Lexbridge is leading the development of an exciting project to develop a model anti-money laundering (AML) and criminal asset confiscation framework (the Model Framework). The Model Framework is intended to reflect best practice legal standards and to be tailored for adoption and implementation by Pacific Island countries. The key objective of the project is to assist Pacific Island countries in their efforts to combat the threat of money laundering linked to corruption and organised crime.
If adopted and implemented by a majority of Pacific Island countries, the Model Framework would potentially be the most significant advancement in the Pacific Region to combat serious and organised crime, particularly financial crime for the past 20 years. The Model Framework would provide multiple positive flow-on effects to the region, and would be a highly effective tool to combat corruption in the region and foster stronger regional cooperation against transnational crime and illicit financial flows.
A key feature of the Model Framework will be the introduction of a non-conviction-based proceeds of crime (NCB POC) asset confiscation and forfeiture regime. NCB POC confiscation laws have been proven to be a highly effective method to confiscate the POC from those who profit from, but distance themselves from the criminal act. This is particularly important in transnational crime cases where frequently convictions cannot be secured in the country where the predicate offence occurred.
The Model Framework will enable adopting countries to not only meet their existing treaty obligations but also to implement best practice standards such as those recommended by the Financial Action Task Force (FATF). The FATF Recommendations set out a comprehensive and consistent framework of measures for countries to implement in order to combat money laundering and terrorist financing. Recently, following the FATF Plenary from 25-27 October 2023, the FATF has announced that there will be major amendments to the FATF Recommendations regarding criminal asset confiscation (published on 16 November 2023). The new FATF Recommendations are the first substantive change to the FATF Recommendations related to asset freezing, seizure, confiscation, forfeiture and associated cooperation since the FATF Standards were first developed in 1990. The FATF has explained that:
The revised Recommendations require countries to have policies and operational frameworks that prioritise asset recovery and establish non-conviction-based confiscation regimes in their legal systems. …
The revised Standards are a major milestone that will help bring about the necessary cultural shift to ensure that asset recovery becomes a core component of an effective crime prevention and mitigation strategy. It is now up to each country to effectively implement these revised requirements in their national frameworks, and use these tools to deprive criminals of their illicit assets and contribute to a safer society. The FATF will now work to revise relevant parts of its assessment Methodology for the next round of mutual evaluations to take into account the changes to the Recommendations.
Lexbridge’s Model Framework project is therefore very timely – as the change in FATF Recommendations means there will be an increased need for countries to develop laws in advance of mutual evaluation assessment processes. Our proposed Model Framework is perfectly suited to aid countries in meeting the higher standards raised by amendments to FATF recommendations 4 and 38. Having a Model Framework in place will be of significant benefit for the following key reasons;
– A regionally focused model law applies a focus on specific considerations achieved through extensive local stakeholder consultation,
– Adoption of all or part of a model law provides a more cost-effective approach in both staffing time and financial costs which can be a significant barrier for smaller jurisdictions,
– A consistent regional framework provides a strong basis for regional cooperation and improved interoperability, particularly through the use of regional networks, the provision of training and development of resources and delivery of mentoring assistance.
We have completed the consultation phase of the project, conducted between December 2022 and September 2023 with support from the American Bar Association Rule of Law Initiative, and involving outreach and consultations with Pacific Island countries and relevant multilateral fora. For further background information, see the Concept Paper and the Final Report on the Consultation Phase. Overall, there was strong support for the proposed Model Framework across the bilateral and multilateral stakeholders consulted.
We are now moving forward with the subsequent phases of development of the Model Framework. If you are interested in liaising with Lexbridge about the project, please contact us on: modellaw@lexbridgelawyers.com
