By PAUL O’DONOGHUE, Senior Correspondent
THE Financial Action Task Force (FATF) has warned in new guidance that national officials must be able to recover crypto assets.
The organization, which sets global AML standards, today published its ‘Asset Recovery Guidance and Best Practices’. The guide is intended to assist countries with asset recovery efforts and ‘tangibly improve’ confiscation results.
“Figures released by Interpol and UNODC suggest a very low percentage of criminal assets are confiscated,” the FATF said.
“FATF’s assessments show that more than 80% of jurisdictions are operating at low or moderate levels of effectiveness in asset recovery.”
It said its new guidance recognises that “depriving criminals of their gains is as important as prosecuting them”.
“Removing the financial motivation for crime is critical. To disrupting and deterring criminal organisations, terrorists, and scammers around the world,” it said.
FATF President, Elisa de Anda Madrazo said: “Recovering criminal assets is not an afterthought. It has a real impact on lives around the world and demonstrates that justice systems work.
“This detailed guidance equips countries to act faster, search further, and think bigger when it comes to asset recovery. We must send a clear message: crime will not pay.”
The guidance includes a warning that countries must also have the capability to confiscate virtual assets (VAs), such as crypto.
FATF crypto asset recovery guidance
“As to investigations involving VA, the first and most basic requirement is for LEAs (law enforcement authorities) to develop sufficient operational awareness when they encounter this class of asset,” it said.
“The ability to act swiftly and effectively in VA seizure situations often hinges on practical familiarity with crypto-specific evidence and tools.
The FATF said identifying a hardware wallet where a criminal has stored their crypto “requires different knowledge and immediate response protocols than handling cash or conventional documents”.
“If an LEA encounters these elements and is not trained to spot or secure them, the window of opportunity for seizure may close, often within minutes, due to the speed and global reach of VA networks,” it said.
The guidance document draws on more than 85 case examples and techniques from across the FATF Global Network. It outlines each phase of asset recovery. From tracing and freezing assets, to protecting rights and compensating victims.
The FATF said the new guidance will help countries apply its revised 2023 Recommendations. It also said it will improve cooperation among policymakers, law enforcement, and asset managers.
“The FATF requires jurisdictions to make asset recovery a policy and operational priority. And [it] is calling on them to use the new guidance to safeguard the integrity of the global financial system and improve outcomes for victims and communities,” it said.
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