FATF ¦ R.4 Con­fis­ca­tion and Pro­vi­sio­nal Mea­su­res

Recommendation 4: Confiscation and Provisional Measures — Strengthening Asset Recovery to Deter Financial Crime

Confiscation and provisional measures are among the most powerful tools in the fight against money laundering, terrorist financing and related predicate offences. Recommendation 4 of the FATF standards sets out a clear expectation: jurisdictions must be able to identify, freeze, seize and ultimately recover the proceeds and instrumentalities of crime promptly and effectively. When implemented robustly, these measures both deny criminals the fruits of their wrongdoing and restore assets to victims and the public sphere — converting enforcement into a visible deterrent and a source of public benefit.

Designing an effective asset recovery framework

An effective regime begins with prioritisation, sufficient resourcing and clear institutional arrangements. Countries should regularly review their asset recovery frameworks to ensure operational effectiveness and allocate the necessary investigative, prosecutorial and judicial capacity. Coordination across financial intelligence units, law enforcement, prosecution, asset management units and tax authorities is essential; Recommendation 4 reinforces the link with Recommendation 2 on domestic cooperation. Without structured cooperation and dedicated expertise, valuable time is lost and assets dissipate.

Balancing speed and safeguards in provisional measures

Provisional measures — immediate steps to withhold, suspend, freeze or seize assets — are critical to prevent dissipation. The FATF expects states to enable rapid action, including ex parte applications and, where appropriate, temporary measures executable without prior judicial authorisation provided there is prompt judicial review. These mechanisms must be calibrated to operate quickly while preserving fundamental procedural safeguards for bona fide third parties and avoiding undue restrictions that hinder effective action.

Bastian Schwind-Wagner _Follow "Recommendation 4 empowers jurisdictions to swiftly freeze, seize, and confiscate criminal assets while safeguarding bona fide third-party rights. When paired with strong coordination, rapid provisional measures, and transparent asset management, it transforms enforcement into real deterrence and meaningful restitution."

Confiscation models and legal flexibility

Recommendation 4 recognises a range of confiscation tools: conviction-based confiscation, extended confiscation targeting assets disproportionate to lawful income, and non-conviction-based confiscation where consistent with domestic legal principles. This flexibility allows jurisdictions to adopt models suited to their legal traditions while ensuring capacity to deprive criminals of illicit gains. Requiring an offender to account for the lawful origin of assets can be a practical shift in evidential burden where permitted by law, accelerating recovery in cases of unexplained wealth.

Preservation, management and return of assets

Effective asset management is part of the lifecycle of recovery. States should have mechanisms to preserve value (including pre-confiscation sale when appropriate), manage frozen or seized property, and dispose of confiscated assets in ways that are transparent and socially beneficial. Establishing an asset recovery fund can channel proceeds into law enforcement, victim compensation, health or education, reinforcing public trust. Equally important are procedures for returning property to legitimate owners and compensating victims, ensuring justice beyond mere punishment.

Leveraging tax authorities and international cooperation

Cooperation with tax authorities enhances detection and recovery, particularly where illicit proceeds intersect with undeclared income or tax liabilities. Cross-border mutual legal assistance, asset tracing, and timely information exchange are indispensable to follow assets that move through international financial systems. Recommendation 4’s emphasis on coordination — domestically and internationally — reflects the reality that asset recovery is often a transnational endeavour.

Conclusion — implementation is the test

The technical architecture of confiscation and provisional measures is well established in FATF Recommendation 4, but the real test lies in implementation: resourcing, inter-agency coordination, legal design that balances speed with rights protections, and mechanisms for asset preservation and return. Jurisdictions that close the gap between standard and practice not only recover value but signal that financial crime will not pay.

Dive deeper

• FATF ¦ The FATF Recommendations ¦ Link
• FATF ¦ Luxembourg’s measures to combat money laundering and terrorist financing ¦ Link