While some intricacies regarding illicit enrichment laws are yet to be properly tested in courts, they have “remarkable potential” in the field of asset recovery.
The Basel Institute on Governance has published a new open-access book offering a comprehensive guide to illicit enrichment laws and their application to target unexplained wealth and recover proceeds of corruption and other crimes.
“An increasing number of countries are introducing mechanisms to target people who enjoy an amount of wealth that can’t be explained by their lawful income,” the book says.
These mechanisms – known as illicit enrichment laws or unexplained wealth laws – allow investigators and prosecutors to recover assets that have clearly not come from lawful sources without having to prove the specific criminal action that gave rise to these proceeds.
Such laws are particularly useful to target corruption offences, which often make it difficult to point to an obvious victim or to a specific criminal act.
The book covers both criminal law-based and civil-law based illicit enrichment laws from around the world, explaining the different approaches that legislators have taken to define, codify and sanction unjustifiable and unexplainable increases in wealth.
The scope ranges from laws that take the form of criminal offences to those based solely in civil procedure, such as unexplained wealth orders.
For example, in Hong Kong, a person who maintains a standard of living above that which is commensurate with his present or past official emoluments, or is in control of pecuniary resources or property disproportionate to his present or past official emoluments, is liable for a fine of HKD 1 million and ten years’ imprisonment – if he cannot gives a satisfactory explanation to the court.
The book goes through an extensive examination of jurisprudence to further explain the different approaches and interpretations that judiciaries have taken when applying these laws, particularly in the context of existing legal rights.
The book offers policy guidance to potential drafters of illicit enrichment laws, and technical guidance to law enforcement practitioners and courts charged with applying these laws.
However, given the overall underdeveloped nature of illicit enrichment legislation, the book does not recommend these laws as a ‘silver bullet’ solution in the fight against corruption and other crimes.
“There are many intricacies regarding the concept that are yet to be properly tested in courts and it is still important to approach the area of illicit enrichment law with some caution,” it says. “Nonetheless, there is also no doubt that illicit enrichment laws have remarkable potential in the field of asset recovery.”
Following the successful application of illicit enrichment laws in a number of jurisdictions, an increasing number of countries are turning to these mechanisms to target corruption and criminality in general, and recover proceeds of crime.
The book calls for greater international cooperation in the handling of illicit enrichment cases.
The book, available here, was written by Andrew Dornbierer, an asset recovery specialist for the Basel Institute on Governance.