CONTENTS
- 1. Asset Recovery | The Concept and the Core of the Criminal Group's Work
- - Principal Legal Tools and the Structure of Recovery
- 2. Asset Recovery | Features of Cross-Border Asset Recovery
- 3. Asset Recovery | Target Assets and Types of Disputes
- - Common Types of Disputes
- 4. Asset Recovery | Procedure and Response Strategy
- - Securing Evidence Early
- - Pursuing Criminal and Civil Proceedings in Parallel
- - Structuring a Request for International Cooperation
- 5. Asset Recovery | Checkpoints Every Company Should Confirm
- - How Daeryun Can Help
1. Asset Recovery | The Concept and the Core of the Criminal Group's Work
Asset recovery is the process of tracing, freezing, and recovering property that has been diverted or hidden through crimes such as embezzlement, breach of trust, fraud, illegal deposit-taking, virtual asset crime, trade secret leaks, and corruption, by means of confiscation, collection, or return.
As economic crime increasingly crosses borders and funds are dispersed across foreign accounts, offshore entities, virtual asset wallets, and nominee structures, asset recovery has grown into a multifaceted practice that combines criminal proceedings, international cooperation, digital forensics, enforcement of foreign judgments and rulings, and responses to regulators.
In Korea, the tracing and recovery of criminal proceeds rests on important legal foundations such as the Act on Regulation and Punishment of Criminal Proceeds Concealment, the Act on Special Cases concerning the Confiscation and Recovery of Corrupt Property, and the Act on International Judicial Mutual Assistance in Criminal Matters, and recovering assets located abroad also calls for reviewing bilateral mutual legal assistance treaties, the UN Convention against Corruption (UNCAC), and the law on recognition and enforcement of foreign judgments.
In corporate criminal cases in particular, recovery of the loss is often the central issue in an investigation, so an asset recovery strategy matters both defensively and offensively.
For example, where company funds have been diverted to an outside account through an officer's or employee's embezzlement, transferred to an overseas subsidiary, a special purpose company, or an offshore entity, or converted into virtual assets, effective recovery through a civil suit alone can be difficult.
In such cases, the odds of actual recovery improve when a criminal complaint, account tracing, search and seizure, identification of criminal proceeds, confiscation and collection, return to victims, and requests for international cooperation are combined into one coherent strategy.
Principal Legal Tools and the Structure of Recovery
Asset recovery does not end with a single procedure; it is a structure in which several legal tools operate at the same time.
The principal ones used together are confiscation and collection in criminal proceedings, the return of crime-victim property, freezing and preservation through international criminal cooperation, domestic recognition and enforcement of foreign judgments and arbitral awards, and civil damages and compulsory execution.
Confiscation and Collection of Criminal Proceeds
The Act on Regulation and Punishment of Criminal Proceeds Concealment governs the concealment, disguise, and receipt of criminal proceeds connected to specified crimes, and it includes separate special provisions on confiscation, collection, and international cooperation.
It also directs that the relevant provisions of the Act on Special Cases concerning the Prevention of Illegal Trafficking in Narcotics apply, with respect to confiscation, collection, and international cooperation, broadening the range of criminal tools available for recovering criminal proceeds at home and abroad.
Return of Victim Property
Crime-victim property arising from corruption or certain property crimes may raise the question of a structure in which the state confiscates or collects it and then returns it to the victim.
The Act on Special Cases concerning the Confiscation and Recovery of Corrupt Property provides that, for certain crimes, confiscated or collected crime-victim property is to be returned to the victim.
In other words, a legal channel exists through which the outcome of a criminal trial can extend beyond punishment to the actual recovery of the loss.
Freezing and Preservation Through International Cooperation
Property moved abroad is hard to freeze through domestic criminal proceedings alone, which makes international cooperation important.
The mutual legal assistance treaties that Korea has concluded include provisions for cooperation in restricting the disposition of, freezing, and confiscating property acquired through crime, and the requested state takes the necessary measures within the limits permitted by its own law.
Asset recovery is thus also an international criminal practice that involves designing a cooperative framework with foreign judicial authorities.
Enforcement of Foreign Judgments and Arbitral Awards
Asset recovery often cannot be resolved through criminal proceedings alone.
Where a damages judgment or arbitral award has already been obtained abroad, or where a foreign court judgment must be enforced against domestic assets, the structure for recognizing and enforcing foreign judgments must be reviewed.
The Supreme Court allows domestic enforcement of a foreign judgment where requirements such as reciprocity, proper service, the absence of any violation of public order and good morals, and international adjudicatory jurisdiction are met.
This is highly important for connecting a judgment a company has obtained abroad to the recovery of domestic assets.
2. Asset Recovery | Features of Cross-Border Asset Recovery
In asset recovery, cross-border recovery is fundamentally different from domestic recovery.
Where property is located abroad or has moved through a foreign corporation, an offshore account, a trust, a virtual asset exchange, or a multinational affiliate, the key questions become which country to seek preservation in first and through what procedure, whether to pursue criminal cooperation and civil enforcement in parallel, and how to secure the cooperation of foreign regulators or financial institutions.
The UNODC devotes the UN Convention against Corruption (UNCAC) to asset recovery, providing a framework for international cooperation in tracing, freezing, confiscating, and returning assets acquired through corruption.
Internationally as well, asset recovery is treated as a distinct field of law premised on cooperation between states.
In practice, the patterns that frequently appear in cross-border asset recovery are as follows.
Type | Features |
Concealment in foreign accounts | Transfer traces remain, but the true identity of the account holder is often hard to confirm |
Use of offshore entities | An offshore structure is used to conceal the beneficial owner |
Conversion into virtual assets | Rapid movement and dispersed storage make recovery harder if early tracing fails |
Acquisition of foreign real estate | Criminal proceeds are effectively converted into real estate |
Internal diversion within a multinational | Accounting and contract structures among the headquarters, local entities, and branches are intertwined |
Holding a foreign judgment | Recognition and enforcement in Korea is required before actual recovery is possible |
Matters like these call for domestic and foreign digital forensics, accounting analysis, tracing of fund flows, international cooperation, coordination with foreign attorneys, and the design of an enforcement strategy, all carried out together.
Where the company is the victim in particular, a dual-track strategy is needed, one that secures the prospect of seizure and confiscation through criminal proceedings while separately preparing a structure for civil enforcement.
The firm provides one-stop legal services in asset recovery matters through its cooperative relationships with law firms around the world, including SJKP in the United States, and through collaboration with its Digital Forensics Center.
3. Asset Recovery | Target Assets and Types of Disputes
Assets subject to recovery are not limited to cash; the following are the assets most often targeted.
Cash, Deposits, Stocks, and Bonds
These are the most typical targets of recovery.
Where funds have moved through multiple layers of financial accounts, passed through accounts in another person's name, or been laundered through a corporate account, however, proving the actual ownership relationship is needed.
Virtual Assets and Electronic Wallets
These have become a frequent issue of late.
With virtual assets, rapid transfers, decentralized storage, use of foreign exchanges, and mixing services can make recovery very difficult once early tracing fails.
Going through digital forensics steps such as securing exchange records, identifying wallet addresses, and chain analysis is therefore indispensable.
Real Estate, Corporate Shares, and Shell-Company Assets
Proceeds from embezzlement, breach of trust, and fraud are often converted into real estate or into shares of a corporation held in a third party's name.
This calls for an ownership-structure analysis more complex than the attachment of deposits, and issues of nominee structures or title trusts are sometimes intertwined.
Economic Gains Obtained Through Trade Secret or Technology Leaks
In asset recovery, not only the misappropriated technology itself but also the revenue, profit, and investment a competitor obtained by using that technology can become the issue in recovery or in calculating damages.
In other words, asset recovery sometimes targets the entire economic value created through the unlawful act, not just tangible assets.
Common Types of Disputes
Type of Dispute | Key Issues |
Recovery from embezzlement and breach of trust | Routes of fund diversion, corporate loss, attribution to accomplices and third parties |
Recovery from fraud and unauthorized fund-raising | Movement of invested funds, allocation among individual victims, return of criminally obtained property |
Trade secret misappropriation | Removal of technical data, external transfer, identifying the gains from the infringement |
Recovery of assets hidden overseas | Unwinding foreign accounts, offshore entities, and trust structures |
Recovery of virtual assets | Exchange cooperation, wallet tracing, feasibility of freezing |
Enforcement following a judgment or arbitral award | Recognition of foreign judgments and domestic compulsory execution |
4. Asset Recovery | Procedure and Response Strategy
In asset recovery, success often turns on the steps taken in the period immediately after the incident.
Basic Response Procedure for Asset Recovery
- Organizing the facts and the scope of the loss
- Analyzing the flow of funds and the transaction structure
- Identifying the relevant accounts, entities, real estate, and virtual asset wallets
- Filing a criminal complaint and structuring cooperation with investigative authorities
- Reviewing the feasibility of seizure, search, preservation, confiscation, and collection of equivalent value
- Developing a strategy for returning property to victims or pursuing civil execution in parallel
- For overseas assets, initiating international cooperation or local enforcement procedures
Securing Evidence Early
Emails, accounting vouchers, electronic approvals, ERP records, messenger logs, account statements, contracts, foreign remittance records, and server logs are the starting point for asset recovery.
When evidence is secured late, the pace of recovery cannot keep up with the movement of assets, and overseas remittances or transfers of virtual assets in particular can sharply reduce the chances of recovery within a short window.
Pursuing Criminal and Civil Proceedings in Parallel
Filing a criminal complaint to draw on the compulsory investigative powers of the authorities matters a great deal, yet relying on the criminal process alone can be risky.
In practice, criminal proceedings are often pursued alongside civil measures such as provisional attachment, claims for damages, and the recognition and enforcement of foreign judgments.
Because criminal cooperation can be slow for overseas assets in particular, prompt civil preservation in any available jurisdiction should be considered in parallel.
Structuring a Request for International Cooperation
Recovering assets located abroad depends on which country is approached, on what supporting materials, and to what extent.
A mutual legal assistance treaty covers not only seizure, search, and verification but also restrictions on the disposition of criminal proceeds and cooperation in confiscation, so the request should be strategic and cover the full sequence: identifying the assets to be recovered → establishing the connection to the crime → resolving third-party rights → designing the return structure.
5. Asset Recovery | Checkpoints Every Company Should Confirm
In an asset recovery case, the first matters a company should confirm are as follows.
Checklist Item | What to Review |
Structure of the loss | Its legal character, whether embezzlement, breach of trust, fraud, or technology leakage |
Type of asset | Whether it is cash, real estate, equity, virtual assets, or a foreign account |
Speed of movement | Whether further diversion is possible |
Preservation of evidence | Whether computer records, emails, and accounting data can be secured |
Recovery route | Which route is effective among criminal confiscation and collection of equivalent value, return to victims, and civil execution |
Overseas elements | Whether there is any connection to foreign accounts, foreign entities, foreign judgments, or foreign regulators |
Third-party issues | Whether assets are attributed to third parties such as a spouse, family member, affiliate, or nominee titleholder |
Reputational risk | Whether there is a need for listing disclosures, notice to business partners, or investor response |
The most common reason companies fail to recover assets is that they begin responding only well after the loss has occurred.
The larger the amount at stake, the more sophisticated the concealment, and the more time passes, the further accounts are cleared, entities are wound up, assets are converted, and funds are moved abroad.
For this reason, internal investigation and the recovery strategy should begin at the same time.
How Daeryun Can Help
Daeryun Law Firm brings together specialists in criminal law, international criminal law, finance, tax, fair trade, and digital forensics, who work together through an asset recovery and corporate criminal task force to provide comprehensive legal services across domestic and cross-border asset recovery matters.
· Internal investigation and digital forensics support
· Responding to confiscation, collection of equivalent value, and return of property
· Cross-border asset recovery and international cooperation
· Coordinating enforcement of foreign judgments and arbitral awards
· Integrated response to corporate reputational and regulatory risk
Cross-border corporate crime, virtual asset crime, and cases involving assets hidden overseas call for the ability to handle criminal proceedings, international cooperation, and enforcement strategy at the same time.
If you would like to experience one-stop legal service across the entire asset recovery process, from asset tracing, preservation, confiscation and collection of equivalent value, and return of property to international cooperation and the enforcement of foreign judgments, you can 🔗schedule a consultation with a criminal defense attorney.
