This article originally appeared in ThoughLeaders4’s Dispute Magazine, Issue 2.
Engaging in transnational asset recovery - with individuals, private businesses, sovereign entities, quasi-sovereign entities - requires significant investment of time and effort and can easily become extremely costly without producing results. With an outcome that is far from guaranteed, an early assessment of recoverability can be critical to ensuring a favourable outcome.
But what does it take to have a successful investigation and how can you ensure you are best placed to achieve an information advantage?
Assemble The Best Team
Identifying and assessing the activities and assets or likely assets of the target requires a combination of dogged creative investigative skills and access to public and non-public data on a global scale. It also requires close collaboration between the investigators and the legal team running the case.
What does this collaboration actually mean? Without guidance from the legal team, even a seasoned investigator may uncover interesting information that for one reason or another, does not support the legal strategy. The legal experts are uniquely positioned to guide the investigator on the type of data that could have the most impact given the nuances of the particular case. This could mean, for instance, assets in a jurisdiction whose legal system is more favourable to asset seizure.
A prime example of this in action was the 2012 case of Elliot Advisors and their pursuit of Argentine sovereign debt. The combination of good sleuthing and quick decision making resulted in the seizure of an Argentine naval vessel off the coast of Ghana.
Similarly, the investigator can inform the legal strategy, ensuring that the legal team maintains an information advantage over the opponent. For example, the investigators may uncover information that could help persuade the opponent to reach a favourable settlement without having to resort to complicated and time consuming asset recovery processes.
Hunt Then Assess
No two asset traces are the same and a key differentiator to successfully recovering assets lies in the information that can be gathered in each jurisdiction. This ‘hunt’ for information is driven by three key objectives:
- Finding recoverable assets
- Finding information that can be used as leverage that can be used as part of negotiation/settlement
- Signalling that you have an information advantage
Not all information gathering tactics are viable in each country and there must be an assessment of the limitations of what can be found legally in a given jurisdiction. For example in countries with strict data privacy laws such as Germany, it can be more difficult to find information about individuals versus countries like the United Kingdom or United States. The savvy investigator -- working with local resources, even in the most obscure jurisdictions -- will be perfectly placed to guide the legal team on what can be obtained and how.
Once you’ve gathered all viable information, as efficiently as possible, you can analyse how difficult the recoverability is going to be and the corresponding strategy. In some cases, you may find that when all information avenues have been exhausted and there are no more good leads, you may have to step away. You may also conclude that the party genuinely can’t pay as they don’t have the assets so no longer wish to pursue.
Use Creative Research Techniques
It's highly likely that those who want to conceal their assets are always going to find a way to do so. Although it is possible to nominally conceal things through the structures of corporate secrecy there are many ways to reveal evidence of asset ownership. In countries that have corporate secrecy laws - or where people use complex corporate structures to conceal assets - you can use creative research techniques to uncover ownership details.
All of this can be done ethically and the aggressive ‘hunting’ of information doesn’t have to mean untoward or illegal. Key to unlocking this information is the use of best-in-class investigators who utilise legal techniques and tactics to uncover information. The pandemic has forced many investigators to develop more flexible approaches as it is no longer possible to travel and conduct witness interviews as part of the evidence-gathering process.
It’s often less complicated than you might think. For example, social media can be an excellent source of rich information, especially in the context of assets that may have been handed over to other family members or other nominees. It would surprise you just how often a family member is the key to identifying an asset by posing in front of a car or yacht to show off to friends on Instagram!
Look For Patterns
Nationals of different countries have tendencies to put their assets in certain places as they follow a path established by members of their networks. There are lots of patterns associated with different nationalities and common tactics that can be deployed in these circumstances.
Even as corporate transparency legislation changes in these preferred jurisdictions, these patterns will adapt and evolve reflecting the advice given by a reasonably small handful of tax advisors or patterns shared through social circles.
Work In Real-time
Speed is an essential factor in successful asset recovery, and those that act quickly often see the best results. There is no point in spending weeks producing a long report that is either 90% irrelevant or soon out of date. The most effective kind of asset tracing is an ongoing, agile process, where tactics can quickly shift as new information and new leads are uncovered around the world. A free exchange of information, ideas and hypotheses between the investigator and the legal team is vital to be ready to seize opportunities when they arise.
The Ground Truth Platform matches clients to curated and vetted Network Partners around the globe. Rapidly access a community of world-class investigators in over 200 jurisdictions and ensure you have a successful investigation. Get started today.