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The Financial Action Task Force (FATF) has recently released an extensive 340-page global guidance on asset recovery, marking a significant shift in international financial crime enforcement. Moving beyond its traditional focus on corruption, the new framework expands asset recovery mechanisms to cover a wide range of economic and financial crimes, including fraud, cybercrime, investment scams, money laundering, and cryptocurrency-related offences.

This development reflects the evolving nature of transnational crime and the growing need for coordinated international responses to trace, seize, and repatriate illicit assets.

What is new in the FATF Asset Recovery Guidance?

The updated guidance introduces a comprehensive lifecycle approach to asset recovery. It outlines best practices across every stage, including:

• Establishing robust legal and policy frameworks
• Identifying and tracing illicit assets
• Preserving and managing seized properties
• Ensuring international cooperation for cross-border recovery
• Restitution and compensation of victims

A notable feature of the guidance is its victim-centric orientation, which emphasizes restoring assets to affected individuals rather than limiting recovery to punitive confiscation.

Expansion Beyond Corruption

Unlike earlier frameworks that primarily addressed corruption-linked assets, the new guidance broadens its scope to include:

• Financial fraud and Ponzi schemes
• Cyber-enabled crimes and digital laundering
• Investment scams and real estate fraud
• Cryptocurrency misuse and virtual asset laundering

This expansion acknowledges that modern financial crimes increasingly exploit digital platforms, complex financial instruments, and cross-border networks.

India’s Contribution: Enforcement Directorate as a Model

The FATF guidance draws extensively from India’s enforcement experience, particularly the work of the Directorate of Enforcement (ED) under the Prevention of Money Laundering Act (PMLA). Several Indian cases are highlighted as global best practices:

• Agri Gold Investment Scam: Coordination between ED and Andhra Pradesh CID led to the attachment and restoration of assets worth ?6,000 crore to defrauded investors.
• IREO Realty Case: Demonstrated India’s use of value-based confiscation, with assets worth ?1,800 crore attached, equivalent to proceeds of crime transferred abroad.
• BitConnect Crypto Fraud: ED seized cryptocurrencies worth ?1,646 crore, secured them in cold wallets, and attached additional properties worth ?500 crore, showcasing effective handling of virtual assets.
• Rose Valley Scheme: Cited as an example of victim restitution, where funds collected through fraudulent debentures were diverted via shell companies.

The guidance also refers to India’s Fugitive Economic Offenders Act, highlighting the principle of fugitive disentitlement, which allows confiscation of assets belonging to offenders who evade judicial processes.

About FATF

The Financial Action Task Force is an intergovernmental body established in 1989 by G7 countries at the Paris Summit. Headquartered in Paris, France, FATF sets global standards to combat:

• Money laundering
• Terrorist financing
• Proliferation financing

Its core functions include:

• Issuing and updating FATF Recommendations
• Conducting mutual evaluations of member countries
• Identifying high-risk jurisdictions through grey and black lists
• Promoting international cooperation in financial investigations
• Addressing emerging threats such as crypto laundering and cyber-financing

FATF’s work aligns closely with UN Security Council resolutions and G20 mandates.

Significance for Global and Indian Context

The new asset recovery guidance strengthens the global financial architecture by:

• Enhancing cross-border cooperation in financial investigations
• Improving recovery of illicit assets in complex digital crimes
• Reinforcing the credibility of national enforcement agencies
• Supporting victim justice and economic stability

For India, FATF’s recognition reinforces its position as a key stakeholder in global financial governance and validates its evolving legal tools to combat economic offences.