Legal Obstacles to Recovering Stolen Assets from Offshore Jurisdictions: Secrecy, Ownership Opacity and the Limits of International Cooperation

Abstract

Offshore financial centres remain the principal destination for the proceeds of grand corruption, and the legal architecture of secrecy that they offer – bank confidentiality, opaque legal persons and arrangements, protective trust law and professional privilege – continues to defeat asset recovery efforts even after two decades of international transparency reform. This article analyses the legal obstacles to recovering stolen assets from offshore jurisdictions from the perspective of the requesting state. It examines the nature and scale of offshore wealth, identifies the specific doctrines and practices that impede tracing, freezing and confiscation, and evaluates the strategies that states have developed in response: non-conviction based forfeiture, unexplained wealth orders, administrative freezing of the assets of foreign politically exposed persons, registers of beneficial ownership and automatic exchange of financial account information. Drawing on leading judgments of the courts of England and Wales and the Privy Council and on the revised FATF and OECD standards, it argues that the decisive shift lies in the transfer of the burden of transparency from the requesting state to the asset holder and the intermediary, and outlines the implications for the Republic of Uzbekistan.