When assets are hidden in a foreign bank account or are otherwise offshore, domestic authorities might be able to seek asset forfeiture, discovery or other relief pursuant to a Mutual Legal Assistance Treaty (“MLAT”). Depending on the circumstances, MLAT’s can particularly help domestic authorities trying to locate, (and then possibly forfeit), criminal proceeds which have been parked offshore.
The United Nations Office on Drugs and Crime even offers a “Mutual Legal Assistance Request Writer Tool“, which is depicted in the attached chart. The first page of the U4 Anti-Corruption Resource Centre’s publication “Mutual legal assistance treaties and money laundering“, also describes the use of MLAT’s. Said publication mentions that MLAT’s are important because “corruption and money laundering cases are often and increasingly transnational”. The Internal Revenue Manual from the I.R.S. similarly discusses MLAT’s at 22.214.171.124.1 (05-22-2006) Bilateral Treaties and the I.R.S. clearly relies on MLAT’s as part of its fight against tax fraud.
Pursuing asset forfeiture, discovery or other relief pursuant to a MLAT can however, be challenging. To cite just one example, Swiss counsel in Geneva and I just discussed difficulties the Swiss can face when seeking asset forfeiture / MLAT relief through the U.S. Department of Justice. The problem arises from the fact that Swiss legal standards for showing the origin of criminal funds in an asset forfeiture case are less stringent, compared to those in the U.S.
Some Swiss MLAT requests in asset forfeiture cases have in fact, been denied by the U.S. Department of Justice because these requests failed to sufficiently demonstrate under U.S. law, that the funds to be forfeited had criminal origins. From a Swiss perspective meanwhile, those same asset forfeiture / MLAT requests were legally sufficient and entirely necessary under Swiss law.
(Edited July 10, 2010)
Copyright 2009-2010 Fred L. Abrams