Introduction
For decades, a reality haunted global law enforcement: The balance tips in favor of criminals in the big finance game.
Globally, authorities successfully recover only a tiny fraction of the trillions of dollars generated by organized crime, corruption, and fraud each year. For criminals, the profits have vastly outweighed the risks.
But things are changing : The Financial Action Task Force (FATF), the inter-governmental body that sets global standards for combating money laundering, has issued its most significant update to asset recovery rules in over three decades. In a comprehensive new guidance paper, the FATF is urging its 200+ member jurisdictions to adopt a "more robust toolkit" designed for one purpose: to make crime unprofitable.
This new framework redefines "asset recovery" not as a single event, but as a complete lifecycle—from the first moment an asset is identified to its final return to victims or society. Here is a look inside the new global playbook for taking back criminal proceeds.
A New National Priority
The FATF's first directive is a fundamental shift in mindset: asset recovery must become a core policy priority for all countries, not an afterthought.
The guidance argues that successfully seizing assets is critical for:
Removing the Incentive: It attacks the primary motive for most crimes—financial gain.
Disrupting Criminals: It depletes the funds that organized crime groups use to finance new operations, buy weapons, and corrupt officials.
Restoring Justice: It provides a path to compensate the victims who were harmed by the crime.
Protecting Economies: It strengthens international confidence and prevents "dirty money" from distorting financial markets.
To do this, countries are told to invest heavily in specialized training, resources, and technology. The guidance also calls for new forms of collaboration, urging law enforcement to build partnerships not only with the private sector (like banks and crypto exchanges) but also with domestic agencies like tax authorities.
1. Investigating
The foundation of any successful recovery is the financial investigation. The FATF standards now stress that investigators must "follow the money" from the earliest possible stage of any proceeds-generating crime, not just as part of a separate money laundering case.
The goal is twofold: build a criminal case and, just as importantly, identify and trace the assets.
FATF stresses that investigators must have robust legal tools and access to information to uncover the true beneficial owner of an asset.
This phase isn't just about finding assets; it's about planning. Authorities are urged to evaluate the assets they find, anticipate the costs of managing them (a seized yacht or business costs money to maintain), and identify any legitimate third parties (like victims or co-owners) who might have a claim.
2. Securing the Assets
Criminal assets can vanish in seconds with a bank transfer or a crypto swap. The new standards introduce powerful tools to act swiftly before a court case is finalized.
- A New "Pause Button"
A key innovation now required is the power for an authority (like a Financial Intelligence Unit or FIU) to suspend or withhold consent for a suspicious transaction. This allows authorities to immediately pause a transaction—without an initial court order—while they analyze it further and decide whether to pursue a more permanent freeze.
- Freezing and Seizing
This includes the standard provisional measures:
- Freezing: Prohibiting the transfer or movement of assets, such as funds in a bank account.
- Seizing: Taking physical possession or control of a specified property.
Crucially, the guidance states that authorities must be able to obtain these orders ex parte—that is, without notifying the suspect—to prevent them from moving their assets before the order can be served.
Once an asset is seized, it enters "interim management.”, focusing on preserving its value. For assets that depreciate quickly (like cars or perishable goods), authorities are even encouraged to conduct a pre-confiscation sale and hold the resulting cash instead.
3. Confiscation
The target is a final, permanent court order taking the property away from the criminal. The FATF now requires countries to have a "comprehensive range" of confiscation measures, including two major new requirements.
- Conviction-Based Confiscation (CBC): The traditional model. A person is convicted of a crime, and the court orders the confiscation of assets proven to be linked to that specific crime.
- NEW Extended Confiscation: This allows authorities to go beyond the assets linked to a specific conviction. If a court is satisfied a person has a "criminal lifestyle" (e.g., a drug trafficker with a mansion and luxury cars but no legal income), it can order the confiscation of all assets deemed to be derived from their wider criminal conduct, even if not tied to the specific charge.
- NEW Non-Conviction Based Confiscation (NCBC): This is a game-changer. The FATF now requires countries to have a legal path to confiscate assets without first securing a criminal conviction2929. This is essential for cases where a suspect has died, fled the country, or is immune from prosecution. This type of case is in rem (against the property itself), allowing a court to rule that the asset is the proceed of a crime, regardless of who owns it.
4 : Returning and Reusing Recovered Assets
What happens to the assets after they are finally confiscated?
- Victims First
The guidance is clear: the primary goal should be to return confiscated property to its prior legitimate owners or to compensate the victims of the crime.
- Public Benefit
When direct victims aren't identifiable, countries are encouraged to establish asset recovery funds These funds can reinvest the proceeds of crime back into society by paying for:
- Law enforcement operations
- Healthcare and education programs
- Community development projects
When assets are recovered through international co-operation, the countries involved should have agreements to share the returned assets fairly, as well as the costs associated with the recovery.
Consequences
The FATF guidance acknowledges that these are powerful tools that could be highly misused, hence the strong guidance on the rule of law.It also underlines some key, understated infos :
- States are not really equipped yet to stop and store money while waiting for court orders. With the money moving 24.7, criminals have an edge.
- FIU should be better equipped to stop the flow of money before it happens. It has direct consequences on every payment solution that falls under their jurisdiction.
- The ability to stop funds in real time = no more post transfer checks
- An efficient, direct communication channel with their FIU
- Stopping money is one side of the coin. Storing the assets while waiting for a legal decision is another, and states are ill-equipped for that, especially with the boom of crypto and high maintenance assets.
