Local and International Assets Recovery
June 17, 2024

Author: Ing. Daniel Calderón


Our Partner, Financial and Tax Advisor, Engineer Daniel Calderón is part of the October 2021 issue of Links Magazine, a publication of Cámara Ecuatoriano Británica.

📰 You will find the article on page 89

For many years, one of the main causes in the Region for corruption to be generated at a public and private level, have been the actions of impunity by control agencies and the judiciary, respectively, in relation to investigation processes. , prosecution of economic crimes and recovery of assets. In the Ecuadorian case, the UAFE Financial and Economic Analysis Unit proposed in 2018 an asset recovery protocol, with specific international cooperation mechanisms regarding the location of origin, freezing, seizure, confiscation and return of looted assets, specifically related to the embezzlement or embezzlement of public funds. In the private sphere, these actions depend even more on the diligence and ability of prosecutors and judges to carry out coordinated actions with timely information. Additionally, the lack of financial transparency on the part of offshore jurisdictions, as they are part of complex structures to hide, disguise or conceal movable and immovable assets of people and organizations with a history of criminal behavior, have increased the problem.

Although the era of bank secrecy or secrecy may be over, the challenges to effectively recover assets resulting from crimes derived from corruption and fraud practices, such as illicit enrichment, embezzlement, fraud, money laundering, tax fraud , unjustified private enrichment, among others; They depend on coordination between the different actors for the exchange of information and international criminal assistance when appropriate, and above all, on a preliminary forensic investigation that makes it possible to identify, value, locate liquid assets and those of economic significance at a global level.

It is important to emphasize the term fraud, since it can also cover any crime that uses deception as its main modus operandi to obtain illicit profits. The Black’s Law Dictionary defines it as: “a deceptive or deliberate practice, which is resorted to with the intention of depriving another of his right, or in some way to harm him. Unlike negligence, it is always positive, intentional.” According to the statistics of ACFE, the International Association of Fraud Examiners, losses due to fraud are produced in greater proportion by senior managers. In the public sector, they could be Ministers of State, PEPs and authorities of a higher hierarchical level; while in the private sector it would be Directors, Managers and Shareholders. These events are generally designed and executed by this type of profiles, which tend to have the greatest repercussion at the media level. Several examples, the scandals of Petroecuador, Odebrecht, Enron, Madoff, MF Global, WorldCom, and more. Pending task, reduce the cost-benefit that a white-collar criminal or a criminal organization of this type can perceive.

Therefore, if a person, organization and even the State, has been the victim of a deception by a third party and their resources have been reduced, there are corporate intelligence alternatives to be able to size and quantify the potential for recovery of an obligation and compensate the damages caused. Rigorous question, what alternatives currently exist? In a globalized world, with a large amount of data scattered in various databases, both from open and closed sources with exclusive or paid access, these can be organized through due diligence processes, or better known as extended due diligence, to be able to know in greater depth the scope of the assets that a natural or legal person owns, both in Ecuador and in the rest of the world.
Where to start? The answer is not simple, but there is always information available to trace a route for obtaining specialized information, with the aim of raising a detailed detail of assets in those places where the person has economic, family or business interests, for example, information local and external tax administration thanks to the efforts of the tax administrations to exchange two-way information through Multilateral Agreements, bank statements, social engineering information, external audit reports, notes to the financial statements, reports from third parties abroad by compliance and investigation partners, and other primary sources that each jurisdiction usually has on the web. One of the key pieces in these processes is having a local and international team for operational and financial intelligence analysis, in order to address requirements and facilitate the search for objectives for high-level economic research, especially in the private sphere.




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