Some jurisdictions that require disclosure allow an undisclosed temporary freeze to be put in place during an investigation. In one such country, the courts generally permit as much as a six-month temporary freeze without notification to the asset holder. Temporary freezes are not without their own problems, however. The longer an account is temporarily frozen, the more likely the target of the investigation will attempt to make a transaction and discover the investigation. The target could then move money from other accounts that have not yet been identified and frozen. For that reason, if inquiries into a bank account or property reveal that the target of the investigation has interests in other accounts or properties within the requested jurisdiction, MLA should permit the same inquiries to be made in relation to these other accounts and properties. The use of informal assistance outside of formal MLA, such as the spontaneous sharing of information or the sharing of information and intelligence through FIUs, can also help to identify other accounts to be frozen.
Policy Recommendations a)
Jurisdictions should permit MLA to be provided without notifying the asset holder where investigative and preservation measures are involved, provided that sufficient protections of the due process rights of the asset holder exist at those stages of the proceeding that involve coercive or intrusive measures. b) Jurisdictions should not require mandatory notification of customers when a financial institution communicates information requested by foreign jurisdictions during an investigation. At a minimum, jurisdictions should have the capacity to delay notifi cation until the appropriate stage of the investigation (usually, the point when the lead investigatory body is best prepared to mitigate the risks of disclosure).
Operational Recommendations a)
Jurisdictions that require disclosure should communicate with originating jurisdictions before assistance is provided to determine whether the jurisdiction would prefer to receive the information or would rather take other measures to avoid disclosure to the asset holder. If such a requirement exists, jurisdictions should prominently display this information on their Web site and advise practitioners in other international forums. b) Jurisdictions that require disclosure when executing formal MLA requests should allow temporary freezes to be put in place during investigations without disclosure to the asset holder.
Legal Barriers and Requirements that Delay Assistance
Book 1.indb 57
I
57
5/11/11 4:20:47 PM