One of the topics that StAR has delved deeper into over the past quarter is direct enforcement of foreign confiscation orders. Domestic mechanisms for recovery of property through international cooperation on confiscation are important preconditions for the recovery of stolen assets, pursuant to the United Nations Convention against Corruption. In fact, any States party to the Convention must establish measures enabling them to give direct effect to each other’s domestic confiscation court orders, subject to the requirements of their domestic law (for example, see articles 54(1)(a), 55(1(b)) and 57(3(a)). Of course, there can be totally legitimate reasons for a country to refuse the execute a foreign confiscation order-notably if the order was issued without respecting the defendant’s due process rights, or the defendant was targeted for political reasons.
From a practical point of view, the ability to directly enforce foreign confiscation orders would facilitate the recovery of assets, as additional court procedures in requested jurisdictions can be time and resource-consuming and involve other technical challenges.
The Asset Recovery Handbook published by the StAR initiative in 2011 touched upon the issue of the enforcement of foreign confiscation court orders i.e., “direct enforcement”, and listed examples of conditions typically needed to obtain a confiscation judgement in the requested jurisdiction. These include:
- conditions ensuring the application of provisional measures;
- a provisional restraint order obtained during the course of litigation to ensure assets are not moved or dissipated;
- a final order of judgment of confiscation that is not subject to any possible appeal; and
- proof that notice was provided to all potential claimants and that they were given an opportunity to present any challenges recognized by law.
The Handbook also provided two examples (of the U.S. and the U.K.) demonstrating requirements to the enforcement of foreign confiscation orders.
- In the United States, an MLA request to register and enforce a foreign court confiscation judgment must meet certain statutory requirements and should be certified by the U.S. attorney general. U.S. authorities will then file an application to enforce the order as if it had been rendered by a court in the United States. The district court will order that the judgment be enforced on behalf of the foreign jurisdiction, unless it finds that the judgment was rendered under a system incompatible with the requirements of the due process of law, that it was obtained by fraud, or that the foreign court lacked subject-matter jurisdiction or personal jurisdiction.
- In the United Kingdom, the Secretary of State refers the processing of confiscation orders arising from a criminal conviction in a foreign jurisdiction to the relevant agency. The Crown Court decides whether to seek registration of an external order, thus giving it effect. It will register only an order made consequent to the final conviction of the person named in it, not subject to appeal, and compatible with the Human Rights Act of 1998.
However, since the time of the publication of the Handbook, we are unaware of significant asset recovery cases based on “the direct enforcement” of foreign confiscation judgements.
The States parties to the Convention have often expressed frustration over discrepancies in different domestic seizure and confiscation regimes, stressing that significant challenges remained owing to excessive procedural requirements and related delays in the asset recovery process, a lack of familiarity with domestic legal procedures, lack of trust between requesting and requested States, and differences in such procedures, in particular with regard to confiscation regimes.
In a resolution it adopted last year, the Conference of the States Parties to the Convention specifically called upon the States to take concrete steps to ensure that there are adequate mechanisms in place to allow or expand cooperation in the enforcement of foreign seizure and restraint orders and confiscation judgments, including through awareness-raising for judicial authorities and through measures to permit, where possible under national law, recognition of non-conviction-based seizure and freezing orders and confiscation judgments.
These developments highlight the need to enhance international cooperation in this area. This is why StAR is currently undertaking further analysis on why direct enforcement of foreign confiscation orders has not been utilized more actively in practice. In that regard, StAR will also be examining the information made available in the course of the Second Cycle of the United Nations Convention against Corruption Implementation Review Mechanism, which was launched in 2015, and focuses on the implementation of the requirements of Chapter V of the Convention on “Asset Recovery” by the States parties. We hope this publication, envisaged for later this year, will increase understanding and use of this important mechanism and ultimately contribute to more effective asset recovery.