December 23, 2010

President Signs Whitehouse, Cornyn Bill to Crack Down on Foreign Criminal Assets

Legislation Makes it Easier to Seize Assets, Preventing them from Funding Criminal Enterprise

Washington, DC – President Obama has signed the Preserving Criminal Assets for Forfeiture Act into law. Introduced by two members of the Senate Judiciary Committee, Senators Sheldon Whitehouse (D-RI) and John Cornyn (R-TX), the bill would make it easier to freeze the assets held in the United States by foreign criminals. In doing so, the legislation will cut down on the funds available for international criminals to further their enterprises. It will also encourage foreign countries to assist the United States in recovering the overseas assets of U.S. criminals.

“This legislation will make sure that foreign criminals do not avoid accountability by moving their assets beyond the reach of the law,” said Whitehouse. “Assisting other nations in cracking down on international criminal activity also will help us recover the ill-gotten proceeds that U.S. criminals have hidden abroad. I am pleased the president has signed this into law.”

“The Preserving Foreign Criminal Assets for Forfeiture Act will arm law enforcement with a critical tool to help our foreign partners combat criminals who seek to shield their ill-gotten assets within our borders. It will thwart criminals’ attempts to evade the law by hiding those assets before our foreign allies are able to secure a final ruling against them. I was pleased to work with my colleagues across the aisle and with the U.S. Department of Justice on this bill to help keep law enforcement one step ahead of foreign criminals,” said Senator Cornyn.

The Senate and House unanimously passed the bill earlier this month.

The Preserving Foreign Criminal Assets for Forfeiture Act will equip law enforcement with an important tool to freeze the ill-gotten gains of foreign criminal enterprises. The U.S. government is authorized to assist foreign nations seeking to enforce their forfeiture judgments, for example by seizing the proceeds of large-scale international fraud, drug trafficking, or money laundering. Under recent decisions, however, our courts lack the power to restrain known criminal assets prior to the issuance of a foreign forfeiture judgment. Criminals are therefore able to move and hide their assets as soon as they find out they will be subject to such proceedings, or even while the proceedings are ongoing, leaving U.S. courts with no property to freeze once the foreign forfeiture judgment is entered. Because of this hole in the law, foreign criminals have been able to shield hundreds of millions of dollars worth of ill-gotten property.

The bill will fix that problem by preventing criminals from removing assets from the United States during the pendency of foreign forfeiture proceedings. Subject to appropriate due process protections that make sure only criminal assets are targeted, U.S. courts will have the power to freeze the assets until the foreign forfeiture proceedings have concluded. The legislation will bring the treatment of foreign criminals’ assets in line with that of domestic criminals. In so doing, the bill will increase the ability of U.S. law enforcement to obtain similar assistance from foreign governments.


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Meaghan McCabe, (202) 224-2921