The Ethiopian Parliament approved the Asset Recovery Proclamation No. 1364/2025 on January 9, 2025, and it entered into force upon its publication in the Negarit Gazeta on May 2, 2025. The law fills a long-standing gap by creating civil-based mechanisms to trace, freeze, and confiscate unlawfully obtained or unexplained assets.
Why it matters
Designed to combat corruption, economic crimes, and illicit financial flows, the proclamation strengthens economic integrity, bolsters tax administration, and aims to restore investor confidence.
Key Provisions
- Broad definition of assets: Movable and immovable property, financial instruments, virtual assets (including crypto), and any income derived from them.
- Comprehensive recovery chain: Identification, tracing, freezing, seizure, management, and confiscation of criminal or unexplained property.
- Wide personal scope: Applies to both natural and legal persons, with limited exemptions for certain public or international bodies.
- Retroactive application: Targets unexplained assets accumulated within the past ten years when the total value exceeds ETB 10 million.
Investigative Powers and Asset Control
Investigations can start from credible information supplied by regulators, whistleblowers, or financial institutions. The subject bears the duty to prove lawful origins of wealth; failure to do so triggers presumptions of unlawful acquisition.
Investigative Practices Under the Proclamation
- Standard Inquiries: Audits of financial statements, land registration verification, and business license tracing.
- Special Techniques (Court-Mandated): Communication interception, active bank flow analysis, and targeted digital surveillance.
Freezing orders and both conviction-based and non-conviction-based confiscation are available, shifting the burden to the asset holder to justify legitimacy under a civil standard of proof.
Implications and Risks
- Record-keeping duty: Individuals and companies must maintain clear provenance for significant assets.
- Compliance pressure: Financial institutions need updated monitoring and reporting frameworks.
- Fair process concerns: Retroactivity and civil-standard proof requirements raise debates over property rights and potential political misuse.
- Investor sentiment: Effective, transparent enforcement will determine whether the law builds or erodes confidence.
Practical takeaway
Start an internal asset origin audit now, prioritize high-value holdings, and prepare documentation that can satisfy a civil standard of proof if challenged.
Conclusion
Proclamation No. 1364/2025 is a pivotal reform aimed at curbing illicit enrichment. Its impact will hinge on institutional capacity, judicial oversight, and the government's commitment to procedural safeguards that protect legitimate property rights while delivering decisive enforcement.