Transforming Asset Recovery Offices (AROs) to Enhance Their Role in Combating Money Laundering

Abstract

Purpose-This paper critically examines the recent legislative initiative of the European Union (EU)-the new Directive 2024/1260 on asset recovery and confiscation. It focuses particularly on the provisions that revamp Asset Recovery Offices (AROs) as part of the EU's anti-money laundering and countering the financing of terrorism (AML/CFT) strategy. The paper explores why the reform of AROs was considered necessary, highlights the key objectives, rules, and principles governing AROs, and discusses the challenges and opportunities that arise as AROs are strengthened. Design/methodology/approach-This paper draws on reports, legislation, legal scholarship and other open-source data on the EU legislative initiative to enhance the role and effectiveness of AROs in AML/CFT. Findings-The new Directive 2024/1260 on asset recovery and confiscation establishes a comprehensive framework for AROs, aimed at improving their effectiveness and cooperation. If organizational challenges are properly addressed, AROs will greatly strengthen the EU's capabilities in the field of AML/CFT. Originality/value-This study is the first to explore the new roles and powers of AROs under Directive 2024/1260 on asset recovery and confiscation, providing a critical analysis of how the Directive addresses longstanding inefficiencies in asset recovery. It examines the harmonization of AROs' powers, enhanced mechanisms for cross-border cooperation, and improved access to data resources. The study assesses the challenges and opportunities related to AROs operation, offering insights into the Directive's transformative potential for combating crime within the EU.

Keywords: money laundering, European Union, Asset Recovery Offices (AROs), asset tracing, confiscation, criminal proceeds