It would work like this: Like the FATCA legislation in the US, the premise is:

An individual is required to provide a detailed report of his wealth (however small).

The regulatory body chooses to regard the report as “in error,” or “incomplete.”

The law then allows all the assets to be confiscated, including those portions that were correctly reported.

Of course, we’d like to think that no reasonable government would abuse power in this way. Unfortunately, history shows that any government that issues a license to itself to rob its citizenry, invariably uses (and abuses) that license.

The beauty of such a system is that it need not be enforced often. Once people understand that, at any moment, they could lose everything and have no recourse whatsoever, they learn to keep their heads down and be compliant.

From that point on, fear of government is a constant, and the population is effectively under house arrest.