from their computers.
• DidTheyReadIt: http://www.didtheyreadit.com/
ReadNotify: https://www.readnotify.com/
• WhoReadMe: http://whoreadme.com/
• GetNotify: http://www.getnotify.com/
Deep Web and Dark Net• About 10% of the internet is known and explored by ordinary users. Over 90% is the dark and deep web.
• The “Deep Web” are parts of the World Wide Web that have either not been fully indexed, or that are so far down, behind login pages, etc.
• Residing on the Deep Web are things such as the database data (the rolls) of the U.S. Patent Office, and the databases used by LexisNexis for which non-subscribers see only the login page(s).
• Search engines on dark web: https://www.usersearch.org/ • www.completeplanet.com
• The Dark Net should be considered the untamed, hosting unlawful side of the greater Internet
• The Dark Net is not for amateurs and should be approached the first time with caution
• guidance on the Dark Net: https://www.deepdotweb.com/ , https://allthingsvice.com/
• TORCH is one of the Dark Net search engines currently on offer. http://xmh57jrzrnw6insl.onion/ and TorSearch http://kbhpodhnfxl3clb4.onion/
• https://www.deepdotweb.com/ • https://allthingsvice.com/, http://fieldguide.gizmodo.com/how-to-search-the-deep-web-safely-1770828854
International Action
• Awareness of strict adherence to procedures, protocol, and conditions for multilateral and bilateral MLA and domestic legislations;
• Develop and maintain personal connections
• Engage: Before, during and after MLA
• Personal contacts, referrals, counterparts, central authorities, practitioners’ network
• Identifying potential barriers to MLA – e.g. disclosure obligations: Switzerland, Liechtenstein, Luxembourg, etc
• Informal: Gathering open source info, spontaneous disclosures, joint investigation, starting local investigation, physical surveillance, etc.
• Data Protection: National and Regional Laws
Challenges of International Action
• Political gatekeepers and political patronage.
• Statutory /prescription time limits, and delays where no clause for suspension of time limit (tolling)
• Reasons for refusal: nature of penalty, ongoing proceedings in requested jurisdiction, lack of due process in requesting jurisdiction, specificity of crime.
• Lengthy process and bureaucratic process - delays in requested state
• Evidentiary requirements are stringent and vary from country to country
• Difference in legal regimes and confiscation system
• Language differences and strict translation requirements
• Collective action and team formations
Identification and Restraint
• Co-mingled assets and beneficial ownership: third party interests, trusts, and severing interests.
• Converted assets and bona-fide third party interests.
• Human Rights consideration and legal challenges.
• Extra-territorial assets – informal networks and MLAs.
• The deep web, dark web and encryption.
Preservation and Management
1. Nature of assets restrained or frozen.
2. Competence requirements.
3. Resources and operational requirements.
4. Institutional and infrastructure requirements.
5. Security of property and preservation of value.
Nature of Assets
• Asset recovery beyond money and including all manner of assets acquired and converted.
• Business – Cryptocurrencies – Chemicals – Precious Metals
• Nature of assets dictate preservation and management requirements.
• Judicial or legal alternatives and accommodation for costly asset restraint and management: Sale and preserve monetary value
Crypto-technologies and AI
• Virtual Future of Money Laundering.
• There are 1,658 cryptocurrencies
• In 2018 total cryptocurrency market capitalization was about $369 billion.
• (https://www.fraud-magazine.com/article.aspx?id=4294993747)
Maintaining the Equanimity
• Ceased and attached in Indonesia
• Original purchase price $250,000,000.
• Price sold by Malaysia Government $126,000,000.
• Minimum cost of maintenance $500,000 per month.
• Approximately $2,700,000 was spent between August and December 2018.
(https://yachtharbour.com/news/equanimity--how-much-does-it-actually-cost-to-maintain-a-90m+-superyacht--3066 )
(https://www.nst.com.my/news/nation/2019/04/475707/guan-eng-equanimity-sold-best-price )
Technical Competences
• Inventory of expert personnel: Running business managers /
Receivers and Expert material preservation personnel.
• Permanent vs Temporary staff engagement: Costs and
redundancy.
• Making an economic case of value for money.
• Continuous training and capacitation.
Resource Requirements
• Human, Financial, and Logistical Resources.
• Cost of staff, asset preservation materials, and hidden costs.
• Cost of establishing infrastructure and operational systems.
• Insurance / Liability and compensation costs.
Institutional and Infrastructure
• Physical space: storage, security, and ambience.
• Specialized infrastructure and value preservation.
• Managements and operational systems.
Confiscation and Repatriation
Post asset restraint proceedings in Uganda:
• Conviction of the accused a must. Asset forfeiture and repatriation part and parcel of final court orders.
• Assessment Orders and six months limit (section 63B).
• Confiscation orders (section 64)
• Appointment of manager, receiver or administrator (section 64B).
Institutionalising Asset Recovery
• Institutional framework by North (1990) posits that “[i]nstitutions are the rules of the game in a society or, more formally, are the humanly devised constraints that shape human interaction” (p.3).
• … a combination of formal and informal rules, and organisations, working in harmony to shape and provide a medium for human interaction.
• without a context-relevant shift in asset recovery programming and enforcement, success remains a far-flung aspiration
Institutionalised Experiences
• Gray, Hansen, Recica-Kirkbride, and Mills (2014, pp.21-
22) observed among the OECD countries that “assets
returned between 2006 and June 2012 was $423.5
million, which is significantly less than the $2.623 billion
in assets frozen … of the estimated $20 billion to $40
billion stolen each year from developing and transition
jurisdictions”.
• Less than 1% of the stolen assets are recovered (p.21)
and about 16.14% ($423.5million) of the frozen assets
had been repatriated.
Ugandan Framework
1. The Office of the Director of Public Prosecutions.
• Anti-Corruption Act, 2009 (Amnd 2015).
• Asset Recovery Department, 2013.
• Recovered Assets Collecting Account.
2. The Inspectorate of Government.
a) Anti-Corruption Act, 2009 (Amnd 2015)
• Asset Recovery Unit, 2015.
• Recovered Assets Collecting Account.
b) Leadership Code Act, 2002 (Amnd 2017)
• Leadership Code Act Unit.
• Leadership Code Tribunal.
Institutional Collaborations• Financial Intelligence Authority (FIA) and (Bank of Uganda and Min. of Finance, P and Econ. Dev.)
• Suspicious Transaction Reports and other financial intelligence
• Office of the Auditor General
• Annual Audit Reports
• Forensic / Special Audit Reports
• Public Procurement and Disposal of Assets Authority (PPDA)
• Procurement Audit Reports
• Uganda Police Force
• Corruption and Economic Crimes Division – Criminal Investigation Dir.
• Civil and Property Registries and Private Sector
• URSB, URA, MLHUD, DCIC, NIRA, etc
• Ministry of Justice and Constitutional Affairs / Attorney General
• State House Anti-Corruption Unit (SHACU)
• Investigation, Arrest and Coordination
Procedural Aspects and Powers
Approaches to AR in Uganda.
• Using investigative powers:
• Inspector General of Government special powers to freeze and restrain assets (Section14 of the IG Act and Art 230, Uganda Constitution), and section 33 ACA for Inspector General of Police.
• Restraining, and confiscation of using court orders. (ACA sec. 53 – 55, 64, 64A-C and AMLA sec. 71 to 74)
• Use of compensation orders; (sec. 197 of MCA , sec. 126 of the TIA, and Article 126(2)(c).
Procedural Aspects and Powers
• Special investigation powers (sec. 33).
• Rebuttable presumption of acquired property or
interests in 10-years (sec. 63A).
• Rebuttable presumption of expenditure – any time
prior.
• Assessment orders to determine benefits (sec. 63B).
• Controlled time frames: assessment order –
confiscation order (6 months).
Civil Asset Recovery
• Proceeding against the assets in rem – follow the money.
• Article 54(1)(c) of UNCAC, - requires all States Parties to consider forfeiting the proceeds of crime without a conviction
• Overriding the obstacles of criminal prosecutions; evading jurisdiction, death of perpetrators, third party holding, immunity
• Standard of proof - BoP
• Concurrence: criminal and civil actions
• Constitutional challenges and human rights over rides
• Civil Asset Recovery not a substitute for Criminal Prosecution
Civil Asset Recovery
• The European Court of Human Rights and English
Courts of Law (Gale and another v SOCA [2011]
UKSC 49) to the effect that civil forfeiture
proceedings against a property are proceedings in
rem and not in persona.
• Therefore, a presumption of innocence cannot be
imputed since it’s a property that is subjected to civil
proceedings and not the person, (Butler v UK
41661/98, 27th June 2002).
Civil Asset RecoveryThe U.S. government sought over $70 million in assets from the son of Equatorial Guinea dictator Teodoro ObiangNguema Mbasogoincluding one sparkling prize: Michael Jackson's iconic white crystal-encrusted glove.
Civil Asset Recovery
• The dictator’s son had allegedly amassed over $100
million through corruption, and laundered the proceeds
in the U.S.
• The DOJ said he used intermediaries and shell
companies to acquire assets in the United States,
including;
• more than $1.8 million worth of Michael Jackson memorabilia,
• a $38.5 million Gulfstream G-V jet,
• a $30 million house in Malibu, California, and
• a 2011 Ferrari worth $530,000.
Navigating Plea-Bargain
• Judicature (Plea Bargain) Rules, 2016 permit the
Prosecution and Accused party to enter a bargain and
propose to court a settlement in respect to charges and
sentencing.
• Conviction is a must.
• Accused party may cease opportunity of plea bargain to
plead guilty and inter-alia agree to asset forfeiture.
• Forfeited assets repatriated to deprived party [state or
non-state entity].
Success and Influencing Factors
• Comprehensive Legal and Institutional Framework
• Specialized asset recovery units for ODPP and IG
• Strategy, leadership and ownership
• Institutionalized asset recovery
• Coordination of processes, actions and linkages
• Human Resource: adequacy, expertise and facilitation
• Technological advancement, and globalization
• The political factor
Success and Influencing Factors
• Economic growth, development and empowerment
• Mimicking and isomorphism in the name of best
practices
• Transformational Development Approach (TDA) –
confusing outcomes for inputs
• Tactical vs systemic action
• Path dependence and transformation
CHALLENGES
• The Political factor: self serving legislation
• Politically Exposed Persons managing key recovery processes – AmMLA.
• External challenges on cooperation and information for MLAs.
• Absence of Leadership Code Tribunal – incomplete legislation and structures.
• Lack of a stand alone asset recovery law.
• Structural disconnect of enforcement of anti-corruption court orders.
• No post restraint asset management mechanisms, expertise, and infrastructure.
Take Away Messages
• Strategy, leadership and ownership
• Legal and institutional frameworks are critical.
• Tracing and identification: a tall order in a global tech world.
• Restraint and confiscation: time of the essence
• Institutional and operational asset management necessary:
managing costs and value preservation.
• Success is elusive and multi-institutional and multi-jurisdiction
cooperation a necessity.
• Procedural expedience in law and practice.
