Asset Tracing or Asset Tracking, is the process whereby investigators, usually working on behalf of law firms, conduct specialist financial enquiries to determine an individual subject or company´s wealth, trying to identify, assets such as: cash, money in bank accounts, share ownership, investments in stocks and bonds, real estate, luxury vehicles and yachts, art and precious metals. We conduct this process in three key asset tracing phases; identify, secure & recover.
The two key factors in any Asset Trace are the ability to quickly assess the probability of recovery of the identified assets and the associated financial cost of doing so – as of course there is little point pursuing non-recoverable assets that are otherwise encumbered, or legally shackled, or undertaking an action if the expected value of recovery doesn’t cover the costs.
It cannot be stressed enough that an asset trace can be costly and time-consuming, especially if an individual goes to great lengths to hide their assets behind a veil of shell companies in offshore jurisdictions. It is also challenging for those working in the context of failed states or, widespread corruption and that’s before factoring in considerations such as navigating relevant data protection laws, treaties and jurisdiction-specific legislation.
The entire Asset Tracing process is made up of a highly complex series of protocols that require expert professional support. It requires skill, judgment, experience and legal intelligence in order to pursue and reclaim identifiable assets.
Having said that, whether pursuing assets through criminal or non-conviction based (NCB) confiscation, or through proceedings in a foreign jurisdiction, or a private civil action, the objectives and fundamental process for recovery of assets are generally the same. The process is broken down and can be categorised into four key phases: Pre-Investigation, Investigation, Judicial and Recovery.
Asset Tracing Phases: Identify
Pre-Investigation starts as soon as the Asset Trace is instructed. This initial phase includes gathering and analysing as much intelligence as possible on the target, potential assets, their value, their location and the status of their registered ownership. Once the assets have been identified in the Pre-Investigation phase the process moves to the Investigative phase.
Frequently at this stage in an Asset Trace, cash at bank, goods and chattels are identified as having been amassed as the result of criminal activity. Where this is the case the evidence will be passed to the relevant prosecutors, who after assessing the probability of a successful conviction will pursue the perpetrator through the criminal courts and seek a successful prosecution. In the same way as a civil recovery they must secure the assets pending the outcome of the case.
Asset Tracing Phases: Secure
The Judicial phase includes the trial and then issuance of the judgment against the persons identified in the Investigation phase.
In order to seize the assets in the jurisdiction(s) in which they have been found, the judicial authorities of the requesting jurisdiction must work closely with their counterparts, to ensure that an appropriate course of action is taken (e.g., enforcement of the confiscation order from the requesting country or obtaining a local confiscation order in the requested jurisdiction).
Once the investigation has identified the assets and their provenance, the time comes to secure and restrain the assets to avoid possible dissipation, removal or as in some cases destruction.
In order to secure the identified Assets seizure, the instructing client, very often law firms, must seek judicial authorisation such as a Mareva injunction – A temporary injunction that freezes the assets of a party pending further order or final resolution by the Court.
The so-called Mareva injunction, developed by courts in England, prevents a defendant from transferring their assets outside the United Kingdom, or otherwise dealing with their assets (other than in the ordinary course of business and for the payment of proper expenses) during the pendency of an action.
Although originally limited to assets within the United Kingdom, Mareva injunctions (Worldwide Mareva Injunctions) have been extended so as to cover many other jurisdictions including offshore tax “havens”.
Offshore is typically defined as business activities that take place anywhere else in the world outside of an individual’s own home country, or away from home shores in another jurisdiction, meaning a sovereign territory, country or region within a country, that has its own legal structure and governing body. However, the true definition is commonly misinterpreted. Many such jurisdictions are based on islands, which has brought about the terminology in a literal sense.
Where the Assets are held in foreign jurisdictions, International cooperation is essential for their successful recovery. An established global network is needed to provide local knowledge and legal processes to implement provisional cautions, assist in Asset Recovery and to oversee their final return.
Asset Tracing Phases: Recover
And finally, the Recovery phase where the Asset is actually returned to the rightful owner or Plaintiff. When a court has ordered the restraint, seizure, or confiscation of assets, steps must be taken to enforce the order. If assets are located in a foreign jurisdiction, a request must also be submitted.
The order may then be enforced by authorities in the foreign jurisdiction through either (1) directly registering and enforcing the order of the requesting jurisdiction in a domestic court (direct enforcement) or (2) obtaining a domestic order based on the facts (or order) provided by the requesting jurisdiction (indirect enforcement). Similarly, private civil judgments for damages or compensation will need to be enforced using the same procedures as for other civil judgments.
If you have been the victim of fraud, quantifying the loss, identifying the perpetrators and developing a strategy for recovery is essential. Advancements in technology have enabled criminals to transfer funds around the world and hide behind complex offshore corporate structures.
Matrix Intelligence
Matrix Intelligence understands the difference between intelligence and evidence required for use in a Court of Law. We have extensive knowledge of the legal system, enforcement regimes and cultural practices within the jurisdictions that we most commonly operate.
Having conducted extensive multi-jurisdictional and cross border complex investigations, we are experts at assisting with commercial and high-end litigation.
We deliver reliable and actionable intelligence for lawyers, financial firms, corporate clients, third party funders and HNW individuals – worldwide. We operate internationally and have exceptional capabilities in Eastern Europe and all offshore banking jurisdictions. For more
info@matrix-intelligence.com or online at www.matrix-intelligence.com
