An increasing number of countries are party to a treaty on cooperation in criminal matters. These treaties are designed to enhance cooperation between states in criminal investigations and prosecutions.

The common name of a treaty regulating cooperation between states in criminal matters is “Mutual Legal Assistance Treaty” (MLAT). MLAT treaties can be a bilateral agreements between two countries or a multilateral agreement between three or more countries.

Legal Assistance

The extent to which countries in a MLAT agree to provide legal assistance differs. The lightest form of cooperation (“tier one”) entails the provision of information about a suspect or his assets located in the state.

The next level up (“tier two”) is the cooperation in the criminal investigation where the police in both states will work closely together in the investigation. This can entail wire tapping the suspect or also freezing the assets of the suspect.

The third tier entails the recognition and execution of court rulings in criminal matters issued by a foreign court provided that the offence is considered a crime under the laws of that country as well (“dual criminality rule”).

Extradition

If the local court decides that it is the person can be extradited to the requesting country to stand trial. The European Union has the most far reaching MLAT treaty in place between the member states. It covers cooperation on information exchange, criminal investigations and the recognition of judicial decisions.

In the case of recognition of judicial decisions, a member state will recognize and execute a court decision of another member state even if the crime concerned is not a criminal offence in the receiving state. Executing will be automatic in other words.

Within the current legal framework of the EU concerning cooperation in criminal matters assets can be frozen in one member state if requested by the court of another member state without the court of the receiving member having examined the confiscation or freezing order.

Asset Freezing

When the authorities of a country suspect a person of a crime or allege that an account or company has been in connection with a crime under a MLAT treaty they can request another country to confiscate or freeze the assets of this third party. They can do so with a court order from their own country and it can take a long time for those assets to be accessible for the suspect again. The person hit with the freezing or confiscation order can try to have their assets unfrozen but they will have to go to the court of the country that issued the freezing order. This can mean that they will be confronted with court proceedings in a foreign language and a legal system. It is already very difficult to defend yourself and your assets against seizure or freezing orders when they are issued by the court of your own country, let alone by a foreign one.

Commonwealth

The Commonwealth MLAT treaty is in force between all Commonwealth countries (such as Seychelles and Belize) and covers cooperation in criminal investigations, this includes asset freezing and confiscation but it doesn’t include the dual criminality rule.

Countries with MLAT treaties

Countries that have not concluded a great number of MLAT treaties are the United Arab Emirates and Panama. Panama has some treaties in place with countries in the region plus the United States. The treaties that Panama has concluded with other countries are generally tier 2 agreements, so only cooperation in criminal investigations and not the recognition and execution of foreign court orders.

The United Arab Emirates is not party to a multilateral MLAT treaty, but has concluded some bilateral MLAT treaties; for instance with Italy, Australia, the United Kingdom, Russia and Germany.

The way the United Arab Emirates approaches the MLAT treaties is on a country by country basis which assures that they can maintain a high level of control of what they are agreeing to. These MLAT treaties are typically limited to tier two agreements. In the case of the tier 2 agreement with the UK, there is no double criminality requirement for information requests but for confiscation and freezing orders there is.

MLAT Treaties – Things to consider

MLAT agreements can be a valuable tool for fighting crime. However if a country is party to a MLAT that does not include the dual criminality rule then this is detrimental to freedom and legal certainty. Theft and murder are crimes across the world anyway so the absence of the dual criminality rules doesn’t impact these crimes but it would be the more frivolous laws that would then have a much further reach.

Consider that almost everything is prohibited somewhere. It would further encourage states to come up with new crimes and prohibitions which go against the common intuition of most people as to what should constitute a crime and what not.

There is a much less scope for frivolous laws when a country is not a party to MLAT treaties that include this rule. We suggest that when asset protection is a concern it makes sense to put your assets in a jurisdiction that is only enforcing its own laws.