FATF expands asset recovery scope beyond graft, cites ED

NEW DELHI: The Financial Action Task Force (FATF) has released a new guidance for asset recovery, expanding its scope beyond corruption.

Officials in Delhi said that the global anti-money laundering watchdog has drawn extensively from the work done by the Directorate of Enforcement and multiple instances of action taken by ED have been cited in the 340-page guidance note.

"The guidance follows the lifecycle of asset recovery, beginning with the establishment of solid legal and policy frameworks necessary to facilitate the identification of assets and financial investigations, processes to preserve and manage assets for eventual recovery, and mechanisms for international co-operation to meet the challenge of crime that transcends international borders," said the Paris-based agency, which sets global standards for combating money laundering and terror financing crimes. Officials from ED participated extensively in the exercise.

Among the multiple examples cited from India's experience is the Agri Gold case where coordination between ED and Andhra Pradesh Crime Investigation Department resulted in the attachment and restoration of assets worth Rs 6,000 crore ($690 million) to victims of an investment fraud. A case related to real estate player IREO, which led to the attachment of immovable properties worth around Rs 1,800 crore, equivalent to the proceeds of crime transferred outside India, under the provisions of the Prevention of Money Laundering Act (PMLA) demonstrated India's use of value-based confiscation, it said.

The guidance also refers to the Fugitive Economic Offenders Act as an example of the doctrine of fugitive disentitlement, enabling confiscation of property belonging to offenders evading judicial processes.

Under the section on expeditious measures, the guidance presents the case of BitConnect ponzi scheme where, based on intelligence regarding web wallets and digital devices containing cryptocurrencies, ED seized cryptocurrencies valued at Rs 1,646 crore during search and seizure operations. These virtual assets were then secured in a cold wallet, and additional movable and immovable properties worth Rs 500 crore were attached.

The global anti-money laundering watchdog also cited instances of restitution and victim compensation, pointing to the case of Rose Valley scheme, which raised money from the public through secured debentures and diverted the funds into shell companies.


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