3.1 Overview

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Domestic Legal Approaches to Direct Enforcement

3.1 OVERVIEW

The majority of the surveyed jurisdictions can rely on basic legal mechanisms to directly enforce foreign confiscation orders. Some countries, however, (for example, China,1 Indonesia, and Panama) have adopted no legal framework for direct enforcement. For example, the concept has not been debated during Indonesia’s recent elaboration of a draft law dealing with non-conviction-based (NCB) confiscation. A practitioner from this country who was interviewed, however, thought that its introduction into domestic law would help cooperation efforts and, crucially, provide Indonesia with increased leverage to ensure that foreign countries directly enforce an Indonesian confiscation order.

Other countries do have some basic legal framework but lack the necessary implementing legislation. Under article 20 of the Egyptian Anti-Money Laundering law, for example, the “competent Egyptian judicial entities may order the enforcement of final criminal rulings issued by competent foreign judicial authorities, concerning the confiscation of the funds resulting from money laundering and terrorism financing crimes or proceeds thereof, in accordance with the rules and procedures stipulated in bilateral or multilateral treaties to which Egypt is a party.”2 However, confronted with a foreign request and in the absence of more detailed legislation, Egyptian authorities have no choice but to launch a domestic money-laundering investigation where the facts are examined and a domestic order of confiscation is ordered.

Jurisdictions belonging to both common law and civil law legal systems employ direct enforcement mechanisms. Common law countries, however, tend to provide more detailed provisions on procedural matters such as document authentication, third-party notifications, and criteria for calculating property value.

3.1.1 Choice between direct and indirect enforcement channels

Resorting to direct enforcement modalities for implementing foreign orders may in some cases be an “obliged route” for technical reasons. In the United States, direct enforcement of foreign orders may be the only way to provisionally restrain assets that are not criminal proceeds (that is, value confiscation orders or substitute assets up to the value of criminally derived profits).3 Similarly, in Canada the ability to confiscate assets on behalf of a foreign country as part of foreign criminal proceedings is typically not available by a domestic confiscation order. Specifically, obtaining such an order under Canadian criminal legislation depends on the existence of a related Canadian criminal investigation to obtain a domestic order. Whereas there will be some situations where obtaining a domestic order is possible, in the vast majority of cases this would not be possible because Canadian law enforcement and prosecuting authorities lack jurisdiction.

As to foreign freezing orders, Cyprus would usually pursue the direct enforcement route unless the recognition of such orders was not possible because, for instance, the conditions set out in the legislation for registering the orders could not be met.

On one hand, some jurisdictions4 indicate a preference for direct enforcement as the most cost-effective model. On the other hand, indirect enforcement is favored when, in the execution of the request, additional assets are discovered that are not accounted for in the foreign order. South African officials would first ask the requesting country to amend the order, failing which they would consider taking indirect action. In Switzerland, indirect enforcement is used in practice to enforce foreign orders pertaining to compensation claims with countries that have not ratified the Council of Europe Convention on Money Laundering.

Overall, the simultaneous availability of both models (direct and indirect) is seen as injecting an important element of flexibility for determining the best course of action.

3.1.2 Mutual legal assistance (MLA) statutes, criminal procedure codes, and asset recovery legislation

Most jurisdictions regulate direct enforcement through MLA or asset recovery statutes. Others include special provisions in the sections of their criminal procedure codes dealing with international judicial cooperation.5

The structure, depth, and level of detail of domestic laws dealing with direct enforcement vary. Some legislative acts go to a great length to cover all issues that can potentially emerge, ranging from the effects of foreign confiscation orders to the entitlements of affected people.6 In South Africa, for example, the 1996 International Cooperation in Criminal Matters Act contains the main legal framework on the registration of foreign restraint and confiscation orders. It is accompanied by a set of implementing regulations setting forth detailed criteria for notifying interested parties as well as the period and the manner in which a person may apply to the competent authorities to set aside the registration of foreign restraint and confiscation orders. In Singapore, the MLA Act is complemented with a Third Schedule that applies to matters in relation to which the attorney general has authorized the enforcement of foreign confiscation orders. These matters range from the criteria for calculating interest on the amounts to