Financial Investigations: The Key to Recovering Illegally Obtained Assets
A comprehensive approach to financial investigations is crucial in the fight against money laundering and the recovery of illegally obtained assets. These investigations are not limited to a specific timeframe, but can go back several years before the commission of the crime.
Extended Confiscation Cases
In Mozambique, for instance, “extended confiscation” cases involve criminal investigators with an aptitude for financial analysis and specific additional training. In other countries, specialized units of financial investigators or external consultants may be appointed to support criminal cases.
Requirements for Financial Investigators
Financial investigators require highly specialized skills and experience in understanding:
- Financial flows
- Corporate structures
- Banking systems
- Money laundering schemes
- Analytical software
- Background in accounting, financial auditing, or other technical areas
- Additional training on criminal law and processes
The Importance of a Parallel Approach
A key aspect of financial investigations is the parallel approach, which involves focusing simultaneously on the crime and related money laundering charges. This approach has been recommended by the Financial Action Task Force (FATF).
Consequences of Not Conducting a Parallel Financial Investigation
Failure to launch a parallel financial investigation at the start of a criminal investigation can have serious consequences, including:
- The criminal taking advantage of extra time to hide or destroy evidence
- Evidence being overlooked, leading to the case failing in court or the criminal being convicted of a lesser crime
- Other suspects, witnesses, or victims remaining unidentified
- Irrelevant assets being ignored, missing out on an opportunity to confiscate them
Common Challenges in Financial Investigations
Despite the importance of financial investigations, several challenges remain. These include:
- Access to financial information: Many countries lack a central database of bank accounts and other financial assets, making it difficult for investigators to request information about specific individuals or entities.
- Format of information: Paper-based information can be cumbersome and time–consuming to process, increasing the risk of errors.
- Skills and experience: Financial investigators require specialized training and hands-on experience in complex cases.
- International cooperation: Investigations can be compromised by a lack of cooperation from other jurisdictions or delayed cooperation.
Overcoming Challenges
To overcome these challenges, it is essential to prioritize mutual understanding and trust among all parties involved in the criminal justice system. By working together and sharing information, we can recover illegally obtained assets and deter criminals and corrupt individuals.
About the Basel Institute on Governance
The Basel Institute on Governance is an Associated Institute of the University of Basel, dedicated to providing expertise and knowledge on governance, anti-money laundering, and asset recovery.