THE BRAZILIAN APPROACH TO ASSET TRACING AND RECOVERY

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• THE BRAZILIAN APPROACH TO ASSET TRACING AND
  RECOVERY
• Thiago Bottino
• Associate Professor of Law at FGV
• Ph.D. Constitutional Law
• Coordinator of the research project Injunctions
  and Seizures in Criminal Law supported by The
  Brazilian Department of Justice and United
  Nations Development Programme.

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• BRIEF PRESENTATION OF THE BRAZILIAN PRECAUTIONARY
  INJUNCTIONS
• Brazilian theory of judicial procedure has
  three classes of procedures cognitive,
  executionary and precautionary.
• Precautionary injunctions are measures taken to
  protect the final sentence from uselessness
  (guarantee the efficiency).
• The criminal conviction generates, besides the
  imprisonment sentence, two automatic obligations
• a) the obligation to indemnify the victim for
  damages caused by the crime, and
• b) the confiscation of the products obtained with
  the crime

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• PRECAUTIONARY INJUNCTIONS IN BRAZILIAN PROCEDURAL
  LAW
• There are three different temporary injunctions
  prohibiting a person from withdrawing,
  transferring, removing, dissipating or disposing
  of property
• SEQUESTRATION all assets acquired with
  products derived from crime (illicit assets)
• MORTGAGE real estate assets destined to cover
  the indemnity (licit assets)
• SEIZURE other assets destined to cover the
  indemnity (licit assets)

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• PRECAUTIONARY INJUNCTIONS IN BRAZILIAN PROCEDURAL
  LAW
• The precautionary injunctions are foreseen in
  the Brazilian Criminal Procedural Code (1941),
  but those provisions must be reinterpreted in
  order to observe the rights and principles
  guaranteed by Brazils new Constitution (1988).
• When the criminal code was promulgated, Brazil
  was facing a dictatorship (from 1930 to 1945).
  After that, we had another long military
  dictatorship (from 1964 to 1985).
• The procedural system has changed, due to the
  incorporation of new individual rights by the
  1988 Constitution.

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• CONSTITUTIONAL GUIDELINES FOR PRECAUTIONARY
  INJUNCTIONS
• Every precautionary warrant must be based on a
  substantial threat of irreparable damage or
  injury, (periculum in mora), and on a strong
  probability of success on the merits (fumus boni
  iuris).
• The grant or denial of a motion for a
  preliminary injunction does not lie within the
  discretion of the Court. It must respect specific
  guidelines (included implicit guidelines).

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• DIAGNOSIS OF THE PRECAUTIONARY INJUNCTIONS
  EFFICIENCY
• Theoretical approach
• Critics of jurists
• Practical approach
• which dispositions are invalidated by the judges
• which solutions are built by the Judiciary power
  to rule the situations in which there is no
  specific applicable law
• how the process of adaptation of the criminal
  procedural law to the constitutional text of 1988
  occurred

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• 90 decisions examined

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• 5 TOP CAUSES OF LOW EFFICIENCY
• 1) Multiplicity of injunctions
• Three different types of criminal injunctions.
• Other three different types of civil injunctions
  with the same name but distinct conditions,
  procedures and consequences.
• Other laws that create exceptions to the general
  law.
• Use of generic expressions.
• Annulment of the measures by superior courts.

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• 2) Vagueness of the law

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• 3) The incompatibility of the Procedural Code and
  the new Constitution Presumption of innocence
  and Periculum in mora.

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• 4) The Law is too old (60 years)

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• MAPPING OUT OF THE PROPOSALS PRESENTED BEFORE
  CONGRESS
• Seven bills examined so far. The recurring themes
  are
• The use of seized assets by the police forces
• The anticipated selling of the assets
• The forfeiture of licit assets related to the
  crime (any kind of relation) or when the illicit
  assets could not be found
• Most of them disregard the federal guidelines for
  elaboration
• Most of them are partially unconstitutional

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• ELABORATION OF A NEW BILL TO BE PRESENTED BEFORE
  CONGRESS
• Incorporation of the 40 FATF recommendations
• Creation of the Financial Intelligence Unit
  (1998) and of the Department of Asset Recovery
  and International Cooperation (2004)
• Study of other countries preliminary injunctions
  legislation
• Germany, France, Italy, England, Portugal,
  Spain, Argentina, Chile, Uruguay, Colombia,
  Mexico and United States

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• ELABORATION OF A NEW BILL TO BE PRESENTED TO THE
  CONGRESS
• Rules for international cooperation in Procedural
  Code.
• Bilateral treaties Spain, Cuba, China, Korea,
  USA, Colombia, Peru, France, Portugal and Italy
  and, soon, Switzerland
• Regional treaties OAS, OECD, Mercosul and UN
  conventions.
• Survey among federal and state judges
• what they believe to be the major difficulties
  in the application of injunctions and forfeitures.

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• CONCLUSION
• The economic criminality is different from the
  classic one. The possibilities offered by
  technological development, stimulate the rise of
  conducts practiced in big scale by complex
  organizations with great potential of damage.
• Brazil has suffered several waves of white
  collar crime, and it is common sense that the
  economic and social costs inherent to this kind
  of crime are widely superior than other crimes.
• Repairing the damages caused by financial crimes
  as well as recovering the ill-gotten profits
  represent not only an important measure for
  achieving justice but also represent a huge brunt
  on the finances of the organized crime.

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• THANK YOU!
• E-mail thiago.bottino_at_fgv.br