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Editor’s Note: The ACAMS moneylaundering.com legal team examines global efforts to permanently seize wealth of suspicious origin outside of criminal proceedings.

In October 2023, the Financial Action Task Force directed nations to prioritize recovering cash and other assets of suspicious origin and introduced legislation authorizing investigators within their jurisdictions to seize them absent a criminal conviction.

The following month, FATF’s first-ever comprehensive review of asset-recovery interagency networks concluded, and revised its 40 technical standards against financial crime to recommend that nations establish legal mechanisms for restraining potentially illicit assets at an earlier stage of their investigations into suspected money launderers and other criminals.

The Council of the EU followed suit in April of this year with a directive to the bloc’s 27 national governments to establish de minimis standards for tracing, identifying, freezing, confiscating and managing criminal property within their jurisdictions.

Pursuant to the updated standards, which apply to assets linked to any one of a broad range of crimes, including sanctions evasion, the EU’s national governments must appoint dedicated officers to support their and the European Public Prosecutor’s Office’s efforts to track and restrain unexplained wealth through civil, rather than criminal, law.

Dutch officials introduced an amendment in March that would allow investigators to seize potentially illicit assets before securing convictions against their owners, and German officials plan to revisit their country’s own asset-forfeiture legislation this year.

Unexplained wealth orders, also known as UWOs, and other non-conviction-based forfeiture tools have existed in various forms in common law nations such as Australia and Trinidad and Tobago, and in civil law and hybrid nations such as Singapore and Peru, which has recovered nearly $100 million of assets of suspicious origin under a measure that took effect five years ago.

Similarly, all but two countries in Latin America have enacted non-conviction-based forfeiture laws, though some still face challenges in their application.

Because UWOs place the burden of proof on defendants, or, in this case, respondents, to demonstrate the lawful origin of their assets, courts and legislators in several countries have reviewed, and often questioned, whether such measures violate due process.

The World Bank, U.N. and Global Tax Policy Center recommend that nations regularly review the impact of UWOs, refrain from using them against low-value assets, and consider whether they should limit themselves from compelling respondents who do not qualify as politically exposed persons from having to explain the origin of assets they acquired in the distant past.

EU officials for their part have embedded several safeguards in their directive, one of which requires member states to further limit their employment of UWOs to assets linked to offenses punishable by at least four years in prison.

The directive separately advises the bloc’s national governments to empower investigators to seize suspicious assets that respondents transfer to third-party associates if the latter knew “or should have known that the purpose of the transfer or acquisition was to avoid confiscation.”

In May, investigators with the U.K. National Crime Agency secured their first UWO in Northern Ireland, against a husband and wife suspected of using proceeds allegedly linked to organized crime to build a £275,000 property.

The NCA’s attempts to employ UWOs have at times encountered obstacles.

In April, for example, an Azerbaijani woman who six years ago became the first person targeted with a UWO in the U.K. petitioned a court in London to stop the agency from seizing her multimillion-pound jewelry collection.

Authorities in British Columbia, Canada, employed their first UWO in November 2023, compelling a recently separated couple to explain where the funds they used to acquire a $1.8 million residence originated.

A Green Party leader in Scotland meanwhile renewed calls to use a UWO to investigate former U.S. President Donald Trump’s finances after a state judge in New York ordered him to pay $355 million in penalties for fraudulently overstating his net worth while applying for bank loans.

Contact Junko Nozawa at jnozawa@acams.org