COMPARATIVE LAW STUDY OF THE IMPLEMENTATION OF MUTUAL RECOGNITION OF ORDERS TO FREEZE AND CONFISCATE CRIMINAL ASSETS IN THE EUROPEAN UNION JUST/2011/JPEN/PR/0153/A4 FINAL FINDINGS REPORT
Justice
EUROPEAN COMMISSION Directorate-General for Justice and Consumers Directorate B — Criminal justice Unit B.1 — Procedural criminal law B-1049 Brussels E-mail: JUST-CRIMINAL-JUSTICE @ec.europa.eu
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Luxembourg: Publications Office of the European Union, 2014
ISBN 978-92-79-45602-2 doi:10.2838/727210
© European Union, 2014
Submitted by Jean ALBERT, Chantal CUTAJAR, Cécile FARGIER, Frédéric LEPLAT November 2013
COMPARATIVE LAW STUDY OF THE IMPLEMENTATION OF MUTUAL RECOGNITION OF ORDERS TO FREEZE AND CONFISCATE
CRIMINAL ASSETS IN THE EUROPEAN UNION JUST/2011/JPEN/PR/0153/A4 FINAL FINDINGS REPORT
Table of contents Preliminary notes ...... 10 Acknowledgements ...... 10 Introduction ...... 13 Short Summary ...... 18 Executive Summary ...... 19 The state of play ...... 19 Mutual recognition ...... 23 Non conviction based orders and mutual recognition ...... 25 Fundamental rights ...... 27 1. CHAPTER 1: National Measures and International and European Instruments facilitating mutual recognition of freezing and confiscation orders in criminal matters . 30 1.1. The international context ...... 30 1.1.1. Mutual Assistance ...... 31 1.1.2. Mutual Recognition ...... 33 1.2. The European regulatory context ...... 34 1.2.1. The 90s ...... 34 1.2.2. The impact of the Treaties of Amsterdam and Nice ...... 34 1.2.3. The Treaty establishing a Constitution for Europe ...... 35 1.2.4. The Tampere European Council and the Hague Programme ...... 35 1.2.5. The Treaty of Lisbon ...... 35 1.2.6. Eurojust ...... 36 1.2.7. Relevant legal and policy instruments adopted ...... 36 1.3. General rules on the freezing and confiscation of criminal assets ...... 42 1.4. General rules on the freezing criminal assets ...... 43 1.5. General rules on confiscation of criminal assets ...... 47
1.5.1. Definitional aspects ...... 47 1.5.2. Type of offences concerned ...... 47 1.5.3. Person concerned ...... 48 1.5.4. Type of assets ...... 51 1.5.5. Objects of the confiscation ...... 52 1.6. Specific rules on confiscation of criminal assets ...... 52 1.6.1. Criminal non-conviction based confiscation of criminal assets ..... 54 1.6.2. In Rem non-conviction based confiscation of criminal assets ...... 58 1.6.3. Extended confiscation of criminal assets ...... 60 1.7. Recent developments on the freezing and confiscation of criminal assets ...... 65 1.7.1. Recent changes related to substantive regulations on confiscation ...... 65 1.7.2. Recent changes related to mutual recognition ...... 66 1.8. Framework Decisions ...... 67 1.9. Transposition status of Framework Decision 2003/577/JHA ...... 68 1.9.1. Transposition in the Member States and in Croatia ...... 69 1.9.2. Recent implementations of the Framework Decision 2003/577/JHA ...... 71 1.9.3. Scope of implementation ...... 73 1.9.4. Suggestions for improvements for Framework Decision 2003/577/JHA ...... 75 1.9.5. Improvements relating to translation ...... 75 1.9.6. Improvements relating to seizures for purpose of compensation of victims ...... 76 1.9.7. Improvements relating to seizures for purpose of enforcement bodies ...... 76 1.9.8. Improvements relating to enquiry powers and sharing of information ...... 77 1.9.9. Improvements relating to interim measures ...... 78 1.9.10. Closer harmonisation? ...... 78 1.10. Transposition status of Framework Decision 2006/783/JHA ...... 79 1.10.1. Transposition in the Member States ...... 80 1.10.2. Level of implementation ...... 82 1.10.3. Method of implementation in the Member States ...... 84 1.10.4. Suggestion on improvement for Framework Decision 2006/783/JHA ...... 84 1.11. Implementation of Article 54 of the 2003 United Nations Convention on Corruption ...... 86 1.12. Implementation of Article 13 of the 2000 United Nations Convention on transnational organised crime ...... 91 1.13. Implementation of Articles 5 and 7 of the 1988 United Nations Convention on drug trafficking ...... 95 1.13.1. Implementation of Articles 5 ...... 95 1.13.2. Implementation of Articles 7 ...... 96 1.14. General impact of 12, March 2012 Directive Proposal ...... 99 1.14.1. Changes relating to freezing and confiscation processes ...... 104 1.14.2. Changes relating to freezing process ...... 105
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1.14.3. Changes relating to confiscation process ...... 109 1.14.4. Third party confiscation ...... 110 1.14.5. Extended confiscation ...... 110 1.14.6. Non-Conviction based confiscation ...... 111 1.14.7. Other changes impacting the Member States ...... 113 2. CHAPTER 2: Process of freezing and confiscating criminal assets ...... 120 2.1. Procedure ...... 122 2.1.1. Decision to freeze criminal assets ...... 125 2.1.2. Decision to confiscate criminal assets ...... 155 2.2. Competent enforcement authorities ...... 173 2.2.1. Competent authorities identifying criminal assets ...... 174 2.2.2. Competent authorities enforcing orders to freeze and/or confiscate criminal assets ...... 179 2.2.3. Competent authorities managing frozen and/or confiscated criminal assets ...... 184 2.2.4. Implementation of regulations and case law ...... 187 2.3. Cooperation with supranational agencies ...... 230 2.3.1. Context ...... 231 2.3.2. Practical aspects of the cooperation between the EU Member States with these supranational authorities ...... 231 3. CHAPTER 3: Non-conviction based orders and mutual recognition of non-conviction- based confiscation orders ...... 237 3.1. Key findings ...... 237 3.1.1. Context ...... 237 3.1.2. The harmonisation of the internal legislation of the Member States is useful ...... 238 3.1.3. The proposal does not solve the difficulties of the mutual recognition of non-conviction based orders ...... 238 3.1.4. Recommendations ...... 239 3.2. National mechanisms for non-conviction based confiscation orders ...... 240 3.2.1. Criminal versus in rem non-conviction based confiscation orders 240 3.2.2. Situation in the different Member States ...... 245 3.3. Scope of the recognition of non-conviction-based confiscation orders issued by another Member State (civil/criminal) ...... 266 3.3.1. Obstacles to the enforcement of civil non-conviction-based confiscation orders issued by another Member State ...... 267 3.3.2. Situation by Member State on the enforcement of civil non- conviction-based confiscation orders issued by another Member State ...... 268 3.3.3. Obstacles to the enforcement of criminal non-conviction-based confiscation orders issued by another Member State ...... 283 3.3.4. Situation by Member State on the enforcement of criminal non- conviction-based confiscation orders issued by another Member State ...... 284 4. CHAPTER 4: Remedies and procedural safeguards ...... 298 4.1. Procedural safeguards ...... 300
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4.1.1. Procedural safeguards in national cases ...... 300 4.1.2. Third party rights ...... 392 4.2. Analysis of the issues ...... 407 4.2.1. New tools do not negate old ones ...... 407 4.2.2. Fundamental rights are guaranteed at the EU level ...... 415 4.2.3. The Draft Directive: remedies and procedural safeguards ...... 417 4.2.4. Rights protected by the Charter ...... 422 4.2.5. Procedural safeguards issues identified by the ECHR ...... 424 4.3. Concluding Remarks ...... 433 5. CHAPTER 5: Effectiveness of the present system ...... 434 5.1. Decisions to freeze and confiscate criminal assets ...... 435 5.2. Appeals against decisions to freeze and confiscate criminal assets and remedies435 5.3. Criminal orders to freeze criminal assets transmitted to other Member States . 436 5.4. Criminal orders to confiscate criminal assets transmitted to other Member States (conviction and non-conviction based) ...... 438 5.5. Criminal orders to freeze criminal assets received from other Member States .. 438 6. Conclusions ...... 442 6.1. Identification of recent changes, evolutions and proposed changes ...... 442 6.2. The 12 March 2012 Directive Proposal and mutual recognition ...... 446 6.3. The need for a Directive on freezing and confiscation ...... 447 6.3.1. The ambiguities created by the Council General Approach ...... 448 6.3.2. The legal basis for the Draft Directive ...... 449 6.3.3. The opt-in/opt-out option left to some Member States ...... 450 6.3.4. Legal Certainty ...... 450 6.4. Of the importance of statistics ...... 451 6.4.1. The lack of statistics ...... 451 6.4.2. The need for statistics and the proposed solution in the Draft Directive ...... 452 6.4.3. The type of statistics needed ...... 454 6.4.4. Recommendation to generate EU level statistics ...... 455 6.4.5. The use of new technologies ...... 456 6.5. Evaluation of the impact of diverging measures on the effectiveness of the recognition of orders to freeze and confiscate criminal assets ...... 457 6.6. Suggestions on improvement to mutual recognition and enforcement of orders to freeze and confiscate criminal assets ...... 458 6.6.1. The need for new instruments ...... 458 6.6.2. Definitions and concepts ...... 460 6.6.3. Checks and balances ...... 461 6.6.4. Forfeiture of criminal assets and unjust enrichment ...... 461 6.6.5. Other fundamental rights issues ...... 462 6.6.6. Conflict of jurisdiction and the ne bis in idem principle ...... 464 6.7. EU instruments as a basis for a new instrument on freezing and confiscation order ...... 467 6.7.1. The European Arrest Warrant ...... 467 7. PROPOSALS ...... 468 Page 8 of 477
7.1. Fundamental rights ...... 468 7.2. Facilitating mutual recognition whilst protecting fundamental rights ...... 471 7.3. Rationale for a Regulation on mutual recognition ...... 473 7.4. Options ...... 473
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Preliminary notes
The terms beginning with capital letters that are not defined in this report (the “Report”) are defined by reference to the offer and the contract as approved by the European Commission (“Offer” or “Contract”).
Some of the documents were too large to include in this Report. The Annexes to this Report which include thousands of pages of relevant information are available online through a secure website accessible by the Beneficiary1.
This Report may contain repetitions. This is a feature of such reports. Ensuring clarity and that all the work that has been performed and properly consigned often leads to repeats.
Acknowledgements
The contractor (hereafter the “Contractor”) is DBB Law (Demolin - Brulard - Barthelemy), a law firm with offices in Brussels, Mons, and Soignies, Belgium and Paris, France2.
This Report is based on contributions made in the form of specific reports from all members of the team described below (the “Team”)3.
As Team Leader, I wish to thank the members of the Team, researchers, contact points and other contributors for their dedication to this project and the quality of their input.
Members of the Team are listed below.
Report Team Jean ALBERT Yves BRULARD
1 The information contained in the Annexes to this Final Report may be retrieved from http://www.criminalassets.eu. Once on the website the Beneficiary will need to Login and then click on the menu “Documents_Commission”. This will enable access to the Report and its Annexes.
2 DBB, 46 avenue des Arts, 1000 Brussels, Tel +32 (0)2 213.14.50, Fax +32 (0)2 213.14.60, Email [email protected]
3 The contents of this Report are the sole responsibility of the Team Leader and can in no way be taken to reflect the views of the European Commission or of those who collaborated or participated in this Report since their participation, limited to specific portions of the Report, was reviewed and re-written to form the Report. The European Commission does not guarantee the accuracy of the data included in this report, nor does it accept responsibility for any use made thereof.
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Chantal CUTAJAR Cécile FARGIER Frédéric LEPLAT
Legal Experts who have done Country Reports Austria: Hans Kristoferitsch Belgium: Létitia Dumont Bulgaria: Grozdan Grozev and Ignat Papazov Croatia : Lendita Kamberi Cyprus: Yiannos Georgiades Czech Republic: Milan Chladek Denmark: Peter Gjørtler Estonia: Valters Gencs Finland: Sakari Kristian Melander France: Cécile Fargier Germany: Norbert Häger Greece: Vassiliki Panagiotidou Hungary: Batki Pal Ireland: John Sweetman and David Scahill BL Italy: Venerando Monello Latvia: Valters Gencs Lithuania: Rolandas Tilindis Luxembourg: Rosario Grasso Malta: Stefano Filletti The Netherlands: Edgar Tijhuis Poland: Arkadiusz Lach Portugal: Pedro Rascao Romania: Liviu Damsa Slovenia: Nataša Pipan Nahtigal Slovakia: Peter Bartosik Spain: Emilie Pavageau Sweden: Dominika Borg United Kingdom: Syed Mazhar Hussain Bokhari
Project management Emilie Dessens (project management) Jacqueline Duband (coordination/translation/edition) Cécile Fargier (Legal aspects and country reports) Page 11 of 477
Research, Translation and Administrative Joanna Aknin Jean-Baptiste Merlin Filip Milo Cécile Pinel Julien Saintpierre
Main Outside Contributors Interviewees from different Member States Participants in the questionnaires National Statistics Agencies Ministries and government agencies With special thanks to the ARO network and Eurojust
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Introduction
This Study concerns the “Comparative law study of the implementation of mutual recognition of orders to freeze and confiscate criminal assets in the European Union.” (the “Study”). In this Study, the expression Member States includes all the Member States of the EU plus Croatia.
The context of the Study is summarized in the Salvador Declaration of 2010: “We recognize the need to deny criminals and criminal organizations the proceeds of their crimes. We call on all Member States within their national legal systems to adopt effective mechanisms for the seizure, restraint and confiscation of proceeds of crime and to strengthen international cooperation to ensure effective and prompt asset recovery. We also call on States to preserve the value of seized and confiscated assets, including through disposal, where appropriate and possible, where there is a risk of their value diminishing.4”
Today, crime pays! This is a familiar statement. Assets of criminals remain sheltered and their value is significant at both European and international levels5. The ability for criminals to enjoy the fruits of their criminal endeavours has the following three immediate consequences. First: crime does pay. Second criminal activities will perpetuate as criminals are able to invest into the future by having the means to corrupt others and inspire those who will be keen to emulate their well rewarded achievements. Third, as criminals seek to launder the fruits of their activities and reinvest into the regular economy, they will create market distortions, for they are unfair competitors not having borne the initial costs of doing business. In order to fight efficiently against crime, to deter from criminal activities, one must ensure that crime does not pay.
To fight crime, the EU has put in place instruments that allow for the freezing and confiscation of criminal assets and invite Member States to work together to ensure that
4 Salvador Declaration on Comprehensive Strategies for Global Challenges: Crime Prevention and Criminal Justice Systems and Their Development in a Changing World; Twelfth United Nations Congress on Crime Prevention and Criminal Justice, Salvador, Brazil, 12-19 April 2010; A/CONF.213/L.6/Rev.2; Available at http://www.unodc.org/documents/crime-congress/12th-Crime- Congress/Documents/Salvador_Declaration/Salvador_Declaration_E.pdf
5 Estimating Illicit Financial Flows Resulting from Drug Trafficking and other Transnational Organized Crimes, Research Report, October 2011, Nations Office on Drugs and Crime; Available at http://www.unodc.org/documents/data-and-analysis/Studies/Illicit_financial_flows_2011_web.pdf
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the assets transferred or located in another Member State are not sheltered from freezing or confiscation.
These instruments stem from the Conclusions of Tampere European Council of 15 and 16 October 1999: “[e]nhanced mutual recognition of judicial decisions and judgements and the necessary approximation of legislation would facilitate co-operation between authorities and the judicial protection of individual rights. The European Council therefore endorses the principle of mutual recognition which, in its view, should become the cornerstone of judicial co-operation in both civil and criminal matters within the Union. The principle should apply both to judgments and to other decisions of judicial authorities.6” They imply thus both an approximation of legislation and mutual recognition.
As of 2013, in addition to international agreements and conventions, at the EU level, two types of instruments were adopted and are currently in force. The first focuses on substantial rules on confiscation of criminal assets. The Council Framework Decision 2001/500/JHA of 26 June 2001 on “money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime”7 and the Council Framework Decision 2005/212/JHA of 24 February 2005 on “confiscation of crime-related proceeds, instrumentalities and property”8 epitomize this first type of instruments9. The second focuses on procedures for the mutual recognition of decisions from one Member State in another Member State on the freezing and confiscating of criminal assets and translates into EU law as Council Framework Decision 2003/577/JHA of 22 July 2003 on “the execution in the European Union of orders freezing property or evidence”10 and
6 http://www.europarl.europa.eu/summits/tam_en.htm
7 Official Journal L 182, 05/07/2001 P. 0001 – 0002; Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001F0500:EN:HTML
8 OJ L 68, 15.3.2005, p. 49–51; Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:068:0049:0051:EN:PDF
9 Mention should also be made of the Join Action 98/699/JHA of 3 December 1998 adopted by the Council on the basis of Article K.3 of the Treaty on European Union, on “money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds from crime”; OJ L 333, 9.12.1998, p. 1; Available in its consolidated version at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1998F0699:20010705:EN:PDF
10 OJ L 196, 2.8.2003, p. 45.
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Council Framework Decision 2006/783/JHA of 6 October 2006 on “the application of the principle of mutual recognition to confiscation orders”11.
Following the observation that existing instruments were ineffective12 and the amounts of criminal assets recovered unsatisfactory13, the European Commission adopted on March 12, 2012 a proposal for a Directive14 to harmonize substantial rules on the confiscation of criminal assets in the EU, including value-based confiscation, extended confiscation, third party confiscation and the possibility for confiscation orders being issued without a criminal conviction in specific cases. The proposed Directive would replace Joint Action 98/699/JHA and, partly, Framework Decisions 2001/500/JHA and 2005/212/JHA. The action of the European Commission follows a finding of ineffectiveness of current EU instruments, European tools aimed at the organized crime “wallet”15. The harmonization embedded in the proposed Directive aims at creating a coherent body of substantial rules which should in turn facilitate mutual trust and effective cross-border cooperation, making it easier for freezing and confiscation orders issued in one Member State to be enforced against criminal assets located in another Member State.
11 OJ L 328, 24.11.2006, p. 59.
12 See in particular the European Commission’s implementation reports on Framework Decisions 2005/212/JHA on extended confiscation and 2003/577/JHA on the mutual recognition of freezing orders under COM(2007) 805 and COM(2008) 885; Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0805:FIN:EN:PDF http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0885:FIN:EN:PDF
13 Commission Staff Working Paper, document 7641/12 ADD1, paragraph 4.1.; Available at: http://www.parlament.gv.at/PAKT/EU/XXIV/EU/07/57/EU_75735/imfname_10022180.pdf
14 COM(2012) 085 ; Available at : http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0085:FIN:EN:PDF
15 See report from the Commission based on Article 14 of Council Framework Decision 2003/577/JHA of
22 July 2003 on the execution in the European Union of orders freezing property or evidence,
COM(2008) 885 final of 22 December 2008; Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0085:FIN:EN:PDF
See also report from the Commission pursuant to Article 22 of Council Framework Decision 2006/783/JHA of 6 October 2006 on the application of the principle of mutual recognition to confiscation orders,
COM(2010) 428 final of 23 August 2010, page 13; Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0428:FIN:EN:PDF
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The Commission Impact Assessment which accompanied the proposed Directive16 identified that the preferred policy option that the Commission should pursue is the harmonization of substantial rules coupled with an additional instrument on mutual recognition, in order to achieve maximum effectiveness. In a 1999 discussion paper on mutual recognition of judicial decisions and judgments in criminal matters, the UK Delegation to the K.4 Committee had highlighted the risk that the harmonization of substantial rules alone might prove insufficient. In particular it noted that: “[…] however, experience has shown that approximation is time consuming and sometimes difficult to negotiate. Full harmonisation of all criminal offences is not a realistic prospect; moreover, differences in criminal procedures will continue to impede judicial cooperation. Member States will continue to have different systems of criminal law for the foreseeable future. Even if laws were fully aligned, lack of mutual recognition would still imply the need to check facts and satisfy legal conditions before co-operation could be provided. In order to remove unnecessary procedural hurdles and formalities, work on approximation must be accompanied by progress towards mutual recognition. Mutual recognition can sometimes provide a shorter route to improving cooperation, without fully aligning legislation”17.
Indeed, during the negotiations on the draft Directive, the Council called the Commission to present a further proposal on mutual recognition which would amend Framework Decisions 2003/577/JHA and 2006/783/JHA.
This Study does not take into account the final compromise text of the proposed Directive that was agreed upon between the negotiating parties from the European Parliament, the Council and the European Commission on November 27, 201318.
16 SWD(2012) 31 final, available at http://ec.europa.eu/dgs/home-affairs/e- library/documents/policies/organized-crime-and-human-trafficking/confiscation-and-asset- recovery/index_en.htm
17 See “Mutual Recognition of judicial decisions and judgments in criminal matters”, Note from the
UK Delegation to the (then) K.4 Committee, Council doc. 7090/99, Brussels, Crimorg 35 Justpen 18, Limite, Brussels, 29 March 1999, especially par. 9 ; See reference at: http://www.publications.parliament.uk/pa/ld199899/ldselect/ldeucom/62/6203.htm http://www.publications.parliament.uk/pa/ld199899/ldselect/ldeucom/62/6204.htm
18 http://register.consilium.europa.eu/pdf/en/13/st16/st16861.en13.pdf
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The present Study focuses on whether a further instrument might be necessary, as already acknowledged by the Commission Impact Assessment. It seeks to improve the recognition and enforcement of freezing and confiscation of criminal assets in the European Union through a detailed comparative law analysis of national legislation in this area accompanied, where appropriate, with concrete proposals.
Reminder of the objectives of the Study
The Beneficiary identified the objectives of the Study as follow:
“improving the recognition and enforcement of freezing and confiscation orders concerning criminal assets in the European Union, based on a detailed comparative law analysis of national laws in this domain and accompanied, where appropriate, by specific proposals.”
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Short Summary
Crime knows no borders. Criminals do. They use them efficiently to enjoy the fruits of their activities to the fullest.
For the past fifty years, the international community has called on countries to adopt more efficient tools to help fight organized crime and criminal activities with an international dimension.
The European Union has answered the call with the adoption of a number of instruments. However, the adoption of many instruments to cover a variety of fields has led to inefficiencies.
In particular, mutual recognition relies on a complex variety of disparate instruments. Their transposition or implementation throughout the EU is difficult to assess given the number of EU and national regulations that come into play. Legal professionals insufficiently trained or informed find it difficult to follow the ever increasing number of regulations and related regulatory complexities. This highlights a chaotic process.
This is the result of a policy of small steps. It is a strategic error. In fact, the resulting complexity requires an investment from legal professionals that is disproportionate to the efficacy of the instruments. The result is that the instruments are at best partly used.
In this context, the adoption of one or two regulations could be envisaged. Such an instrument would aim at integrating a number of instruments to give coherence to the whole and enhance effectiveness. It would also focus more on the process of execution of decisions across borders and pay specific attention to the protection of fundamental rights. Indeed, the enhancement of the effectiveness of mutual recognition in criminal matters should not result in a deterioration of the protection of fundamental rights. As in the proposed Directive on the freezing and confiscation of the proceeds of crime, in this Study the concrete proposals made for a new regulatory framework have as their primary objective the balance between fighting crime and protecting the innocent.
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Executive Summary
The state of play Crime knows no borders. Criminals do. They use them efficiently to enjoy the fruits of their activities to the fullest.
For the past fifty years, the international community has called on countries to adopt more efficient tools to help fight organized crime and criminal activities with an international dimension. Thirty years ago the call has included directions on the tools themselves. The need to adopt measures aimed at criminals’ assets, including the instruments of the crime and the proceeds of crime, was identified. The importance of cooperation in the enforcement of these measures highlighted. Countries were urged not only to adopt freezing, confiscation and forfeiture regulations but also facilitate their cross-border enforcement. The difficult fight, at the international level, against drug traffickers fostered new solutions. These solutions had been successfully tested in the United States following the adoption of the Racketeer Influenced and Corrupt Organisations Statute (“RICO”) of 197019. The 1988 Drug Convention epitomizes this evolution20. The Council of Europe echoed this through the 1990 Money Laundering Convention21.
All Member States today have in their legislations general provisions on the freezing and confiscation of criminal assets, including the proceeds of crime. There is a consensus that these tools are necessary to fight crime and its social and economic consequences. Pursuant to international, EU and bilateral-instruments, Member States regularly provide assistance to each other in criminal matters. There are genuine and continuous efforts to develop further cooperation in facilitating the enforcement of decisions to freeze and confiscate criminal assets and proceeds of crime. There is a general will to recognize, as automatically enforceable in one Member State, freezing and confiscation orders issued in another Member State. This will, apart from being codified in Framework Decisions 2003/577/JHA and 2006/783/JHA, also translates the view of those working in the field.
19 18 USC 1961-1968. This was by no means the first regulation that included such tools. For example, Anti- mafia legislation has existed in Italy since 1956 and includes the right to confiscate property of persons who present a danger to society. The Belgian Drug Offences Act of 1921 permits confiscation of the proceeds of drug related offences.
20 Vienna, 20 December 1988.
21 Strasbourg, 8 November 1990.
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This raises the question then as to why the Framework Decisions are, as confirmed in this Study, seldom used?
One of the main reasons for this is that, beyond the basic regulations on freezing and confiscation of criminal assets, specific regulations have emerged over the last ten years to address specific situations that were not previously covered and that highlighted loopholes benefiting criminals. Below are the types of situation that have warranted specific regulations allowing for non- conviction based confiscation measures. The first such situation is when the offender is unknown. The second situation is where the death or flight of the suspect prevents a conviction. The third one relates to where the statute of limitation would prevent a conviction. The fourth pertains to the situation in which the alleged unlawfully gained assets are not in the possession of the offender. The last one is where the alleged unlawfully gained assets were used to generate more assets.
Many “tailor-made” regulations were thus recently adopted by Member States. These considerably expand the scope of confiscations and their consequences. The nature of confiscation is multifaceted and the concept is used in various ways. In countries with a tradition of violent crime, it has been used as a precautionary measure. In other countries it accompanies a sentence and is considered as a penalty, which translates into the final deprivation of property. In some cases, confiscations relate to minor offences, and can be only tenuously related to an offence or can follow a sentencing to imprisonment. In others, they follow in rem proceedings and eliminate the need for a conviction applying even if no criminal charges are pressed, or after criminal charges are dropped or in case of an acquittal. In this vein, the focus of the concept of confiscation has generally shifted from the “offender” to the “assets” and given rise to extended, third party and non- conviction based confiscations which have themselves taken a variety of forms. Confiscation is applied in civil, administrative and criminal contexts.
There are reservations in some countries that such specific measures may go too far and pose a risk to individual freedoms and fundamental rights. It is unclear to many which rights apply to a concept that is used in so many different legal contexts and situations.
There is a belief that, from serious crimes including terrorism, human and drug trafficking, the list of potential crimes coming under international cooperation would eventually over- extend and include offences that are not punishable in all Member States with harsh
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penalties or that are lesser offences that do not require such drastic measures22. In the EU confiscation should be enabled for all offences punishable with imprisonment for a specified time. There cannot be international cooperation on confiscation related to criminal activities that are not criminal offences in both Member States.
Moreover, there is a fear that innocents may be caught up in these measures and that remedies are either not available or accessible or even that people’s lives might have been affected before they are able to obtain reparation. Finally, there is a wariness of EU regulations the effect of which may undermine national legal culture, basic State sovereignty and constitutionally entrenched individual and property rights.
In the background to these tougher stances and reservations lies a conflict between two priorities. On the one hand there are minimum EU fundamental rights and the right of countries to go further and grant more individual rights than provided for under EU and international agreements. On the one hand there are minimum EU/International standards to fight crime efficiently and the right of countries to go beyond these. The latter inevitably leading to the side-lining of some individual freedoms.
Confiscation and forfeiture measures can have a significant impact on people’s ability to exist economically and even defend themselves before the courts. Regulations must strike the right balance between the public interest in fighting crime and the public’s fundamental rights.
This balance is difficult to strike. New tougher UK regulations came in force in 2003. The UK Courts have, over the past five years, made significant contributions to how that balance can be struck. In other Member States the laws are even more recent, some as recent as 2012, and the Courts have not had the ability to clarify how some of these measures should apply in light of individual and fundamental rights.
Along with the ongoing process of adopting new more expansive regulations on the freezing and confiscation of criminal assets at national level, some of which have been challenged in national courts and in some cases the European Court of Human Rights, the European Union has proposed further minimum harmonization at EU level. The rationale is that
22 Even if the prison term of three years is used as a measure of seriousness, the differences between countries in the level of punishment for offences is such that what may be a serious crime in one country is not a serious crime in another.
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these new national regulations, even if tougher, are all different and thus provide for additional reasons for not using tools such as the Framework Decisions 2003/577/JHA and 2006/783/JHA. Without minimal harmonization, there will be no increased efficiency in mutual recognition of freezing and confiscation orders, it is argued. This Study shows that most Member States’ authorities that deal with mutual recognition would agree with this.
The Draft Directive of 12 March 2012, aims at providing minimum standards in regulations on freezing and confiscation of assets. In December of 2012, the Council reached its negotiating position, the general approach, on this proposal. On 20 May 2013, the European Parliamentary Committee on Civil Liberties, Justice and Home Affairs adopted an amended text23.
By providing at minimum that Member States adopt regulations on extended confiscation, third party confiscation and non-conviction based confiscation in criminal matters, the EU affirms that these tools are needed at the minimum to efficiently fight crime. Although some Member States do have such tools in one form or another, not all have them. The harmonisation will mean that in these areas, at least, all Member States will have the same basic tools and mutual recognition should be enhanced as a consequence. Member States who previously would not consider enforcing criminal non conviction based orders or third party and extended orders because they did not exist in their own legal system should after having transposed these measures be more amenable to enforcement. This Study shows that in many Member States, laws will have to be adapted.
The Draft Directive constitutes a major achievement in the effort to fight organised crime. It should have a positive effect on the ability of Member States to limit the activities of criminals in the EU by ensuring that wherever criminals move within the EU their assets will not be safe. However, the Draft Directive was not meant to, and does not, address mutual recognition concerns. Therefore, as a result of the Draft Directive, all Member States will harbour extended, third party and non-conviction based confiscation mechanisms which eliminate major obstacles to mutual recognition in particular because of the knowledge and understanding that the stakeholders in each Member States will have of such mechanisms. Despite this, the Draft Directive only establishes minimum rules. Therefore, after it is adopted or transposed, an executing Member State might still check that the issuing
23 See at http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A7-2013- 178&language=EN#title1
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Member State’s regulations are similar in their scope to its own and that procedural rights and fundamental rights are adequately protected, including its public order rules. This implies a review of the process that may hinder the mutual recognition process.
Mutual recognition Mutual recognition requires trust. Trust is not just about laws and regulations but also and more importantly about enforcement. Mutual recognition implies that there is the same respect for the rule of law and due process in each Member State. It also implies that this respect is constant and does not depend on political agendas. It is difficult to imagine a fully functioning system of mutual recognition in the EU given the important differences that continue to exist between Member States in the enforcement of the above stated principles. It is even contradictory to push for mutual recognition in the enforcement of criminal law judicial decisions on the one hand and at the same time make the alarming observation that in Hungary for example, the independence of judges in criminal trials is questionable24.
As most clearly stated by the European Parliament Committee on Civil Liberties, Justice and Home Affairs in its 2012 Working Documents 1 on the situation of Fundamental Rights: standards and practices in Hungary: “Any doubts in the independence and impartiality of judges based on systematical flaws in the Constitution and national laws could have a significant impact on the on-going cooperation in the common area on freedom, security and justice based on the principle of mutual recognition as enshrined in Articles 81 TFEU (civil matters) and 82 TFEU (criminal matters). In that regard it is necessary to point out the EU prerogatives in the field of criminal law, where several far reaching instruments are already in place based on mutual recognition, meaning more or less automatic recognition of judicial decisions from other Member States, reaching from transfer of suspects and convicted persons (European Arrest Warrant), over probationary measures to evidence gathering (European Evidence Warrant and the proposed European Investigation Order).
24 See the European Parliament Committee on Civil Liberties, Justice and Home Affairs in its 2012 Working Documents 1 on the situation of Fundamental Rights: standards and practices in Hungary. 5 September 2012. Available at http://www.europarl.europa.eu/meetdocs/2009_2014/documents/libe/dt/911/911918/911918en.pdf See also http://europa.eu/rapid/press-release_IP-12-24_en.htm
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Therefore, any problems with the appearance of the independence and impartiality of judges would endanger the whole existing structure based on mutual trust.25”
That said safeguards exist in Europe against abuses of rights. Both the European Parliament and the European Commission have reacted promptly to indications that Hungary may be heading towards an important risk with respect to the protection of fundamental rights. The European Court of Human Rights has received many applications and will review them. The European Court of Justice can be called upon to interpret the Charter of Fundamental Rights. However, it remains that Member States should be especially attentive to the effect that their legislation has on an embryonic system of mutual recognition.
The risks of miscarriages of justice are increased in areas such as the freezing and confiscation of criminal assets. In these areas decisions are sometimes taken: ex parte, by non-judicial authorities and parties to the procedure (police/prosecutor), although these are only temporary decisions, in non-criminal procedures where the right to legal aid is limited26 and the burden of proof can sometimes be reversed. And often such decisions are not considered sanctions, penalties or condemnations.
Even countries such as the UK have been reminded of the risks very recently27.
Depriving citizens of their assets can result in depriving them of access to legal representation. It is thus essential that the rules governing due process and their enforcement follow, in practice, similar standards in all Member States.
25 See the European Parliament Committee on Civil Liberties, Justice and Home Affairs in its 2012 Working Documents 1 on the situation of Fundamental Rights: standards and practices in Hungary. 5 September 2012. Available at http://www.europarl.europa.eu/meetdocs/2009_2014/documents/libe/dt/911/911918/911918en.pdf
26 See in Payton, R v [2006] EWCA Crim 1226 (26 May 2006) where the judge makes the following unequivocal statement:
27 Harrison, R (on the application of) v Birmingham Magistrate's Court & Anor [2011] EWCA Civ 332. Available at http://www.bailii.org/ew/cases/EWCA/Civ/2011/332.html
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Non conviction based orders and mutual recognition Mutual recognition faces a major hurdle in the field of non-conviction based confiscation orders. The reasons for this are three-fold. First, in some countries the law if not the constitution is attached to the idea that deprivation of property should be both exceptional and as a consequence of a conviction. Second, there is a heightened risk that with non-conviction based confiscation the intervention of an independent and impartial party to the proceedings may be absent and lead to decisions to confiscate assets made by those, prosecutors or an agency representing the government, who are a party to the proceedings. Third, there are a number of variations in non-conviction based confiscation systems that are a cause for concern in some countries in particular where the burden of proof is reversed.
One can distinguish two very different main types of non-conviction based confiscation systems28, which are commonly referred to as “NCB”. The first one is civil non-conviction confiscation based on in rem jurisdiction. This system originated in common law countries. This is a source of confusion because of the parallel existence of a second system that exists in criminal proceedings. This second system, a more recent creation in this “appellation”, is the criminal non-conviction based system or in personam confiscation. Some criminal non-conviction based confiscations are “precautionary measures” that are taken during criminal proceedings. These may be confirmed at a later stage by a conviction. Other criminal non-conviction based confiscations are stand-alone and are taken as a consequence of the impossibility to secure a conviction not for lack of evidence of the criminal origin of the assets but because the suspected criminal has vanished, is unavailable for trial or for other reasons unrelated to the nature of the confiscated assets. Definitional distinctions between different types of confiscations should be drawn so that one can clearly understand the setting and its consequences. . Different rights apply to different types of confiscations.
The confusion would probably be lessened if one referred to non-criminal based confiscations by opposition to criminal ones. Non-criminal based confiscations are always based on a court decision whether it be civil or administrative (for those countries that have a specific administrative jurisdictional structure). These focus on the assets and thus the notion of third party is irrelevant. Criminal based confiscations can be conviction based or non-conviction based. Criminal non-conviction based confiscations are more limited in scope. They cannot be extended
28 See Europjust Report on non-conviction-based confiscation, General Case 751/NMSK – 2012, 2 April 2013.
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confiscations or include third party assets. In criminal settings, extended confiscations and confiscation of third party assets require that a conviction was handed down to which these attach.
Within these two main systems other variations can occur especially in the case of in rem confiscation where the system branches out to, on the one hand, a system of traditional civil forfeiture and on the other confiscation based on unexplained wealth29.
All Member States harbour some form of non-criminal based confiscation. .
In fact the area is particularly complex because regulations are taken to tackle specific situations that authorities come across as they implement general policies to fight organized crime. One could say that there are as many regulations as specific situations identified over time. The reason for this approach in which the legislator reacts to specific situations with precise regulations are multi-fold. First, the recognition of confiscation as a means to deter criminals is relatively recent and the initial regulations only aimed at drug traffickers and terrorists. Second, governments are reluctant to use confiscation as a general tool because of the risks to individual and fundamental rights especially in those countries that have historically suffered from totalitarian regimes where confiscation was the norm. As a result confiscation regulations that were adopted were exceptional and their scope narrow.
However, there is a trend toward more encompassing confiscation laws. The list of offences that can lead to confiscation expands constantly as a result of both the inclusion of many situations including money-laundering in its broadest defined form and the increase in the “seriousness” of offences. Today, almost any offence can be captured by money-laundering regulations. This means that the scope of the regulations has broadened over time but the balance with the protection of fundamental rights more difficult to find.
Even if there is a trend toward creating more effective tools to fight organized crime, important variations exist between Member States. These variations stem for legal culture, societal values, differences in focus - with some countries using their resources in fighting violent crime whilst others prioritizing financial crimes - and history. Based on these, similar situations will generate different regulatory responses. Where in some countries the response will be to circumvent the limitations of in personam jurisdiction by
29 See Europjust Report on non-conviction-based confiscation, General Case 751/NMSK – 2012, 2 April 2013, page 11.
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enabling the government to “prosecute” assets directly and let whoever has a claim over them argue their rights, in others, where prosecuting assets is unthinkable, the response will be to attach assets - whatever they may be – to the offence even if they are not the proceeds of crime.
However, in a mutual recognition setting even if these varying tools aim at the same result, they may be looked upon with suspicion as they may, at least in appearance, offer different degrees of protection of fundamental rights.
As a result, the time may indeed be appropriate both for a harmonization of substantive rules and the affirmation of fundamental rights. The process of harmonization determines the agreeable frame-work that can be reached and can offer a just balance for the protection of fundamental rights. This is what the latest Draft Directive offers. However, because of its limited scope due to the legal basis allowed under the Lisbon Treaty, it may only enhance mutual recognition in respect to its subject matter if and only if the fundamental rights that it refers to as perceived as sufficient guarantees of protection. In the abstract they should be but any text that merely repeats general principles related to fundamental rights to which all Member States are already supposed to abide by may fall short of reassuring enforcers in general and judges in particular. Irrespective of this, since the latest Draft Directive limits its scope to criminal matters, the question of non-criminal based confiscation orders is moot from a mutual recognition perspective.
Fundamental rights A number of fundamental rights as expressed in the Charter and the Convention for the Protection of Human Rights and Fundamental Freedoms (“Convention”) relevant in the case of freezing and confiscating criminal assets.
Based on the interviews and research conducted under this Study, freezing and confiscation orders mainly affect rights such as the presumption of innocence, the right of defence, legality and proportionality of criminal offences and penalties, property rights, privacy rights, and access to justice, including the right to an effective and a fair trial.
These rights are protected under Articles 7, 8, 17 and 47 to 50 of the Charter. They are also protected under Article 1 of Protocol No.1 and Articles 2, 3 and 4 of Protocol No. 7 to the Convention, and Articles 6, 8, and 13 of the Convention.
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Although the above stated fundamental rights are relevant in the context of freezing and confiscation orders, they may, in some cases, be inapplicable depending on the context in which freezing and confiscation orders are made.
Thus, to ensure that mutual trust exists and ensure smooth implementation of confiscation regulations pursuant to European policy or Directives, it might be important to recall that Member States should apply the principles recognized in the Charter in any type of proceedings the effect of which are identical or similar to those of criminal proceedings or where the State or State agencies are prosecuting.
This Study confirms that mutual recognition of freezing and confiscation orders is considered essential in fighting organized crime efficiently and that a balance in line with the fundamental rights principles can be struck as developed by the ECHR and the ECJ. This Study also shows that to a certain extent in many Member States such a balance has not yet been struck and that the process takes time as the courts refine their reasoning and provide as case law develops certainty on outcomes.
One also notes that there are currently serious deficiencies in the access to legal aid in disputes involving more than one Member States30 and that any regulation on mutual recognition must ensure that the right to legal aid in all the Member States is accessible by non-residents or that the right to legal aid in the Requesting Country is extended to wherever that Requesting Country seeks to enforce the confiscation order.
The material conditions of mutual recognition require that conflicts of jurisdictions are resolved in the respect of fundamental rights. Fundamental rights constraints apply in a number of different ways in the case of the freezing and confiscation of criminals assets.
As stated before extended confiscation, non-conviction confiscation and third party confiscation may concern assets that are only remotely connected to the offence. Member States may wish to make the respect for fundamental rights in the process of issuing the order a condition to enforcement and thus mutual recognition. Such a position would impede the basic assumption that mutual recognition is based on trust and in particular that the Member States are most certain that “all European citizens have access to a satisfactory judicial system of the highest quality”31. This assumption is confirmed by the
30 Report on Legal Aid.
31 The Hague Program, “Reinforcing freedom, security and justice in the European Union
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ECHR’s own perception as affirmed in Bosphorus Hava Yollari Turizm ve Ticaret Anonim Sirketi v. Ireland32.
It is important to avoid this risk that might hinder the effectiveness of mutual recognition when the only fundamental rights that should be an object of attention from the Receiving State’s perspective are those that apply in the process of the execution of the Issuing State’s order in the Receiving State.
In the safeguards provided under Article 8 of the Draft Directive, Member States are responsible for the protection of fundamental rights. To add to the existing protections and re-assure reluctant Member States a mechanism of automatic referral to the ECJ on issues of fundamental rights may be put in place.
Further, actions by the European Commission against Member States for failure to fulfil their obligations will always be possible against Member State thus ensuring a uniform interpretation of the text. In this vein and to avoid unnecessary recourse to such actions, provisions involving the transmission of Member States of implementing regulations based on a pre-prepared matrix and a follow-up by the European Commission on the implementation of EU regulations are essential.
32 Bosphorus Hava Yollari Turizm ve Ticaret Anonim Sirketi v. Ireland, 45036/98, 30 June 2005.
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1. CHAPTER 1: National Measures and International and European Instruments facilitating mutual recognition of freezing and confiscation orders in criminal matters
In a 1989 case, the Supreme Court of Canada, taking into consideration changes what had occurred in contemporary societies (i.e. ease of travel and the use of new technologies), stated: “The investigation, prosecution and suppression of crime for the protection of the citizen and the maintenance of peace and public order is an important goal of all organized societies. The pursuit of that goal cannot realistically be confined within national boundaries. That has long been the case, but it is increasingly evident today”33.
Mutual recognition of decisions in criminal matters is the most recent development aimed at answering the call of the Supreme Court for “realistic” solutions.
Mutual recognition much farther than mutual assistance, the more traditional form of cooperation.
1.1. The international context Mutual assistance in criminal matters started with extradition and can be traced back to Ancient Egypt34. Since then it evolved in numerous bi-lateral and then regional agreements35. Topic based multilateral agreements were also adopted, more recently, to fight specific criminal activities36.
It is only at a later stage that mutual assistance for the gathering of evidence and then for facilitating the recognition of decisions emerged.
33 United States of America v. Controni (1989) 48 C.C.C. (3d) 193 at 215.
34 See Bassiouni C., International Extradition: United States Law & Practice, 5th Edition, Oceania, 2007.
35 See the Inter-American Convention on Mutual Assistance in Criminal Matters, the Arab League Convention on Mutual Assistance in Criminal Matters, the Economic Community of West African States Convention in Mutual Assistance in Criminal Matters.
36 The United Nationals Conventions against Transnational Organized Crime and the Protocols thereto, the Universal anti-terrorism Conventions and Protocols, The OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions.
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In 1990, the United Nations Office on Drugs and Crime even drafted a “Model Treaty on Mutual Assistance in Criminal Matters”37 in a drive to promote the multiplication of these instruments.
As agreements have proliferated and their scope broadened, some countries have prepared guidelines on matters of international assistance38 to clarify the processes.
Mutual assistance in criminal matters has only evolved into mutual recognition at the “international level” within the framework of the EU, although its existence in Europe predates the EU. In fact much of the modern concept of mutual recognition can be found in the Convention for Rhine Navigation of 17 October 1868 as amended. In its Article 40 the Convention states: “Judgements by the Rhine navigation tribunals in each of the riparian States shall be enforceable in all the other States with due observance of the procedure prescribed by the laws of the land in which they were enforced”39. Of interest to this Study the Convention for Rhine Navigation creates a system of specialized tribunals “on or in proximity to the Rhine”. These are competent to hear both criminal and civil matters related to Rhine navigation issues. Articles 35 to 39 are all dedicated to procedures ensuring that the same procedural rights are afforded the parties before all tribunals. The Convention for Rhine Navigation thus goes a little further than EU Mutual Recognition and could be used as guidance in the questions that abound on procedural rights pertaining to freezing and confiscation orders.
1.1.1. Mutual Assistance International mutual assistance in criminal matters involves the steps that a country will implement (“Receiving Country”) in assisting another country that has made a demand for assistance (“Requesting Country”) in order to facilitate investigations relating to criminal acts and the prosecution and the punishment of criminals for such acts.
37 United Nations Model Treaty on Mutual Assistance in Criminal Matters, Adopted by the General Assembly resolution 45/117 ; subsequently amended by General Assembly resolution 53/112. Available at: http://www.unodc.org/pdf/model_treaty_mutual_assistance_criminal_matters.pdf
38 See the International Mutual Assistance in Criminal Matters Guidelines published by the Swiss Federal Department of Justice and Police, 9th Edition 2009. Available at: http://www.rhf.admin.ch/etc/medialib/data/rhf.Par.0093.File.tmp/wegl-str-e-2009.pdf
39 Revised Convention for Rhine Navigation of 17 October 1868. Available at: http://www.ccr- zkr.org/files/conventions/convrev_e.pdf
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One of the most important international agreements on the matter is the European Convention on Mutual Assistance in Criminal Matters (“CMACM”)40. The CMACM entered into force in 1962. Articles 5 and 6 of the CMACM respectively pertain to assistance in the freezing of assets and in confiscation of assets.
The next major milestone is to be found in the 1988 Drug Convention41. This focuses for the first time on the “proceeds” of crime, enables mutual assistance42, and outlines the basic principle of recognition of confiscation orders43. It states: “Following a request made pursuant to this article by another Party having jurisdiction over an offence established in accordance with article 3, paragraph 1, the Party in whose territory proceeds, property, instrumentalities or any other things referred to in paragraph 1 of this article are situated shall: i) Submit the request to its competent authorities for the purpose of obtaining an order of confiscation and, if such order is granted, give effect to it; or ii) Submit to its competent authorities, with a view to giving effect to it to the extent requested, an order of confiscation issued by the requesting Party in accordance with paragraph 1 of this article, in so far as it relates to proceeds, property, instrumentalities or any other things referred to in paragraph 1 situated in the territory of the requested Party.” Although this Convention provides for mutual assistance it also creates a “soft” mutual recognition. The Receiving Party may enforce the decision. It chooses between two options, only one of which is effective mutual recognition. The existence of the option creates an unbinding form of mutual recognition which can be referred to as “soft”.
This “soft” mutual recognition can also be found under Article 13 of the 1990 Council of Europe Money Laundering Convention44.
Mutual assistance bilateral and multilateral agreements have proven useful tools to enhance legal assistance and cooperation between agencies. As shown in this Study
40 Council of Europe, European Convention on Mutual Assistance in Criminal Matters, Strasbourg, 20 April 1959. Available at: http://conventions.coe.int/Treaty/en/Treaties/Html/030.htm
41 United Nationals Convention Against Illicit Traffic in Narcotic and Drugs and Psychotropic Substances, 1988.
42 Article 7.
43 Article 5(4) a.
44 Council of Europe, Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, Strasbourg, 8 November 1990.
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mutual assistance agreements are still sometimes a preferred avenue by some authorities as their scope is broader than that of the Framework Decisions.
One notes however important shortcomings with mutual assistance or soft mutual recognition agreements. First, they do not impose recognition of orders and are of limited usefulness in the area of confiscation and freezing orders. Second, they imply delays which are the first cause of failure for freezing and confiscation orders. Freezing even more than confiscation orders require two elements for their operational success: speed and secrecy. Both of these are hampered by multiple review processes and the intervention of many agents.
1.1.2. Mutual Recognition International mutual recognition in criminal matters involves the enforcement in a country (“Receiving Country”) of a decision made in another country (“Requesting Country”) in order to effectively fight international criminal activities.
If an ex equatur process is necessary to enforce the foreign decision or a new trial or general review process is required it can be said that there is no mutual recognition. There are degrees of mutual recognition; Automatic enforcement of a foreign final decision as if it were a local final decision being the highest degree of mutual recognition45. The review of all procedures and guarantees leading to the decision or the right of refusal based on a string of grounds, including ensuring that same facts would have led to a similar decision in the Receiving Country, constitutes a lower degree of mutual recognition and reminds of ex equatur.
As stated previously by reference to the Rhine Navigation Convention international mutual recognition in criminal matters has existed from many years for specific subject matters, including in the area of extradition pursuant to the 1957 Extradition Convention46 and under Article 95 of the Schengen Convention47. One notes that the 1957 Extradition Convention also provides under its Article 20 for a “soft” mutual recognition of requests to
45 In the spirit of Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims, Official Journal L 143 , 30/04/2004 P. 0015 - 0039. See also : Arnaud Nuyts, « La communautarisation de la Convention de Bruxelles. Le règlement 44/2001 sur la compétence judiciaire et l'effet des décisions en matière civile et commerciale », Journal des Tribunaux, 2001, p. 913-922.
46 Available at: http://conventions.coe.int/treaty/fr/Treaties/Html/024.htm
47 Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:42000A0922(02):en:HTML
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freeze and confiscate assets in the “possession of the person” or “discovered subsequently”.
Two major international agreements include mutual recognition of freezing and confiscation orders, albeit through a “soft” obligation. These are the 1988 UN Drug Convention and the 1990 European Convention on Laundering, Search, Seizure, and Confiscation of the Proceeds from Crime.
1.2. The European regulatory context In the EU context mutual recognition is a relatively new concept in criminal matters. In other areas, its existence is far from novel.
1.2.1. The 90s Council of Europe started adopting acts judicial cooperation in criminal matters as in the 90’s. The Treaty of Maastricht included judicial cooperation in criminal matters for the first time. As a result number of agreements were integrated.
1995 Council Act48 on a simplified extradition procedure based on the European Convention of 13 December 1957; 1996 agreement on extradition between Member States of the Union49, supplementing the conventions of 1957 on extradition and 1977 on the suppression of terrorism by widening the scope of extradition proceedings; special instruments adopted in the area of fraud and corruption in the EU took the form of a 1995 convention on protecting the Communities’ financial interests and a 1997 convention on combating corruption involving civil servants of the European Communities or the EU Member States.
1.2.2. The impact of the Treaties of Amsterdam and Nice The fight against organized crime became one of the focuses of attention under the Treaty of Amsterdam with the new Title VI, which makes provision for coordinating the national rules on offences and penalties applicable to organised crime, terrorism and drug trafficking.
48 Official Journal C 78 of 30.03.1995
49 Official Journal C 313 , 23/10/1996 P. 0012 - 0023
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1.2.3. The Treaty establishing a Constitution for Europe Judicial cooperation in criminal matters became part of the common procedures.
1.2.4. The Tampere European Council and the Hague Programme During the Tampere European Council and under the Hague Programme the objective of fighting organized crime at the European level was reiterated. The comprehensive approach proposed included: prevention and exchanges of best practices strengthening of network of competent national authorities. determination of common definitions, incriminations and sanctions in areas such as financial crime, drug trafficking, trafficking in human beings, high-tech crime and environmental crime, and money laundering.
To implement this, mutual recognition was labelled the “cornerstone” of judicial cooperation and Eurojust a key player. This implied mutual trust, coordinated investigations, equivalent standards for procedural rights, and the approximation of laws.
The Tampere European Council defined the principle of mutual recognition as a fundamental principle underpinning judicial cooperation in civil and criminal matters and stated that it should be possible to apply the principle to pre-trial orders as well as to final decisions50.
1.2.5. The Treaty of Lisbon The Treaty of Lisbon makes legal cooperation in criminal matters fall under the ambit of the EU. Hence, from the entry into force of the Treaty of Lisbon criminal such matters: follow the ordinary legislative procedure — co-decision and qualified majority in Council, may lead to the adoption of legal instruments with direct effect and enhanced legal monitoring, and
50 See also Gay Mitchell, Thematic Paper on Organised Crime Asset Confiscation as an Instrument to Deprive Criminal Organisations of the Proceeds of their Activities, Special Committee on Organised Crime, Corruption and Money Laundering (CRIM) 2012-2013, September 2012. Available at: http://www.europarl.europa.eu/document/activities/cont/201210/20121016ATT53712/20121016ATT5371 2EN.pdf
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will be subject to the joint procedure in respect to international agreement.
Further, the Treaty provides for national safeguards. These take the following form: a minimum of one-quarter of Member States may present legislative initiatives, a special legislative procedure implying unanimity in Council, consultation or, depending on the case, the assent of Parliament. if a Member State believes that a legislative proposal could infringe fundamental aspects of its criminal justice system, it can request that the matter be referred to the European Council.
Of importance, the Treaty of Lisbon states that the powers of the Court of Justice will remain unchanged for a transition period of five years.
1.2.6. Eurojust A Council Decision of 28 February 2002 created Eurojust to help fight against serious, organized and transnational crime. Eurojust is made up of active prosecutors, judges, or police officers form the different Member States. Eurojust’s role is fundamental in combating transnational crime and spreading best practices. Eurojust provides support at every level of the fight against organized crime from the provision of information to the facilitation of assistance and mutual recognition. Eurojust and the European Judicial Network are key in the building of trust and a common legal culture. Eurojust could become the central body for cooperation and mutual recognition. This is confirmed by the fact that the Treaty of Lisbon makes provision for the possibility of establishing a European Public Prosecutor’s Office from Eurojust.
1.2.7. Relevant legal and policy instruments adopted Over the last fifteen years legal and policy instruments have been adopted to facilitate cooperation between national authorities in fighting organized crime. These are listed below.
Communication COM/2005/0195 from the Commission of 19 May 2005 to the Council and the European Parliament: Communication on the mutual recognition of judicial decisions in criminal matters and the strengthening of mutual trust between Member States51.
51 COM(2005) 195 final. Available at http://eur- lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=en&type_doc=COMfinal&an_ doc=2005&nu_doc=195
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Green Paper from the Commission of 23 December 2005 on Conflicts of Jurisdiction and the Principle of ne bis in idem in Criminal Proceedings which aims at solving conflicts of jurisdiction between national courts, by allocating cases to an appropriate jurisdiction52.
Green Paper from the Commission of 26 April 2006 on the presumption of innocence, which aims at ensuring that the presumption of innocence and related rights are understood and applied similarly in all Member States53.
Joint Action 97/827/JHA of December 1997 adopted by the Council on the basis of article K.3 of the Treaty on European Union, establishing a mechanism for evaluating the application and implementation at national level of international undertakings in the fight against organised crime54.
Council Decision 2007/845/JHA of 6 December 2007 concerning cooperation between Asset Recovery Offices of the Member States in the field of tracing and identification of proceeds from, or other property related to, crime55.
Council Framework Decision 2006/960/JHA of 18 December 2006 on simplifying the exchange of information and intelligence between law enforcement authorities of the Member States of the European Union56.
Joint Action 98/428/JHA of 29 June 1998 adopted by the Council on the basis of Article K.3 of the Treaty on European Union, on the creation of a European Judicial Network57.
52 COM(2005) 696 final. Available at http://eur- lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=en&type_doc=COMfinal&an_ doc=2005&nu_doc=696
53 COM(2006) 174 final. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2006:0174:FIN:EN:HTML
54 O.J. L 344, 15.12.1997.
55 OJ L 332, 17.12.2007, pp. 103-105.
56 OJ L 386, 29.12.2006, pp. 89-100.
57 OJ L 191 , 07/07/1998 P. 0004 – 0007. See at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31998F0428:en:HTML
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Council decision 2011/427/JHA of 28 May 2001 establishing a European Crime Prevention Network, which seeks to bring together national contacts points around a multidisciplinary approach, promote exchanges of information and experience, in particular through the use of a website58.
Decision 2001/515/JAI of 28 June 2001 establishing a second phase of the programme of incentives and exchanges, training and cooperation for the prevention of crime (Hippokrates)59.
Joint Action 98/245/JHA of 31 March 1998 on the exchanges, training and cooperation for persons responsible for action to combat organised crime (Falcone)60.
Joint Action 96/636/JHA of 8 November 1996 setting up a programme of incentives and exchanges for legal practitioners (Grotius)61.
Joint Action 97/12/JHA of 10 January 1997 setting up a programme for the exchange and training of, and cooperation between, law enforcement authorities (Osin)62.
Council framework decision 2002/465/JHA of 13 June 2002 on joint investigation teams, which addresses criminal investigations in more than one Member States63.
Council decision 2002/630/JHA of 22 July 2002 establishing a framework programme on police and judicial cooperation in criminal matters (Agis)64.
58 OJ L 153/1 08/06/2001 P. 001 – 0003. See at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:153:0001:0003:EN:PDF
59 OJ L 186, 07/07/2001.
60 OJ L 99, 31/03/1998.
61 OJ L 287, 08/11/1996.
62 OJ L 7, 10/01/1997.
63 OJ L 162, 20/06/2002 P 0001 – 0003. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:162:0001:0003:EN:PDF
64 OJ L 203, 01/08/2002
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Some legal instruments were adopted with the objective of ensuring some form of harmonization in procedures, the definition of offences and the imposition of sanctions. Some of these are listed below.
Council Act 2000/C 197/01 of 29 May 2000 establishing, in accordance with Article 34 of the Treaty on European Union, the Convention on Mutual Assistance in Criminal Matters between the Member States of the European Union65;
Council decision 2000/375/JHA of 29 May 2000 to combat child pornography on the Internet66.
Council framework decision of 15 March 2001 on the standing of victims in criminal proceedings67.
Directive 2001/97/EC of the European Parliament and of the Council of 4 December 2001 amending Council Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering68.
2001/500/JHA: Council Framework Decision of 26 June 2001 on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime69.
Council framework decision 2002/475/JHA of 13 June 2002 on combating terrorism. This approximates the definition of terrorist offences, penalties and sanctions in all of the Member States70.
65 OJ C 197, 12.7.2000, p. 1–2. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000F0712(02):EN:NOT
66 OJ L 138, 9.6.2000, p. 1–4, Available at http://eur- lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=32000D0375& model=guichett
67 OJ L 82, 22.3.2001, p. 1–4. Available at http://eur- lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=32001F0220& model=guichett
68 OJ L 344, 28.12.2001, p. 76–82. Available at http://eur- lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&numdoc=32001L0097&lg=EN
69 Official Journal L 182 , 05/07/2001 P. 0001 – 0002. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001F0500:EN:HTML
70 OJ L 164, 22.6.2002, p. 3–7. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32002F0475:EN:HTML
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Council framework decision 2002/584/JHA of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States. This replaces extradition procedures with a simplified system of surrender between judicial authorities for a range of serious crimes71.
Council framework decision 2002/629/JHA of 19 July 2002 on combating trafficking in human beings72.
Council framework decision 2003/80/JHA of 27 January 2003 on the protection of the environment through criminal law73 as annulled by ECJ Decision C-176/03 of 13 September 200574, which in itself clarified expansively the competence of the EU stating that:
“[…] While it is true that, as a general rule, neither criminal law nor the rules of criminal procedure fall within the Community's competence, this does not, however, prevent the Community legislature, when the application of effective, proportionate and dissuasive criminal penalties by the competent national authorities is an essential measure for combating serious environmental offences, from taking measures which relate to the criminal law of the Member States which it considers necessary in order to ensure that the rules which it lays down on environmental protection are fully effective.[…]”
Council framework decision 2005/214/JHA of 24 February 2005 on the application of the principle of mutual recognition to financial penalties75.
71 OJ L 190, 18.7.2002, p. 1–20. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32002F0584:EN:NOT
72 OJ L 203, 1.8.2002, p. 1–4. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32002F0629:EN:NOT
73 OJ L 59, 05.02.2003, P. 55-58. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:029:0055:0058:EN:PDF
74 Available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=59714&pageIndex=0&doclang=EN&mod e=lst&dir=&occ=first&part=1&cid=1669685
75 OJ L 76, 22.3.2005, p. 16–30. Amended by Framework Decision 2009/299/JHA, OJ L 81 of 27.3.2009. Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32005F0214:EN:NOT
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Council Framework Decision 2008/909/JHA of 27 November 2008 on the application of the principle of mutual recognition to judgements in criminal matters imposing custodial sentences or measures involving deprivation of liberty for the purpose of their enforcement in the European Union76.
Council framework decision 2008/978/JHA of 18 December 2008 on the European evidence warrant for the purpose of obtaining objects, documents and data for use in proceedings in criminal matters77.
Council Framework Decision 2008/675/JHA of 24 July 2008 on taking account of convictions in the Member States of the European Union in the course of new criminal proceedings78.
Directive 2011/99/UE of the European Parliament and the Council of 13 December 2011 on the European protection order aimed at ensuring that a victim that benefits from a protection order in one Member State may also benefit from the same protection in other Member States79.
Directive 2010/64/EU of the European Parliament and of the Council of 20 October 2010 on the right to interpretation and translation in criminal proceedings80.
Council Framework Decision 2009/948/JHA of 30 November 2009 on prevention and settlement of conflicts of exercise of jurisdiction in criminal proceedings. This establishes a compulsory exchange of information in order to avoid parallel criminal proceedings being conducted in two or more Member States on the same facts and concerning the same person81.
76 OJ L 327, 5.12.2008, p. 27–46. Amended by Framwork Decision 2009/299/JHA, OJ L 81 of 27.3.2009. Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32008F0909:EN:NOT
77 OJ L 350, 30.12.2008 P 72-92. Available at http://www.ecba.org/extdocserv/projects/EEW/EEW_FramDec181208.pdf
78 OJ L 220, 15.8.2008, p. 32–34. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32008F0675:EN:NOT
79 Official Journal L 338 , 21/12/2011 P. 0002 – 0018. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:338:0002:01:EN:HTML
80 OJ L 280, 26.10.2010, p. 1–7. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32010L0064:EN:NOT
81 OJ L 328, 15.12.2009, p. 42–47. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32009F0948:EN:NOT
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Council Framework Decision 2009/829/JHA of 23 October 2009 on the application, between Member States of the European Union, of the principle of mutual recognition to decisions on supervision measures as an alternative to provisional detention82.
Council Framework Decision 2006/783/JHA of 6 October 2006 on the application of the principle of mutual recognition to confiscation orders83.
Council Framework Decision 2003/577/JHA of 22 July 2003 on the execution in the European Union of orders freezing property or evidence84.
Council Framework Decision 2005/212/JHA of 24 February 2005 on confiscation of Crime-Related Proceeds, Instrumentalities and Property85.
1.3. General rules on the freezing and confiscation of criminal assets Regulations on the freezing and the confiscation of criminal assets apply in every Member States as a weapon against organized crime.
Due to increased cross-border activity, cooperation between Member States has developed on criminal matters. Various legal instruments, at the EU and international levels, have been adopted.
In some cases, specific instruments were developed between neighbouring Member States.
Even if legal cultures differ, common principles and objectives exist without question. There are as follows: developing efficient methods to seize and confiscate illegal assets to prevent criminal endeavours,
82 OJ L 294, 11.11.2009, p. 20–40. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32009F0829:EN:NOT
83 OJ L 328, 24.11.2006, p. 59–78. Amended by Framework Decision 2009/299/JHA, OJ L 81 of 27.3.2009. Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32006F0783:EN:NOT
84 OJ L 196, 2.8.2003, p. 45–55. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32003F0577:EN:NOT
85 OJ L 68, 15.03.2005, p. 49-51. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:068:0049:0051:en:PDF
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developing efficient tools to investigate criminal activity and stop it, implementing these methods and tools and protecting fundamental rights and in particular due process of law.
1.4. General rules on the freezing criminal assets Under Framework Decision 2003/577/JHA a freezing order refers to property that could be subject to confiscation or evidence86.
According to the Draft Directive, freezing means the “temporary prohibition of the transfer, destruction, conversion, disposition or movement of property or temporarily assuming custody or control of property”.
This process can achieve two main purposes: - securing the assets in order to proceed to a future confiscation, a fine or the restitution of the items to a victim; - using the assets as evidence in an ongoing investigation.
Both of those objectives apply in the Member States, separately or jointly but it is obvious that securing the assets is the mostly used objective in the Member States.
86 Council Framework Decision 2003/577/JHA on the execution in the European Union of orders freezing property or evidence; L196/45; 2 August 2003; Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:196:0045:0055:en:PDF
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Purpose of the freezing orders
Member Secure the Both Investigate States assets purposes AT BE BG CY CZ DE DK EE EL ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK
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Secure the assets
Investigate
Both
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In general the initial imposition of a freeze order is taken ex parte. This is natural in the context of the objectives pursued. If the suspected offender knew of the measure in advance he or she would implement any artifice to derail it in its objectives.
The process of freezing intervenes during the investigation or the instruction of the case, it is enforced prior to a conviction of the suspected offender and therefore is a preliminary phase to the application of a criminal sanction. Further no final transfer of property occurs, unlike confiscation.
Nevertheless, Finland considers that a decision of freezing is a coercive measure whereas Romania and Italy qualify it as a precautionary measure. This has an impact on the rights granted to suspected offenders.
In practice, freezing orders are used for similar purposes in all Member States and are implemented in similar fashions. There are three countries however that have what could be referred to as an extended freezing order since freezing order against the suspected offender can apply to third parties if it is suspected that the assets are held by such third parties. These countries are Latvia, Greece and Denmark.
Summary
All Member States have adopted regulations on the freezing of assets. In most Member States freezing orders aim at securing assets in order to proceed to a future confiscation, impose a fine or the restitution of the seized assets to a victim. In a few Member States freezing orders are generally used for evidence gathering purposes. Only eight Member States use freezing orders for both purposes. Freezing orders that extend to the assets of third parties are only possible in a handful of Member States.
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1.5. General rules on confiscation of criminal assets
1.5.1. Definitional aspects Confiscation is defined under the Draft Directive as a “penalty or a measure, ordered by a court following proceedings in relation to a criminal offence resulting in the final deprivation of property”.
Most confiscations existing in Member States would fall under this definition. Not all confiscations are considered penalties, some are considered safety measures as in Romania, Finland and Spain. In some cases they are part of a procedural law rather than substantive law. Yet they fall under the above definition as it includes the rather loose term “measure” although it could be argued that the words “following proceedings” would exclude a confiscation during proceedings. Confiscation does not have to be based on a conviction but must be ordered by a court “following proceedings”. Arguably, confiscations based on civil proceedings would not fall within the definition. However, if, as is the case in the UK for example, convictions based on civil proceedings run parallel to criminal proceedings, it may be argued that such measures fall under the scope of the definition. Interestingly, the Draft Directive mentions the word “deprivation”. This may result in limiting the applicability of the Directive to many confiscations from Member States as “final deprivation of property” is very restrictive and excludes confiscation measures that involve a change of control in the property. Under the European Convention for Human Rights, specific legal consequences attach to the word deprivation. If deprivation is the word used, the European Court of Human Rights would apply a higher standard to confiscation measures and consider that only a measure taken in the “public interest” could justify them. If on the other hand the concept of change of control is used then the lower standard of balancing individual rights against the general interest would apply.
In most countries, confiscations orders can be taken in relation to criminal proceedings. They are not always automatic but can be as in Malta. IN some countries confiscation orders can also convert into a prison sentence where the amount identified in the confiscation order is not recovered.
1.5.2. Type of offences concerned Confiscation can pertain to any kind of unlawful criminal conduct. In most jurisdictions confiscation is applied to wide categories of offences without specific enumeration. In some countries other criteria are applied than just the offence. The offender’s lifestyle is
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one triggering element for confiscation in the UK. In France, only those offences that can be punished by a prison sentence of five years at least can give rise to confiscation.
In Greece however confiscation only applies to offences specifically enumerated by the law a general confiscation principle of criminal offences would be forbidden by the constitution. Interestingly, the list of offences susceptible to confiscation is such that the result is similar to the general confiscation principle applied in other Member States.
France has a mixt system. On the one hand confiscation generally applies for all offences that can be punished by a prison sentence of five years at least. On the other hand, confiscation may be ordered by the judge for lesser offences if specifically provided for in the law.
Ireland applies a comparable system.
1.5.3. Person concerned Persons concerned by freezing or confiscation orders are either natural or legal persons.
As to natural persons, not only the suspected offender/convicted offender can be the subject of a confiscation but any third party who holds or benefits from the criminal activities of the suspected offender/convicted offender can also see their assets seized or confiscated. Among these third parties one can identify categories. First, are the third parties, family members or friends, who act as recipients of the suspected offender/convicted offender’s crime generated assets for purpose of hiding such assets. Second, are the third parties that invest with the suspected offender/convicted offender in some form of legitimate business. Third are the third parties that inherit the assets from the suspected offender following his death. In many countries, the assets transferred to third parties can be confiscated. However, limits apply where the third party is bona fide or where the third party inherits the estate of the dead suspected offender. In case a third party claims to be bona fide, they will have to demonstrate that they had no knowledge of the illegal origin if the assets. Hence, the onus of proving good faith is on the third party.
In some countries the assets held by legal persons can also be confiscated whether they are considered a third party as described above or whether they are directly considered as having “committed” the offence. In Denmark, Spain, France, Finland, Slovenia, Slovakia and Lithuania, confiscation applies to legal persons if such legal person – company – is convicted of financial felonies. Page 48 of 477
Subjects of the confiscation Member States Convict Legal person Third Party AT Limited to the items used to commit the BE offence BG CY CZ DE Necessary knowledge of the origin of the DK proceeds of crime EE Necessary knowledge/money laundering or EL terrorist financing ES FI Necessary knowledge or profit Specific presumption due to personal FR relation with an offender HR HU IE Under condition of impossibility of criminal IT conviction LT Necessary knowledge or suspicion of such LU LV MT Restrictive list of crimes NL PL PT Necessary knowledge RO SE SI Presumption due to the way of acquisition SK UK
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Confiscation may extend to third parties assets.
Yes
No
Yes under specific conditions
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1.5.4. Type of assets Different kinds of assets can theoretically be confiscated: - Those used to commit the offence - Those resulting from the offence (proceeds or product of the offence), - Those derived from those resulting from the offence, - Those whose existence can only be explained by an offence.
In all Member States, confiscation of the assets that are the direct or indirect products of the offence is possible, because those often qualify the offence. Robbery is an example.
Confiscation may also include the benefits derived from the proceeds of crime. Any profit made from investing the assets resulting from the offence may also be confiscated. See a prime example of this in the UK case of R v Waya87.
In Slovenia, Romania, Poland, Netherland, Malta, Lithuania, Luxembourg, Greece and Germany, the law states that the confiscation applies also to the payment received for committing the offence.
Almost all the Member States legislations provide that confiscation can concern the assets used to commit the offence, such as in the case of drug trafficking the money used to purchase the drugs.
In most Member States, when the specific assets targeted by the confiscation cannot effectively be confiscated because they have been either destroyed, immobilized or have simply vanished, an asset of equivalent value will be forfeited instead. This replacement can be the equivalent in cash or an object of the same value, depending on the national rules.
87 R v Waya [2012] UKSC 51
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1.5.5. Objects of the confiscation Member Used for the From the offence Equivalent value States offence AT BE BG CY CZ DE DK EE EL ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK
1.6. Specific rules on confiscation of criminal assets As outlined before confiscation of criminal assets is commonly preceded by a conviction. If a person has committed an offence, the question may then be asked as to whether they benefited from such an offence in a financial way and if so that any benefits should be evaluated and removed from the offender’s possession. Page 52 of 477
In some cases however the offender cannot be convicted because he or she is incapacitated or has absconded and cannot stand trial. Here, it was felt that assets that may have been seized in case of an in flagrante delicto for example should not be returned to the defendant or remain frozen ad vitam aeternam. And a concept of criminal non- conviction based confiscation was developed. In some countries, it focused on the assets and led to in rem civil proceedings. In others, it remained linked to the offender and the criminal setting. Thus, one can consider that there are two types of non-conviction based confiscations. The first one is criminal non-conviction based confiscation. The second one is non-criminal or in rem non-conviction based confiscation. Alongside these tools two more tools were developed. These are extended confiscations following a conviction (“ECFC”). Among these, the first one focuses on the assets in the possession of a convicted offender. This is the common extended confiscation or Offender Based Extended Confiscation Following Conviction (“OBECFC”). An offender is convicted for an offence but has in his possession a lot more that can be valued as proceeds from the offence for which he was convicted. In these circumstances, and provided that the facts point to the assets being linked to criminal activities, they will be confiscated unless the offended can ascertain their legitimate origin. The second ECFC is one that focuses on the assets and can be referred to as an Asset Based Extended Confiscation Following Confiscation (“ABECFC”). The offender is convicted but the proceeds of the offence seem to have been transferred to or laundered using third parties. In these circumstances, where it is possible to trace the assets or link the offender to the third parties and facts point to the third parties being instrumental to the attempted hiding of the proceeds of crime, they will be confiscated unless the third party can show that he or she can ascertain that the assets are legitimate or that she or he is bona fide.
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The diagram below shows these different types of confiscation.
CONFISCATION NON-CONVICTION BASED
FOLLOWING A CONFISCATION CONVICTION
Can be extended Can be either
Criminal Non-Conviction Based Confiscation issued when conviction is not possible or special
Confiscation extends circumstances dictate to assets other than (CNCBC) those directly linked to offence in possession of offender (OBECFC)
Non-Criminal Confiscation extends based and In to assets in possession Rem of third parties linked confiscation
to offender (NCB) (ABECFC)
1.6.1. Criminal non-conviction based confiscation of criminal assets If criminal confiscation based systems exist in all Member States, the same may not be said concerning criminal non-conviction based confiscation of criminal assets. In the countries in which such a system exists its use is mostly restricted to exceptional circumstances. Page 54 of 477
Non-conviction based confiscation (“NCBC”) is a concept that may be difficult to apprehend from a legal perspective as it involves a mixture of in personam and in rem principles. In effect, the person is not a convicted felon but his/her assets are “criminal”. It is also a system that may lead to the forfeiture of assets without a conviction or a trial and thus raise fundamental rights issues.
In the countries where the regime exists it is limited to specific situations and conditions apply. Conditions apply because of the fact that the process applies without conviction and that the risk of violation of fundamental rights is thus heightened.
In Slovakia, Czech Republic, Italy, Portugal and Romania, confiscation is a protective measure and can thus be enforced prior to a conviction.
In Bulgaria, Italy, Ireland, the United Kingdom, Romania, Slovenia and Slovakia, even if the process is related to a criminal offence, it can follow civil procedure. In Ireland, Bulgaria and the United Kingdom the link with the “criminal offence” may be more tenuous than in other countries.
Legal persons can sometimes be the object of such NCBC as in Slovakia and Lithuania.
In Bulgaria, the Czech Republic, Italy and Slovakia NCBC applies against third parties to the procedure.
In all Member States where NCBC is permitted, the measure is taken only where conviction is not possible. Either because the defendant is not criminally liable or in the case of death, absconding or long-term illness or incapacity.
In most Member States admitting NCBC, a NCBC can only be ordered after criminal proceedings are launched and before a conviction. NCBC is are often the only “sanction” possible and was developed for cases when, even though the assets were clearly from criminal origin, for some specific reasons their holder could not be convicted (for example their holder may be incapacitated or have absconded).
In Finland and in Lithuania, a classical criminal procedure is not even required, and a NCBC can be ordered if the person cannot be convicted, because he is a minor for example.
Because of the fundamental rights issues that NCBC raise, most countries have set important limitations on the possible use of NCBC. Page 55 of 477
In Ireland and the United Kingdom, the NCB is based on an in rem action focalised on the assets seized instead of the potential offender, so it is considered that his rights are not really jeopardized because the assets seized were not his in the first place, they were obtained illegally.
Other conditions such as the characteristics of the objects seized (dangerous items in Germany or Portugal) or the membership of the owner in a criminal group (in Luxembourg or Latvia) impose a high level of scrutiny and much justification by the enforcers before a decision is made.
In Sweden and Slovakia, the NCBC cannot apply to situations such as the death of the convict, his flight abroad or his illness. This greatly reduces the scope of the tool.
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Non-conviction based confiscation Possible No No Other criteria Existence Protective MS civil criminal conviction applied of NCB measure liability possible AT BE X Possible for 3rd BG Party CY Possible for 3rd CZ Party Dangerous item or DE own at the time of the process DK X EE X EL X ES X FI FR X HR Link HU property/offence IE IN REM Possible for 3rd IT party Not a For legal persons LT penalty Money laundering LU and terrorism Member of LV specific groups MT X NL X PL PT Dangerous item RO Summons within 5 years/not for SE absconding or illness
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SI not for death, illness or SK absconding / for legal persons and 3rd party Within 20 years / UK IN REM
1.6.2. In Rem non-conviction based confiscation of criminal assets An in rem NCBC consists basically in a procedure directed against the assets, not their owner. In most cases assets are seized during a search conducted by enforcement agents. The origin of the assets is unexplained. Although, this is called a non-conviction based confiscation, most often assets are found at locations where crimes have been committed or are held by criminal with a criminal record. Because the process focuses on assets, the issue of third party owners does not arise. In the UK, the Courts will decide “on the “balance of probabilities” whether the assets were illegally obtained and should be forfeited to the State. The “Balance of probabilities” is the civil standard of proof in the UK. It is a lot harder to prove guilt “beyond reasonable doubt” in the criminal settings.
In Slovenia, the Confiscation of Property of Illicit Origin Act which came into force in May 201288, provides for the confiscation of assets of illicit origin through in rem proceedings.
In Italy, confiscation as a precautionary measure has existed since the 80s. The system in Italy was elaborated in response to violent organised crime. Thus, the centre of attention is placed on the danger to society that assets represent if used for the perpetration of violent crimes. As a result, if the prosecution can show that a likelihood that the assets will be used in committing such crimes, the court will issue the order for their seizure and confiscation. The Italian system falls into both or neither an in rem and/nor in personam category. As stated before the proceedings are aimed at removing the potential cause of a danger to society. They are not directed at the person specifically or the assets, but rather at the danger that the combined person and assets represent for society. It is a goal-based system that is more concerned about the objective pursued than the legal
88 Official Gazette of the Republic Slovenia, No. 91/2011.
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category created. The Italian system has proven its efficiency. Italy reported an aggregate amount of confiscations in 1996 of 374.2 million US dollars89.
As in Italy, Ireland has had to deal with extremely violent criminal organizations. Its response was similar and came a little later. Ireland adopted the Proceeds of Crime Act in 1996.
In rem confiscation exists in Greece and Bulgaria but the civil process can only start upon securing a conviction. Thus, these do not fall within the category of non-conviction based confiscations. However, it should be noted that on 3 May 2012, Bulgaria adopted a new piece of legislation that effectively changes the previous in rem regime enabling civil confiscation and forfeiture at the stage of the indictment. The Bulgarian law allows for in rem proceedings to be brought against assets derived from any type of illegal activity, which is broader than criminal activity. As stated by the Bulgarian authorities the new laws introduces:
- “The shortening of the statute of limitation period from 25 years to 10 years; - The threshold of the asset value that falls within the notion of "significant value" which exceeds 250 000 Leva (BG currency) and which shall be treated as a prerequisite for confiscation of the respective estate, if the legal sources for its acquirement have not been proven; - Introducing the civil procedure approach when threshold exceeds 250 000, then a civil court decision would suffice (thus no need for the penal proceeding anymore); - Administrative offences will also be precondition to start a forfeiture procedure – the proceeds of administrative offences should be over 150 000 Leva (BG currency); - Introducing a new institution, that is the Inter-institutional Council for Managing of the Sequestered Assets (ICMSA). The main function of the Council will be focused on the proposing to the government a way to distribute the confiscated assets, to donate them for humanitarian purposes, or to task someone with their sale. The new law provides that the Inter-institutional Council for Managing of the Sequestered Assets is to be a collective authority
89 Smellie, A. Prosecutorial challenges in freezing and forfeiting proceeds of transnational crime and the use of international asset sharing to promote international cooperation: the need for global standards. Journal of Money Laundering Control, Vol. 8, Iss: 2, 2004, pp.104-114. Available at: http://www.judicial.ky/wp- content/uploads/papers/Proceeds%20of%20Crime%20and%20Asset%20Sharing.pdf
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consisting of vice-ministers appointed by the Minister of Justice, Minister of Finance, Minister of Economy, Energy and Tourism, Minister of Work and Social Politics and Minister of Regional Development and Public Works, and will be chaired by a Vice-Minister of Finance. According to this new law the Commission will be obliged to inform the ICMSA of the court-decisions on civil confiscation of assets entered into force at least once per month. All the positive court decisions and enforcement orders have to be forwarded to the Council together with the rest of the documents. The Commission has to prepare and submit a report for each single case”.
The law has not lead to civil forfeitures at this date since it entered into force on 19 November 2012.
1.6.3. Extended confiscation of criminal assets The extended confiscation of criminal assets is a regular confiscation applied to assets in possession of, or belonging to, a convicted person which are not the proceeds of the specific offence for which the person was convicted. Such a restriction of the property rights could be censured by the ECHR if it were not justified. That is why the Member States who apply this process have set specific conditions.
Member States authorities interviewed that have such a tool have stated that they consider this tool very effective in the fight against organised crime.
Based on the information provided by national authorities and the reports by local legal professionals in the context of this study, Cyprus, Greece, Ireland, Latvia, Lithuania, Luxembourg, Poland, Portugal, Slovakia and Slovenia have no regulations expressly providing for extended confiscation.
CYPRUS: According to Section 7 (2) of the Anti-Money Laundering Law the court may, for the purpose of determining whether the accused person has acquired proceeds from the commission of a predicate offence and assessing the value of these proceeds, assume, unless the contrary is proved, that the proceeds are criminal proceeds. Therefore, the burden of proof is shifted to the defendant who has to demonstrate the lawful origin of the property. Furthermore, Section 72 of the Anti-Money Laundering Law, provides that a court shall apply the civil burden and standard of proof and so decides issues on a “balance of probabilities".
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IRELAND: Extended confiscation as such does not exist in Ireland. However, its objectives are reached through the non-conviction based model, which was introduced by the provisions of the Proceeds of Crime Act 1996.
LATVIA: According to Section 355 of the Criminal Procedure Law the confiscation of property is possible, regardless of whether a person has been convicted or not, if the property is recognised as criminally acquired. Property is recognised as criminally acquired, if it has come into the property or possession of a person directly or indirectly as a result of a criminal offence. In case of participation in organised criminal groups and other serious offences the burden of proof lies with the defendant. If the opposite has not been proved, property and financial resources shall be recognised as criminally acquired. The Latvian authorities are of the opinion that they have implemented FD 2005/212/JHA with the above provisions.
POLAND: According to Article 45 (2) of the Criminal Code, in case the perpetrator has been convicted for the crime as a result of which he acquired, even indirectly, a property- related benefit of considerable value, it is assumed that the property he has taken into possession or in relation to which he acquired any title of ownership during the time of crime or after the crime was committed shall constitute a benefit acquired by committing the crime till the moment a judgement – even an invalid judgement - has been pronounced, unless the perpetrator or other interested party shows evidence to the contrary.
PORTUGAL: Law № 5/2002 provides the investigating authorities with the possibility of extended confiscation in cases concerning the investigation of very serious crimes. According to Article 7, in the event of conviction for such an offence, and for the purpose of the confiscation of assets by the State, the difference between the value of the defendant’s actual property and one that is consistent with his lawful income is considered as benefit from a criminal activity.
SLOVAKIA: According to Article 58(1) and 59(1) of the Criminal Code, if confiscation was imposed in relation to a particularly serious crime, the whole of the property of the convicted person can be confiscated, regardless of its origin, if by committing the crime the perpetrator obtained extensive property benefit or caused extensive damage.
SLOVENIA: The Act on the Forfeiture of assets of illegal origin (referred to in paragraph 1.7.1 below) provides for the confiscation of the illegally acquired assets of persons who acquired these assets or to whom the assets are transferred free of charge or for Page 61 of 477
consideration that is disproportionate to the actual value of the assets in question. The Slovenian authorities are of the opinion that they have implemented FD 2005/212/JHA with the above provisions.]
Member States that have adopted extended forms of confiscation have also put in place safeguards to guarantee the protection of fundamental rights.
In general the Courts will evaluate offender’s standard of living and compare that with the income that is generated from legal activities. The difference will be considered proceeds that can be confiscated.
In some cases extended confiscation may only apply to serious crimes.
In Denmark, Estonia, France and Sweden, only serious crime can lead to extended confiscation.
In some countries, the extension will be facilitated depending on the offender’s association with specific groups. In case of an acquaintance with terrorist or criminal organizations, the convict will be suspected of illegal income which will be confiscated.
The last existing system is a very large one related to the possession of the offender. It considers that any asset possessed by the convict at the time of the judgement has a criminal origin and can be confiscated.
Conditions for applying the extended confiscation
Part of a criminal or Property in Member Criminal Duration of the a terrorist possession of the States lifestyle sentence organization offender
AT BE BG CY NO CZ =/> 10 years DE DK =/> 6 years EE >3 years
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EL NO ES FI =/> 4 years FR =/> 5 years HR HU IE NO IT LT NO LU NO LV NO MT NL 6-year term PL NO PT NO RO SE =/> 6 years SI NO SK NO UK
Summary
Definitions on the word “confiscation” vary greatly between Member States and within Member States. Confiscation is sometimes used at different phases of the proceedings, sometimes after a decision. It is sometimes a measure that is an extension on the freezing of assets but can also be a penalty. Confiscation can concern all types of offences. In some countries confiscation is used as a general tool to fight all types of unlawful conducts including criminal ones. In others it is an exceptional tool applied in some specific instances of serious crime. Confiscation can apply to natural and legal persons whether they are the suspected offender, the convicted offender or connected to the convicted offender, as third parties.
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In most Member States confiscation will only apply to convicted offenders who are natural and legal persons. Confiscation can extend to third parties in most Member States. Assets transferred directly or indirectly by the offender may be confiscated. The extension is not automatic however. In general the extension is available only where a conviction has been secured for the offender. In some countries the extension is possible only in cases of very serious crimes (i.e. Malta). In others, the extension will apply only if it can be shown that third parties had constructive knowledge of the illegal activities of the offender (i.e. Denmark and Finland). But some countries have a reversed burden of proof whereby the connected third party must prove their good faith (i.e. France). Another form of extension is possible focusing on the offender’s assets. Where a person is convicted of an offense, not only can assets directly connected to the offence be confiscated but other assets belonging to the offender - and not connected to an offence - can, under certain circumstances, also be confiscated. In line with the minimum rules established by Framework Decision 2005/212/JHA, in some countries, extended confiscation is only possible in the case of serious crime (i.e. Austria, Bulgaria, The Czech Republic, Denmark, Estonia, Finland, France, the Netherlands and Sweden). For these countries, the prison term for the related offence must be on average at least 5.70 years.
The objects of confiscation can be assets: • Used to commit the offence • Resulting from the offence • Derived from those resulting from the offence • Those whose existence can only be explained by an offence.
All Member States have regulations enabling the confiscation of assets derived from the offence. In all Member States, assets used for the commission of the offence may be confiscated. And in all Member States if a specific asset has been destroyed or is unavailable, an asset the value of which is equivalent to the original asset, may be confiscated.
The last expansion on the scope of confiscation has been what is generally referred to as non-conviction based confiscation of assets. Non-conviction based confiscation can be criminal non-conviction based confiscation of assets or non-criminal non-conviction based confiscation. Criminal non-conviction based confiscation implies that conviction is impossible. In such case, as well as in non-criminal non conviction based
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confiscation, a court decision orders the confiscation. These types of confiscations can relate to criminally generated assets or assets derived from unlawful activities. Most Member States have a criminal non-conviction based confiscation system that applies in limited circumstances and in particular where the suspected offender has absconded or the assets are dangerous. In some Member States confiscation of assets can be ordered in the context of in rem proceedings.
1.7. Recent developments on the freezing and confiscation of criminal assets Recent legislations have been adopted in some Member States. Some of them provide for modification of the internal regime of freezing and/or confiscation.
Others developments are aimed at transposing the Framework decisions 2006/783 and 2003/577 and the UN Conventions (see 1.6, 1.7 and 1.8 for more details).
1.7.1. Recent changes related to substantive regulations on confiscation In Finland, the 806/2011 act has been adopted and will normally enter into force in 2014 : the only coercive measure with regard to the freezing of criminal assets will be sequestration.
In France, a new legislation has been adopted on the 9 July 2010. This brings several changes: - the law creates a general procedure concerning all seizures, whether they are probationary or protective; - only the instructing judge, the Juge des libertés et de la détention (JLD) and magistrates in the trial court (while ordering confiscation) are entitled to order a seizure; - Framework decision 2006/873 has been transposed (see hereunder); - AGRASC, the authority in charge of the management of seized or confiscated assets, is created; - onus of the proof of the origin of the asset has been reversed and is now on the offender;
Croatia has recently adopted two major pieces of legislation. The first one, the Law on Procedure of Confiscation of Proceeds of Crime and Offence of 2010, integrates into one law various regulations that existed previously on confiscation of illegally acquired
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property. The second one, the Law on Seizure of September 2012, regulates the freezing of assets in Croatia.
Bulgaria has adopted a complete new regulation in 2012 on the confiscation of assets. This regulation entered into force in 2013.
In Italy, delegating law n. 136/2010 provides new procedures and in particular articulates the protection of third party rights.
In Romania, law n°28/2012 amends two legislative acts, provides that during the criminal trial before rendering a final decision, the criminal prosecution authority or the court, which has taken the measure on the seizure, may order the valuation of the seized assets.
In Slovenia, the Confiscation of Property of Illicit Origin Act (Official Gazette of the Republic Slovenia, No. 91/2011) provides the confiscation of assets of illicit origin. This legislation was adopted in October 2011 and it came to force in May 2012.
1.7.2. Recent changes related to mutual recognition In Cyprus, the most recent amendments were made with Law No. 80(I)/2012 and 192(I)/2012, mainly in order for Cyprus legislation to be in conformity with international Convention and Framework-decision.
In Sweden, act 2011:578 Recognition and Execution of Confiscation Orders in the European Union and the Ordinance on Recognition and Execution of Confiscation Orders within the European Union came into force on 1st July 2011, and concerns, as indicated in its name, recognition of other Member States’ decisions.
In Hungary, Act C of 2012, the new Criminal Code (entering into force on 1st July 2013) transposes Framework decision 2003/577 and 2006/783.
In Ireland, Article 54 of the UNCAC has been implemented by way of the Criminal Justice (Mutual Assistance) Act 2008 (Section 4) Order 2012.
Summary
Changes are occurring in a few Member States with respect to their regime on
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freezing and confiscation of criminal assets. A number of countries have recently adopted new pieces of legislations expending the scope of the previous systems or creating entirely new ones (i.e. Bulgaria). Some countries have also taken positive steps in facilitating mutual recognition. Others still have plans to adopt new regulations. Regulations on the freezing and confiscation of assets and on mutual recognition are not fully laid down. Recent regulations will need to be enforced and reviewed by the courts. Once this process of teething has taken place the effectiveness of these regulations can be assessed.
1.8. Framework Decisions Mutual recognition of freezing and confiscation orders is currently regulated at the EU level by Framework Decisions. This is a result of the distribution of competences between EU institutions. However, since the entry into force of the TFEU competences and the legislative process have been modified.
Before any new regulations are adopted however the Framework Decisions shall continue to apply.
Framework decisions are binding as to the result to be achieved, but leave choice of form and method to the Member States for their implementation. They have no direct effect.
The Treaty of Lisbon changes nothing in this respect, as Article 9 of the Protocol 36 on transitional provisions states:
“The legal effects of the acts of the institutions, bodies, offices and agencies of the Union adopted on the basis of the Treaty on European Union prior to the entry into force of the Treaty of Lisbon shall be preserved until those acts are repealed, annulled or amended in implementation of the Treaties. The same shall apply to agreements concluded between Member States on the basis of the Treaty on European Union.”
The adoption of new instruments replacing those adopted under the former Title VI TEU, such as the Framework Decisions of interest in this study, is consistent with TFEU
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Declaration 50 concerning Article 10 of the Protocol on transitional provisions90. This Declaration invites the newly empowered institutions to adopt amending or replacing legal acts with the five-year transitional period. Thus, replacing the said Framework Decisions by 2014 would be relevant.
This Declaration has to be read in conjunction with Article 10(3) which states that “In any case, the transitional measure mentioned in paragraph 1 shall cease to have effect five years after the date of entry into force of the Treaty of Lisbon”.
The understanding is thus that the Framework Decisions would be replaced with new acts as soon as the transition period ends.
It should be further noted that pursuant to Article 35 (2) of TFEU, the ECJ has limited jurisdiction over the Third Pillar.
According to article 34 TFEU, no infringement procedure could be launched by the Commission against a Member State who had not transposed Framework Decisions. In addition, after the adoption of the Lisbon Treaty, competences of the ECJ remains the same regarding acts adopted under title VI of TFEU until December 2014.
1.9. Transposition status of Framework Decision 2003/577/JHA This Framework decision relating to freezing orders creates a mechanism where the competent authority who issues a freezing order can send it, using a specific certificate, directly to another competent authority in the Member State where the order will be executed.
This mechanism is different from the usual mutual legal assistance procedure, which usually involves central authorities, collecting and transmitting requests from other Member States. Eurojust’s annual report for 2010 and 2011 shows that in its experience Framework Decision 2003/577/JHA appears to be used seldom despite its transposition in the legislation of many Member States. This is confirmed by the answers provided by Member States for the implementation of this Study.
90 Consolidated Version of the Treaty on the Functioning of the European Union, Protocol 36, Title VII, Article 9, 2008 O.J. C 115/47, at [448]. Available at http://www.consilium.europa.eu/uedocs/cmsUpload/st06655-re01.en08.pdf
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The Framework Decision is generally considered to be “complicated” to use and limited in scope by comparison to letters of request under mutual legal assistance treaties. As a result, there is little incentive for those Member States who have not transposed it, to actually transpose it.
Further, since the Framework Decision is not used one should ask oneself if there is a need for such provisions in a more efficient form. Provisions on mutual recognition are clearly outside the scope of the Draft Directive.
1.9.1. Transposition in the Member States and in Croatia Member Implementation of Framework decision Entered into force State 2003/577 AT Federal Act on Judicial Cooperation in YES Criminal Matters with the Member States of the EU, Federal Law Gazette Nr 36/2004 BE 1st September 2006 Law YES
BG Law on recognition and execution of freezing YES orders or evidence CY Prevention and Suppression of Money YES Laundering and Terrorist Financing Amendment Act of 2010 58 (I)/2010. CZ Act No. 253/2006 Coll YES DE the Act on International Legal Assistance in YES Criminal Matters on the basis of the Act to Implement Council Framework Decision of 2003-07-22 on the enforcement of decisions concerning the securing of assets or evidence in the European Union of 2008-06-06 DK Act No. 1434 of 22 December 2004 on the YES Execution in the European Union of Certain Criminal Rulings Amended by Restatement Act No. 213 of 22 February 2013 EE Act of ratification, 10th February 2003 and YES changes to the Criminal Procedure Code which entered into force in May 2008. EL Not transposed / a draft law will be presented NO
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in March 2013 ES Act 18/2006 , dated 5th June 2006 for EU YES efficiency on forfeiture orders and evidence protection orders in criminal proceedings Organic Act 5/2006 , dated 5th June, supplementing of the Law for EU efficiency on forfeiture orders and evidence protection orders in criminal proceedings, amending Organic Act 6/1985, dated 1st July 1985, Jurisdiction Act. FI Act 540/2005 on the execution of orders YES freezing of property or evidence in the European Union FR Law n°2005-750 of 4 July 2005 then modified YES by the law n° 2010-768 of 9 July 2010 (Article 695-9-1 to 695-9-30 of the Code of criminal procedure) HR Act of the 9th July 2010 on judicial co- NO91 operation in criminal matters with member states of the European Union HU Act CLXXX of 2012 on Cooperation in Criminal YES Matters with the Member States of the European Union IE Criminal Justice (Mutual Assistance) Act, 2008 YES IT Legislative Decree no. 159 of 6 September YES 2011, supplemented by Legislative Decree n. 218 of 15 November 2012 LT Law No X-1236 dated 28 June 2007, OG 2012, YES No 81-3312 LU No implementing regulations NO LV YES MT Subsidiary Legislation number 9.13, Freezing YES Orders (Execution in the European Union), published in Legal Notice 397/07 NL Articles 552jj till 552vv of the Dutch Code YES
91 Will enter into force on the date of accession of the Republic of Croatia to the European Union
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of Criminal Procedure. PL Act of Parliament from 7 July 2005, (Journal YES of Law of 2005, Nr 143, item 1203) PT Law n°25/2009, of 5 June 2009 YES RO Law 228/2008, , modifying and completing Law no.302/2004 on international judicial cooperation in criminal law matters SE - Act on Recognition and Execution of YES European Union Freezing Decisions (2005:500) - Ordinance on the Recognition and Execution of European Union Freezing Decisions (2005:501) SI Act on International Co-operation in Criminal YES Matters between the Member States of the European Union (Official Gazette No. 102/2007) SK Act on Execution of Freezing Orders, adopted YES by the National Council of the Slovak Republic on December 13, 2005 UK Partial transposition YES Sections 10 to 12 and 20 to 25 of the Crime (International Co-operation) Act 2003 (CICA) Secondary legislation has not been adopted yet
1.9.2. Recent implementations of the Framework Decision 2003/577/JHA A 2008 report from the Commission based on Article 14 of the Council Framework Decision 2003/577/JHA of 22 July 2003 on the execution in the European Union of orders freezing property or evidence concluded that the Member states had been slow in transposing Framework decision 2003/577/JHA92. Its enforcement has been even slower as will be discussed in the next chapters.
92 Report from the Commission based on Article 14 of the Council Framework Decision 2003/577/JHA of 22 July 2003 on the execution in the European Union of orders freezing property or evidence (COM(2008) 885 final), 22 December 2008. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52008DC0885:EN:NOT
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The Commission noted then that only 19 Member states had implemented the Framework Decision. It also noted that the implementation measures contained variations.
As shown in the table above almost all Member States have now transposed the Framework Decision.
This is in line with the Commission impact assessment of 12 March, 2012 accompanying the proposal for a directive. It stated that four Member States had still not transposed the text. These were Greece, Italy, Luxembourg and the UK93.
Estonia’s Criminal Procedure Code (“CCP”) was amended in 2008 in order to better implement the Frame Work Decision. A new Section 508 of Division 9 of the CCP related to freezing orders in the EU. Further, amendments are in preparation and should be adopted in 2014.
In Luxembourg, bill n°6250 on the application of the principle of mutual recognition of orders freezing property or evidence, supposed to transpose the council framework decision 2003/577/JHA into Luxembourg law has been submitted to the Parliament on 14 February, 2011. It has not been adopted because the “Conseil d’Etat” estimated that the new provision would not be compatible with those of the law of 8 August 2000 on international mutual assistance in criminal matter, modified on 27 October 2010.
After this objection on 15 July 2011, no other text has been submitted to the Parliament, and bill n°6250 has not been modified.
In Greece, a proposal was to be presented to the Parliament in March 2013.
In Italy, the Framework decision was implemented through a 2008 act which came into force in 2009.
For the United Kingdom, the 2008 European Commission Report on the transposition considered that UK had transposed the Framework decision in 2006. This is contradicted by impact assessment published in 2012. This may be so because the UK regulations do not appear to appropriately implement some sections of the Framework Decision.
93 SWD(2012) 31 final.
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Those elements that relate to freezing evidence were fully implemented by sections 10 to 12 and 20 to 25 of the Crime (International Co-operation) Act 2003 (CICA). In particular, these provisions deal with domestic freezing orders and overseas freezing orders for protecting evidence pending its transfer to the UK or to the EU member state (see sections 10(2) and 20(2)). Those elements that in the Framework Decision relate to freezing property have not been implemented.
Further, UK has not implemented the freezing of property provisions in respect of outgoing orders because it has concerns about whether restraint orders made under the Proceeds of Crime Act 2002 are capable of fitting into the definition of a freezing order in the Frame Work Decision, which requires property that is the proceeds or instrumentalities of an offence to be frozen rather than realisable property (which is the definition for a Proceeds of Crime Act 2002 (POCA) restraint order and which captures all property including legitimately obtained property).
In Perry and ors. V. Serious Organized Crime Agency94, the UK Supreme Court concluded that the POCA gave no powers to impose property freezing orders or civil recovery orders over property outside the UK.
1.9.3. Scope of implementation In some Member States, scope of the legislation adopted may be narrower than the scope of the Framework Decision.
In Germany the text adopted only concerns incoming requests, not outgoing ones. Obviously, the specificity only has consequences for German requests to other Member States. However, a new legislation may be adopted in Germany to determine the channels and forms to be used for outgoing requests.
In Spain, for example, the law excludes from its scope personal precautionary measures such as the transfer of detainees as well as precautionary measures under civil procedure. Act 18/2006 also excludes any protective measures under penal procedure which aims to ensure the effectiveness of a fine or the payment of the legal expenses.
94 Perry and ors. V. Serious Organised Crime Agency [2012] UKSC 35.
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The Act 18/2006 specifically creates a new notion of seizure, which definition is different from the national notion of seizure95.
In Sweden, a freezing order which is to be executed in Sweden must, on the whole, be executed in accordance with the provisions which apply for execution in Sweden of equivalent national decisions.
This is illustrated in a judgment from the Scania and Blekinge96 Court of Appeal, where a foreign request for seizure and transfer to the requesting State was not granted. The reasons for the request made by the Danish police was that confiscation was needed as a security for compensation to the State and the Plaintiff in the Danish criminal case. There is no possibility under Swedish law to declare property confiscated under such circumstances. Although the request was based on the International Legal Assistance in Criminal Matters Act (2000:562), the court clearly stated that the decision would be the same under the Act on Recognition and Execution of European Union Freezing Decisions (2005:500).
In the United Kingdom, a distinction stands between freezing evidence and freezing property. Provisions of the Framework Decision relating to freezing evidence have been partially transposed by the Crime (International Co-operation) Act 2003 (CICA) but elements relating to freezing property have not been transposed. A section in the CICA 2003 relates to freezing property in the context of terrorism finance, but has not entered into force yet. For all other crime, section 96 of the Serious Organised Crime and Police Act 2005 (SOCPA) deals with the freezing of property. However, secondary legislation required by this section has not been adopted, therefore this measure is not implemented yet.
All requests to preserve property, which are not related to terrorism, are dealt with using the UK’s processes for mutual legal assistance as set out in the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 (ERO) and the Criminal Justice (International Co-operation) Act 1990 (Enforcement of Overseas Forfeiture Orders) Order 2005 (EFO) and dual criminality is required to give effect to such requests.
95 Seizure in Spanish law refers to a measure affecting to the accused goods sufficient to cover its civil liability., whereas for the purpose of the Framework Decision it includes a wider range of measures (include a wide range of measures to seize the corpus delicti, such as confiscation, seizure, collection or deposit in court.
96 RH 2011:58, accessed at https://lagen.nu/dom/rh/2011:58.
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1.9.4. Suggestions for improvements for Framework Decision 2003/577/JHA The main conclusion from the interviews conducted with Member States authorities is that Framework Decision 2003/577/JHA is seldom used even in Member States that have implemented it.
This trend had already been underlined in 2008 in the Communication from the Commission to the European Parliament and the Council - Proceeds of organised crime: ensuring that "crime does not pay"97. In particular the Communication mentioned that the certificate to request the execution of freezing orders was rather difficult to complete and that it did not contain the necessary fields. Hence, judicial authorities tend to use the form relating to mutual assistance rather than the specific forms created for freezing orders. This is confirmed by the Member States authorities interviewed for this Study who also mentioned that the scope of mutual assistance made it also the preferred avenue.
In some Member States, the mechanism is very rarely used because mutual assistance is faster, more practicable and more efficient.
Other international legal instruments, applicable in specific areas are also preferred (for e.g. the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism Warsaw, 5 May 2005).
Finally, the Framework decision has not been implemented, or has only been partially implemented in some Member States, which constitute an obstacle for it to be considered a “common instrument”.
1.9.5. Improvements relating to translation Member States noted that one of the impediment to the use of the tools was that the Requesting State had to organize translation in one the languages accepted by the Receiving State. This takes time and resources especially when such orders often require prompt actions. Some institutions suggested amending the freezing certificate to make the fields easier to complete without the need for translation including closed questions that can be answers by YES or NO and placing it as a smart form online a secure website
97 COM/2008/0766 final
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online (possibly through Eurojust) so that it can be completed in any language with only specific inputs relevant to the case to be manually translated and key words automatically translated.
1.9.6. Improvements relating to seizures for purpose of compensation of victims In some Member States such as Czech Republic, difficulties have been identified relating to seizures for the purpose of the compensation of victim.
Under Czech law the victim can ask for compensation during criminal proceedings (and not only in a civil proceeding). Hence, a refusal to assist may be based on the choice of instrument used. In many Member States, enforcement will be denied because victim compensation should come under processes based on Council Regulation (EC) 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters98 for the execution of the part of the criminal judgement relating to compensation of the victim and not under mutual recognition of freezing and confiscation orders based on criminal proceedings. It has been suggested that more flexibility should be permitted so as to ensure that formalism does not hinder justice.
It has to be underlined that the possibility for the victim to ask for compensation during criminal proceedings is also available in other Member States such as France. However, even between two Member States both sharing this option, difficulties might arise, as one of the Member State may consider that cooperation in this area does not belong to cooperation in criminal matters.
1.9.7. Improvements relating to seizures for purpose of enforcement bodies The main improvements needed are: a need for accessible information; a better coordination and communication between the competent authorities; and specialized and practical training of the competent authorities.
A need for regularly updated information has been identified during interviews and specifically a database containing the following information: Member States which have implemented the Framework Decision and scope of the implementation, if narrower than the Framework Decision;
98 O.J.: L12 of 16.1.2001 p.1
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Detailed contacts of the competent authorities in charge of the execution of the request; Same executing bodies for national and cross border cases; and Languages accepted by the executing States.
As mentioned above, Member States tend to use other instruments which are considered as easier to use. Therefore, an accessible database containing all relevant information is required, especially when not all the Member have implemented the Framework Decision, and some of them have implemented the text partially.
As no central authorities have been created, the requiring State will have to determine which authority is competent in the executing State. This can create confusion and postpone the request.
Furthermore, for a better knowledge of the instruments, specialized and practical training (e.g. simulations in which the drafting of documents is required), aimed at magistrates in charge of the execution of the freezing orders is suggested99. It also have been suggested that the same competent bodies shall handle freezing requests regardless if the case is purely national or coming from another Member State.
A more efficient cooperation between the Member States, even prior to the sending of a letter of request, a recourse to formal organisations and true legal harmonization is sometimes recommended100.
Finally, a regular evaluation of the execution of freezing and confiscation orders is recommended to assess the efficiency of the method used by the competent bodies and potential improvements.
1.9.8. Improvements relating to enquiry powers and sharing of information It has been suggested that freezing or confiscation orders regarding specific persons or assets could be registered in a data file on search of persons and assets.
99 suggestions of the French PIAC, French national report.
100 “Per contra” Inspector Álvaro RICO GONZÁLEZ-NOVO, from Assets Recovery Office and International Relationships from Fiscal and Economic Crime Unit Money Laundering Squad, Spanish national report, Hungarian national report.
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Furthermore, it has also been suggested that a freezing or confiscation order could allow the Executing State to expand its investigations when in the course of executing a freezing order for specific assets, more substantial assets are discovered101.
1.9.9. Improvements relating to interim measures As already mentioned, the procedure may appear as relatively slow, compared to the speed of criminal transactions.
One of the proposals to prevent the failure of cross-border freezing procedures is to use the power of the “financial Intelligence Unit (FIUs) to postpone suspicious transactions until mutual recognition requests are enforced. The efficiency of such a solution could however be hindered by the varying national postponing deadlines102. Those deadlines could be harmonized for this specific purpose.
1.9.10. Closer harmonisation? In many interviews, the lack of harmonisation has been mentioned as a major difficulty when referring to the efficiency of the Framework Decision 2003/577.
Even when considering only Member States who have implemented the Framework Decision, the level of implementation is different from one Member State to another. As mentioned above, in some situations, the request from a Member State is considered by another as beyond the scope of the Framework Decision. As an example, in some Member States, a freezing order may concern a person, whereas in other Member States it may also concern property.
Furthermore, the need for harmonized safeguards has been mentioned, notably for third party rights and optimal assets management. All these issues are addressed in the proposed Directive.
Summary
Almost all Member States now have implementing regulations that pertain to Framework
101 suggestions of the French PIAC, French national report.
102 HU National report
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Decision 2003/577/JHA. However, some of these are recent. Consequently, Framework Decision has up to now seldom been used. Other reasons exist for the lack of use of the Framework Decision. First, many national regulations limit the scope of enforcement and in some cases only partial implementation exists. Second, the grounds for refusal remain relatively broad, thereby discouraging requests. Third, the certificate supporting the request appears incomplete and unnecessarily complicated. Fourth, mutual assistance is generally preferred as a means of obtaining effective cooperation.
The suggestions made to improve the effectiveness of Framework Decision 2003/577/JHA are: Simplify the certificate supporting the request Ensure that freezing orders do not undermine the rights for victims to be compensated Increase the resources and training of enforcement agencies Increase resources for the management of assets Increase the use of new technologies to facilitate direct contacts between authorities Limit the grounds for refusal by increasing the information provided on the respect of fundamental rights Time-limit executions Allow for the executing agencies to expand its investigations where the targeted assets to be frozen are unavailable. Allow for the freezing or third party assets under certain circumstances whilst allowing clear rights to appeal within reasonable delays Allow for the freezing of assets that are connected to a person rather than assets that belong to a person.
1.10. Transposition status of Framework Decision 2006/783/JHA Framework Decision 2006/783/JHA creates for confiscation orders a system identical to the system created by Framework decision 2003/577 for freezing orders. The issuing Member State sends a request for confiscation and a certificate translated to the executing Member State. As with freezing orders, no central authorities have been created. The executing State is the State where the person concerned has his/her residence or owns assets.
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This framework decision has not been transposed in all Member States.
1.10.1. Transposition in the Member States Member State Transposition of Framework Decision Entry into 2006/783/JHA force AT Federal Law on judicial cooperation in YES criminal matters - Federal Law Gazette I No. 36/2004 BE 26 November 2011 law – amending the 05 YES August 2006 law on the application of the mutual recognition principle regarding penal decisions between member States of the EU BG Not transposed NO CY Prevention and Suppression of Money YES Laundering and Terrorist Financing Amendment Act of 2010 58 (I)/2010 CZ Act No. 457/2008 Coll, entered into force YES on the 1er January 2009 DE Execution Act confiscation and YES prejudgement 2009 October the 2nd. DK Act No. 1434/2004 of 22 December 2004 YES on the Execution in the European Union of Certain Criminal Rulings Amended by Restatement Act No. 213 of 22 February 2013 EE Not transposed N/A EL Not transposed N/A ES Organic Act 3/2010, dated 10th March, YES amending the Organic Judiciary Act complementary to Act 4/10103, dated 10th March on the enforcement in the European Union of confiscation court order FI Act 222/2008 on the implementation of the YES
103 http://www.boe.es/boe/dias/2010/03/11/pdfs/BOE-A-2010-4048.pdf
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provisions of legislative nature of the framework decision on the application of the principle of mutual recognition to confiscation orders and on application of the principle of mutual recognition to confiscation orders104 FR Law n° 2010-768 of 9 July 2010 YES HR Act on judicial co-operation in criminal NO105 matters with member states of the European Union, enacted on 9th July 2010 HU Act CLXXX of 2012 on Cooperation in Criminal Matters with the Member States of the European Union IE Not transposed N/A IT Not transposed LT Law No XI-2200 dated 30 June 2012, OG YES106 2012, No 82-4278 LU Not transposed N/A LV YES MT Subsidiary Legislation number 9.15, YES Confiscation Orders Published in Legal Notice 464/10, and amended by Legal Notice 426/12. NL 'Wet wederzijdse erkenning en YES tenuitvoerlegging geldelijke sancties en beslissingen tot confiscatie' PL Act of Parliament from 19 December 2008 YES on changing the Code of Criminal Procedure and several other acts (Journal of Law of 2009, Nr 8, item 39
104 Mixed implementation technique has been used: the Framework decision is directly applicable, unless otherwise specified in Act 222/2008 section. Constitutional Law Committee of the Finnish Parliament has accepted this technique, reaffirming that the traditional transposing technique shall remain the primary form of implementation
105 Will enter in force on the date of the accession of the Republic of Croatia to the European Union
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PT Law n.º 88/2009, 31st of August YES RO Law 302/3004 on international judicial YES cooperation in criminal law matters SE Act (2011:423) on Recognition and YES Execution of Confiscation Orders in the European Union and the Ordinance on Recognition and Execution of Confiscation Orders within the European Union (2011:578) SI Act on International Co-operation in YES Criminal Matters between the Member States of the European Union, Official Gazette No 102/2007 SK Not transposed UK Not transposed
1.10.2. Level of implementation In 2010, the European Commission published a report on the transposition of Framework Decision 2006/783/JHA on the application of the principle of mutual recognition to confiscation orders107. In it, the Commission notes that only thirteen Member States had notified it of the national regulations implementing the Framework Decision.
The impact assessment conducted by the European Commission in 2012108 concludes that the situation had only improved marginally as of 2011 and that ten Member States still needed to implement fully the Framework Decision. These are Belgium, Ireland, Greece, Italy, Lithuania, Luxembourg, Malta, Slovenia, Sweden, and the United Kingdom109. The interviews conducted during the Study with Member States’ authorities also showed that Bulgaria, Slovakia and Estonia had not implemented the Framework Decision.
In some of those Member States, proposals have been adopted or are still under examination. This is the case in Luxembourg, where a bill n°6250 on the application of the
107 Report from the Commission to the European Parliament and the Council based on Article 22 of the Council Framework Decision 2006/783/JHA of 6 October 2006 on the application of the principle of mutual recognition to confiscation orders (COM(2010) 428. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52010DC0428:EN:NOT
108 SWD(2012) 31 final
109 See table 5.
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principle of mutual recognition of orders freezing property or evidence, supposed to transpose the at least the first of the Council Framework Decisions into Luxembourg law, was submitted to the Parliament on 14 February 2011.
However, no further progress has been achieved since the objection of the "Conseil d'Etat' on 15 July 2011 estimating that these new provisions would not be compatible with those of the law of 8 August 2000 concerning international criminal matters.
In Slovakia, an Act on Execution of Freezing Order transposing Framework Decision 2006/783/JHA was prepared by the Ministry of Justice of the Slovak Republic (hereinafter referred to as the "Ministry"), but this has not been submitted to Parliament yet.
Belgium adopted a new law in 2011110 which aims at fully implementing Framework Decision 2006/783/JHA. Lithuania111 and Malta112 followed suit in 2012.
This Study notes that the situation has changed for some Member States whilst others have started the process of or contemplated implementation.
In Greece, a draft law implementing Framework Decision 2006/783 was presented in March 2013 to the Minister of Justice. This is part of a package that seeks to implement the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (CETS no 198) and allow mutual recognition of freezing and confiscation orders. It also introduces both guarantees for the right of third parties and a structure for the management of the frozen assets.
In Ireland, the Framework Decision has not been implemented. However, a Criminal Justice (Miscellaneous Provisions) is planned for the new future. Mutual recognition of orders is only possible under Irish law in relation to criminal proceedings.
It appears that contrary to previous conclusions, the Framework Decision had not been implemented in Estonia. The recognition of confiscation orders continues to be based on general rules on cross-border cooperation and mutual legal assistance. A draft law implementing the Framework Decision has been prepared and should be submitted to the
110 26 November 2011
111 Entry into force 1 February 2013.
112 Legislation was adopted on 22 October 2010 and has since been amended to ensure fuller compliance.
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Parliament for adoption in 2013. It is expected that the law shall enter into force at the beginning of 2014.
In Italy, on 20 May 2013 a legislative decree that integrates anti-corruption laws and administrative transparency law, comes into force. It aims at transposing Framework Decision 2006/783/JHA. However, since it has not yet led to practical implementation and it is thus impossible to conclude that it transposes the Framework Decision correctly.
In Sweden, legislation adopted to implement Framework Decision 2006/783/JHA does not concern extended confiscation. However, a proposal is currently under consideration on this question and may come into force on 1 January 2014.
1.10.3. Method of implementation in the Member States In most of the Member States, implementation of the Framework Directive has not replaced the procedure under international treaties, so the requesting authority has a choice between various instruments.
Some Member States copied and pasted the contents of the Framework Decisions into national regulations.
Finland used a mixed technique of implementation. Some provisions of the Framework Decision are directly applicable whilst specific provisions were adopted to reflect others.
In some Member States such as Estonia, the Framework Decision has only been partially transposed. This is also the case in Sweden.
Some Member States have clearly stated in their legislation that the scope of the Framework Decision is limited to criminal cases of confiscation.
1.10.4. Suggestion on improvement for Framework Decision 2006/783/JHA Most of the suggestions mentioned for the Framework Decision 2003/577/JHA also concerns Framework Decision 2006/783/JHA (please refer to title 1.6.3) as the main obstacles relate to procedural issues common to both regulations.
The major obstacle that specially concerns Framework Decision 2006/783 is the fact that confiscation is considered as a penalty in some Member states but not in others.
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Further, many Member States stated that they would refuse execution of a confiscation order when the person has not appeared personally before a court and was not represented by legal counsel (unless the person has been informed personally, or via his representative competent according to national law, or has indicated that he or she does not contest the confiscation order). There is a general reluctance to enforce confiscation orders resulting from trials in absentia.
Some Member States have indicated that they are reluctant to implement a confiscation order where there is a possibility that the underlying confiscation decision might transform into a prison sentence as again this is seen as a second penalty for the same facts and offense.
Most Member States have stated that they would refuse in rem confiscations or non- criminal proceedings based confiscations.
Many Member States declared that they would apply the double incrimination standard in deciding whether to enforce or not a confiscation order.
Finally, some Member States stated that some confiscation measures would not be enforced where the right the presumption of innocence had not applied.
An obstacle has also been underlined when the executing State does not recognize civil confiscation because in their Member state confiscation is considered as a punitive measure113.
This aspect will be analysed in details in Chapter 4.
Summary
Almost all Member States now have implementing regulations that pertain to Framework Decision 2006/783/JHA. However, some of these are recent. This may explain the little use made of Framework Decision 2006/783/JHA Other reasons exist for the lack of use of the Framework Decision. First, many national
113 HU national report
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regulations limit the scope of enforcement and in some cases only partial implementation exists. Second, the grounds for refusal remain relatively broad, thereby discouraging requests. Third, the certificate supporting the request appears incomplete and unnecessarily complicated.
The suggestions made by those authorities interviews hereunder in order to improve the effectiveness of Framework Decision 2006/783/JHA are similar to those identified in respect to Framework Decision 2003/577/JHA: Simplify the certificate supporting the request Ensure that confiscation orders do not undermine the rights for victims to be compensated or for bona fide third parties to make a claim. Increase the resources and training of enforcement agencies Increase resources for the management of assets Increase the use of new technologies to facilitate direct contacts between authorities Limit the grounds for refusal by increasing the information provided on the respect of fundamental rights Identify the category of confiscation and provide the information on fundamental rights attached to such category Time-limit executions Allow for the executing agencies to expand their investigations where the targeted assets to be frozen are unavailable. Allow for the confiscation order to become EU wide and extend to all assets connected to a person in specific circumstances and in particular if confiscation is conviction based.
1.11. Implementation of Article 54 of the 2003 United Nations Convention on Corruption The United Nations Convention against Corruption of 2003114 has three main purposes: to promote and strengthen measures to prevent and combat corruption more efficiently and effectively,
114 United Nations Convention against Corruption, adopted by UN General Assembly Resolution 58/4 of 31 October 2003, opened for signature on 9 December 2003, entered into force on 14 December 2005. As of 1 June 2013 it has been ratified by all States covered by this Study except the Czech Republic and Germany.
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to promote, facilitate and support international cooperation and technical assistance, to promote integrity, accountability and proper management of public affairs and public property.
The European Community approved this convention through Council Decision 2008/201/EC115. The Convention is binding on the European Community, and lately the European Union116.
Article 54 of the convention provides for recovery of property through international cooperation in confiscation. This article provides that the parties shall enable their competent authorities to give effect to order from another party:
a freezing or seizing order issued by a court or competent authority of a requesting State party; a confiscation order issued by another State party Court.
They shall also enable their competent authorities to order confiscation, seizure or freezing of property of foreign origin, upon a request from another party that provides a reasonable basis for the requested Party to believe that there are sufficient grounds for such decision, and that the property would eventually be subject to an order of confiscation.
The travaux préparatoires indicates that a confiscation order in paragraph 1(a) requiring the parties to enable their authorities to give effect to a confiscation order issued by another party’s court may be interpreted broadly (i.e including monetary confiscation judgement), but did not cover orders issued by a court that does not have criminal jurisdiction.
The convention also states that the Parties shall also consider taking such measures:
115 Council Decision 2008/201/EC of 25 September 2008 on the conclusion, on behalf of the European Community, of the United Nations Convention against Corruption [Official Journal L 287 of 29.10.2008].
116 See Jan Wouters, Cedric Ryngaert and Ann Sofie Cloots, The Fight Against Corruption in International Law, Working Paper N°94, July 2012, Leuven Centre for Global Governance Studies, available at: http://ghum.kuleuven.be/ggs/publications/working_papers/new_series/wp91-100/wp94-jwouters- cryngaert-acloots.pdf
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to allow confiscation of such property without a criminal conviction in cases in which the offender cannot be prosecuted by reason of death, flight, absence or in other appropriate cases; to permit its competent authorities to preserve property for confiscation, for example on the basis of an arrest occurred on another State party having a link with the acquisition of such property.
Therefore, although this convention mentions execution of non-conviction based orders, it is a soft obligation as Parties are only required to “consider”.
Member State Text implementing Article 54 of the 2003 Entry into United Nations Convention on Corruption force
AT Ratification on 11 January 2003 YES117
BE 1st September 2006 Law YES
BG Ratification on 20 September 2006 YES
CY Ratification on 23 February 2009 YES
CZ No ratification yet118
DE No ratification yet
DK Ratification on 26 December 2006 YES119
EE Accession on 12 April 2010 YES
EL Ratification on 17 September 2008 YES
117 No specific regulation has been adopted
118 As noted by the Czech authorities, Czech law already complies with Article 54.
119 Entry into force 25th January 2007. No specific regulation has been adopted.
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Ratification on 19 June 2006 ES Ratification on 19 June 2006 YES120
FI Accession on 20 June 2006 YES121
FR Ratification by law n° 2005-743 of 4 July 2005 YES Ratification on 4 February 2005 YES122 HR
HU Act CXXXIV of 2005 YES123 Ratification on 19 April 2005
IE Mutual Assistance Act 2008 (Section 4) Order 2012, adopted on 21 June 2012 YES
IT Ratification on 5 October 2009 YES
LT Ratification on 21 December 2006 YES
LU Law of the 1st August 2007 YES Modified by Law of 13 February 2011 Ratification on 4 January 2006 LV Ratification on 4 January 2006 YES124
MT Ratification on 11 April 2008 YES
NL Accession on 31 October 2006 YES
120 Entry into force 19th July 2006
121 Entry into force 2nd august 2005, previously to accession, as Finland considered that this act already fulfilled the obligations set in Article 54
122 Entry into force 26th February 2005
124 Entry into force 3rd February 2006
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PL Ratification on 15 September 2006 YES
PT Ratification on 28 September 2007 YES
Ratification by Law of 15 September 2004 YES RO
SE Ratification on 25 September 2007 YES125
SI Accession on 1 April 2008 YES
SK Ratification on 25 April 2006 YES126
UK Ratification on 9 February 2006 YES
In some Member States, implementation of the Convention is still pending.
However, some Member States conformed to article 54 even if the Convention has not been ratified. That is the case for Czech Republic.
In Finland and Sweden127 no measure was taken to implement Article 54 because the existing legislation already conformed.
In some ratifying Member States, Denmark and Lithuanian for example, are Article 54 is deemed directly enforceable without the need for implementing legislation.
In other ratifying Parties, a specific legislative act was adopted to implement it. That is the case for France, Luxembourg, Romania and Slovenia.
In France, after the ratification of the convention, a law was adopted to introduce regulations regarding the execution of confiscation orders issued by foreign judicial authorities (law n°2010-768 of 9 July 2010).
125 Entry into force 25 October 2007.
126 Entry into force 1 July 2006.
127 Government Communication (Ds.) 2005:38, p. 11.
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In Luxembourg, articles of the Penal Code and the Code of Criminal Procedure were modified.
In Romania, article 54 was implemented by the law no. 302/2004 on international judicial cooperation in criminal law matters.
1.12. Implementation of Article 13 of the 2000 United Nations Convention on transnational organised crime Article 13 of the Convention128 concerns international cooperation for purpose of cooperation and provides that the State parties have to:
execute request for confiscation over an offence covered by the Convention received from another State Party by either giving effect to it (option §1.a) or submit it to its competent authorities to obtain a confiscation order and if such an order is granted, give effect to it (option §1.b); following such a request, take measure to identity, trace and freeze or seize proceeds of crime, property or equipment or other instrumentalities referred to in Article 12, for the confiscation to be ordered by the requesting State Party or the requesting State Party.
Therefore, the State Parties do not have to give direct effect to an order issued by another State Party, they can require that a mirror confiscation order be issued by their own authorities, and if such order is not granted, refuse to execute the requesting State Party’s order. It is a type of confiscation order ex equatur.
The Convention states that the requested State Party shall take decisions or actions in accordance with the provisions of its domestic law and procedural rules, or any bilateral or multilateral treaty, agreement, or arrangement to which it may be bound in relation to the requesting State Party (§4) (such rules shall be communicated to the Secretary-General of the United Nations §5).
Member Text implementing Article 13 of the Entry into Paragraph 1 :
128 United Nations Convention against Transnational Organized Crime, adopted by UN General Assembly Resolution 55/25 of 15 November 2000, opened for signature on 12 December 2000 and entered into force on 29 September 2003. As of 1 June 2013, it has been ratified by all States covered by this study except the Czech Republic.
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State 2000 United Nations convention on force Option a or transnational organised crime option b
AT Ratified on 23 September 2004 N/A
BE Ratification on 11 August 2004 YES129
BG Ratification on 5 December 2001 YES
CY Ratification on 22 April 2003 YES Option b
CZ Not ratified130 N/A N/A
DE Ratified 14 June 2006 YES
DK Ratified on 30 September 2003 YES131
EE Ratification on 10 February 2003
EL Ratification on 11 January 2011
ES Ratification on 21 February 2002 YES132
FI Ratification on 10 February 2004 YES
FR Ratification 6 August 2002 YES133 Option a134
129 Entry into force on the 24th June 2004
130 It has been considered that the provisions of the Convention were already in force
131 Entry into force on the 31th October 2003
132 Entry into force 29th September 2003
133 Entry into force, Decree 2003-875 of the 8th September 2003
134 Under specific conditions, provided by article 713-36 to 713-41 CPP, see hereunder
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HR Ratification on 24 January 2003 YES
HU Ratification on 22 December 2006 YES
IE Ratification on 17 June 2010 YES Option a135
IT Ratification on 26 August 2006 YES
LT Ratification on 9 May 2002 YES
LU Law of 18 December 2007 YES
LV Ratification on 7 December 2001 YES
MT Ratification on 24 September 2003 YES
NL Ratification on 26 May 2004 YES
PL Ratification on 12 November 2001 YES
PT Ratification on 10 May 2004 YES
Ratification on 4 December 2002 YES RO
SE Ratification on 30 April 2004 YES136 Option a
SI Ratification on 21 May 2004 YES
SK Ratified 3 December 2003 YES
135 Under specific conditions, provided Criminal Justice (Mutual Assistance) Act 2008
136 Entry into force 30th May 2004
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UK Ratification on 9 February 2006 YES
Three situations can be identified relating to the transposition of article 13 in the Member States : the Convention has not been ratified; the Convention has been ratified, and no specific text has been adopted; the Convention has been ratified, and a specific text has been adopted.
In some Member States, the Convention has been ratified and a specific text has then been adopted to introduce Article 13 provisions in national law.
That is the case in Cyprus, where the Prevention and Suppression of Money Laundering and Terrorist Financing Laws of 2007 and 2010 specifically refers to the UN Convention against Transnational Crime.
In France, law n°2010-768 of 9 July 2010 introduces article 713-36 to 713-40 in the Criminal Procedural Code (CPP). The procedure provided by those articles applies when no international Convention provides otherwise. Therefore, those articles cover confiscation requests under the Convention, since those articles are not in contradiction with article 13 or any other provision of the 2000 UN Convention. Those articles provide for several conditions for the foreign confiscation order to be executed in France. Indeed, the Convention specifically provides that the State Parties can apply their internal laws, which implies that they have the possibility to add conditions.
This mechanism is also used in Hungary, where the Convention has only been ratified, and is applied according to Act XXXVIII of 1996 on International Legal Assistance in Criminal Matters, which provides that provisions of this Act will apply unless otherwise stipulated by an international treaty.
In some Member States, Article 13 has not been ratified, but it is considered that the current law already in force comply with this article. This is the case in Czech Republic, Germany and Slovakia.
In Ireland, whereas the Convention has been ratified in 2010, transposition of Article 13 was already provided by the Criminal Justice (Mutual Assistance) Act 2008.
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In some Member States, the Convention has only been ratified and no specific text has been adopted to introduce Article 13 in the internal legislation.
This is the case for Lithuania and Poland, where once ratified, a Convention directly applies.
1.13. Implementation of Articles 5 and 7 of the 1988 United Nations Convention on drug trafficking The 1988 Convention137 is an attempt by the UN at adding enforcement tools to the arsenal of measures deployed in the two previous conventions on the same topic138.
Article 5 relates to confiscation whilst Article 7 pertains to mutual assistance.
1.13.1. Implementation of Articles 5 Article 5 of the 1988 United Nations Convention on drug trafficking provides for internal measures that each Party shall adopt measures to:
enable confiscation of proceeds derived from offences mentioned in the Convention, enable its authority to identify, trace, and freeze or seize proceeds, property, instrumentalities or other things mentioned in §1, enable its Courts or competent authorities to order bank, financial or commercial records to be available or seized.
If the proceed has been transformed or converted, then confiscation shall be applied to the property obtained, and if intermingled with other property, confiscation can be ordered on those properties up to the value of the intermingled proceed.
As for onus of proof, paragraph 7 provides that it shall be reversed regarding the unlawful origin of alleged proceeds, in accordance with domestic national provisions.
137 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, signed in Vienna on 20 December 1988 and entered into force on 11 November 1990. To date it has been ratified by all States covered by this Study and binds also the European Union.
138 The Convention on Narcotic Drugs of March 30, 1961 and the Convention on Psychotropic Substances of February 20, 1971 (excluding the 1912 Opium Convention and the Convention for Limiting the Manufacture and Regulating the Distribution of Narcotic Drugs and the Agreement Concerning the Suppression of Opium Smoking if 1931 and the 1946 Convention for the Suppression of the Illicit Traffic in Dangerous Drugs).
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As for cooperation, paragraph 4 of Article 5 provides that each State Party shall, on the request of another Party having jurisdiction over an offence established in accordance with the Convention: submit the request to its competent authority for the purpose of obtaining an order of confiscation and if such order is granted, give effect to it; submit to its competent authorities the foreign order of confiscation with a view to give effect to it.
Therefore, UN Convention on drug trafficking gives the State Parties the same option as the UN Convention on Organised Crime: to give effect to the foreign order or to request of its competent authorities that they issue an order.
The other provisions contained Article 5 are similar to the provision of UN convention on Organised Crime: the requested Party shall take investigation measures; it shall take decisions according to its domestic law, and communicate it to the Secretary-general; each Party shall give special consideration to agreements about contributing the value of the proceeds of trafficking to intergovernmental bodies and/or sharing it with other State parties on a case-to-case basis.
1.13.2. Implementation of Articles 7 Article 7 of the Convention concerns mutual assistance in investigations, prosecutions and judicial proceedings and explicitly provides that no bank secrecy can be opposed to a request for mutual assistance.
Member Ratification of the UN Convention on drug Entry into States trafficking force
AT Ratification on the 11th July 1997 YES
BE Ratification on the 25th October 1995 YES
Ratification on the 24th September 1992 BG
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CY Ratification on the 25th May 1990 YES
CZ Adoption by succession on the 30thdecember 1993
DE Ratification on the 30th November 1993 YES
DK Ratification on the 19th December 1991 YES
EE Accession on the 12th July 2000 YES
ES Ratification on the 13th August 1990 YES
FI Accession on the 15 February 1994 YES
FR Approbation on the 31st December 1991 YES
HR Ratification on the 26th July 1993 YES
HU Ratification on the 15th November 1996 YES
IE Ratification on the 3 September 1996 YES
IT Approbation on the 31st December 1990 YES
LT Accession on the 8th June 1998 YES
LU Ratification on the 29th April 1992 YES
LV Accession on the 24 February 1994 YES
MT Accession on the 28 February 1996 YES
NL Approbation on the 8 September 1993 YES
PL Ratification of the 26th May 1994 YES Ratification on the 3rd December 1991 PT
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RO Accession of the 21th January 1993 YES
SK Succession on the 28th May 1993 YES
SI Succession on the 6 July 1992 YES
SE Accession on the 22 July 1991 YES
UK Ratification on the 28th June 1991 YES
All the Member States and Croatia have ratified the UN convention on drug trafficking. Two situations can however be distinguished.
- The Convention has been ratified and an additional text has been adopted to transpose it in national law
In Austria, article 5 of the UN Convention has been transposed in the Austrian Drug Law, section 34, which regulates the recovery of drugs subject to an act punishable by law. However, this section seems to concern recovery of the proceeds only.
In Belgium Article 43 quarter of the Penal Code concerns confiscation of proceeds of drug trafficking notably, and has been introduced by a law of 19 December 2002.
In Germany, the Execution Act on the UN Convention on drug trafficking adopted on 2 August 1993 modified the Criminal Code, the Criminal Procedure Code, the Narcotic Act, the Act on international Legal Assistance in Criminal Matter and the Federal Maritime Responsibilities Act which regulates the cooperation with other States in the prosecution of crimes and misdemeanors and relates to international obligations and powers derived in particular from the Convention of the United Nations.
In Luxembourg, a first law has been adopted on 17 March 1992, modified on the 27th October 2010.
In Finland, specific provisions regarding drug offences have been adopted. Prior to this, extended confiscation of the proceeds of crime was not possible. It is now a reality.
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In Romania, a general law has been adopted for the implementation of confiscation and judicial assistance.
- The Convention has been ratified and no additional text has been adopted In some Member States, the text has been ratified and directly applies in the national legal system.
This is the case in Denmark for example.
Summary
The European Union has approved the United Nations Convention against Corruption. All Member States have ratified it except the Czech Republic and Germany.
All Member States have ratified the United Nations on Transnational Organized Crime except the Czech Republic.
All Member States have adopted or ratified the United Nations Convention on Drug Trafficking.
All Member States have taken steps to ensure that the provisions each on international cooperation in confiscation are effective.
1.14. General impact of 12, March 2012 Directive Proposal This Study started in November of 2012. Thus, the Draft Directive that was assessed for its impact on mutual recognition at national levels was the Draft Directive of 12 March 2012 and not the December 2012 Council General Approach. An analysis of the General Approach is made where it was possible to obtain information from the different stakeholders. Although, it is clear that the 12 March Directive Proposal only aims at harmonizing freeing and confiscation regulations in Member States, it was deemed useful to determine the impact of the 12 March 2012 Directive Proposal on mutual recognition so as to enable a better understanding of what further regulatory content might be needed in this field.
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With respect to the Draft Directive, Eurojust stated in a 2012 opinion that: “it welcomes the attempt made in the Proposal to lay down common minimum rules applicable in all Member States in a number of key areas, such as direct confiscation, extended powers of confiscation, third party confiscation, precautionary freezing and non-conviction based confiscation, as further harmonisation of freezing and confiscation regimes can facilitate judicial cooperation and mutual recognition”139.
Eurojust’s thus welcomed the Draft Directive and considers it an important instrument for effective justice. It also pointed to two important elements of the Draft Directive that should be perhaps altered. First, it stresses that asset recovery should be a tool aimed at “fighting all kinds of serious crime” and that a result refusal to enforce based on Article 8(2)(g) of Framework Decision 2006/783/JHA hampers the effectiveness of mutual recognition. Second it suggests that, in order to ensure that Article 5 of the Draft Directive is effective, broader wording should be used rather than identifying very specific situations140. On the first point, it should be underlined that according to the EU Treaty, the Commission could not propose provisions on confiscation that could apply to all criminal offences. Article 83 TFEU allows the harmonisation of the definitions and criminal sanctions only for a number of particularly serious offences having a cross-border dimension ("the Eurocrimes"). There is no legal basis that could cover the other offences.
Eurojust’s suggestions are captured in the table below:
These are presented in the table below together with corresponding measures if any contained in the latest Draft Directive141.
DIRECTIVE EUROJUST’s EUROJUST’S PROPOSAL PROPOSAL EVALUATION
Limited to Practitioners can It would be useful to SCOPE “particularly face difficulties in consider that asset recovery serious crime” applying multi-fold is a tool aimed at fighting
139 Eurojust’s opinion on the proposal of the European Commission for a Directive on the freezing and confiscation of proceeds of crime in the European Union, October 2012, page 11.
140 Eurojust’s opinion on the proposal of the European Commission for a Directive on the freezing and confiscation of proceeds of crime in the European Union, October 2012.
141 Source : EUROJUST’s opinion on the proposal of the European Commission for a Directive on the freezing and confiscation of proceeds of crime in the European Union
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DIRECTIVE EUROJUST’s EUROJUST’S PROPOSAL PROPOSAL EVALUATION listed in Article 83 legal framework all kind of serious crime (1) TFEU (9 categories), the other instruments staying in force for criminal activity falling outside of the scope of the Directive
Extended - The Court - Provides for - Criteria of the powers of requiring greater flexibility, disproportionate property confiscation extended as burden of proof to the lawful income shall (Article 4) conviction shall has been reduced be added has to find it substantially more - convert the two probable that the circumstances in obligations property has been rather than option derived from criminal activity - amending Article 8 (2) g of rather than from the 2006 FD considering other activities “extended powers of (whereas within confiscation” as a ground the framework of for non-recognition or non- the 2005 FD it had execution as the scope of to be fully mutual recognition shall be convinced). restricted (recommendation proposed initially by the impact assessment and endorsed by EUROJUST)
Third party Binding rules have - Any asset held by heir or confiscation been introduced close friends should be relating to third concerned by this article if Article 6 party the transferee cannot confiscation. explain its origin - the concept of 1. Confiscation of “controlling influence” shall third party assets be introduced in the is possible when : Directive - Property is - this concept could be subject to obligatory rather than restitution optional - The defendant has received the asset for a lower price than market value and that a reasonable person in his position would suspect to
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DIRECTIVE EUROJUST’s EUROJUST’S PROPOSAL PROPOSAL EVALUATION be derived from crime or, - to be transferred in order to circumvent confiscation
2.Confiscation is possible when : - non conviction based confiscation is unlikely to succeed; - the assets have been already transferred, in particular where the person is already suspected or convicted Precautionary Property in Precautionary freezing shall freezing danger of being be made possible for the (Article 7) dissipated, hidden purpose of property or transferred out belonging to victims of the jurisdiction in view of later confiscation shall be frozen - This measure shall be compulsory for Member States - freezing is possible in urgent situations, if later confiscation can be compromised Management of Intends to Article 10 is Restitution/compensation frozen property facilitate particularly shall be made possible, management of welcomed when the person is found (Article 10) property frozen in not guilty and the good has view of later been sold confiscation, by: - establishing national centralised office or equivalent; - measures optimising economic value of such property;
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DIRECTIVE EUROJUST’s EUROJUST’S PROPOSAL PROPOSAL EVALUATION
Statistics Obligation for Article 11 is Collect shall be limited to Member States to particularly key data (Article 11) collect statistics welcomed on freezing, confiscation and re-use of criminal assets
Article 5 provides Differences in A broader wording and the for NCB when : legislation makes introduction of the Non conviction - the suspect has it difficult to principle of mutual based died; detail the recognition to enable confiscation - is permanently conditions of Member State, despite ill; implementation of those differences, to (Article 5) - his flight or this measure recognize other Member illness prevents States’ decisions. effective prosecution within a reasonable time and poses the risk that it could be barred by statutory limitations
Most of the Member States evaluate positively the Draft Directive. This is the case for Sweden, Finland, Poland, Slovakia, Romania and Greece where the Ministry of Justice considers it satisfying in regards to the objective of fighting against organized crime142.
Some interviewees pointed out that in the Draft Directive, freezing and confiscation are defined differently. Freezing is defined by its consequence or result. Confiscation is defined in a more complete way both by its nature, its origin and its consequence. Unless there is a purpose to the difference, it might be relevant to use the same methods to define two legal processes.
The Czech Republic, Latvia, Lithuania and Croatia support the proposal too and judge that no substantial changes will be necessary in their own legislation to enforce it.
142 [http://www.lawnet.gr/news/sto-sumboulio-ypourgon-dikaiosunis-o-yfupourgos-k-karagkounis-27785.html]
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Denmark declared it will not participate in the Draft Directive. The UK appears set to bail out as well.
Moreover, the German Association of Judges criticized the legislative basis of the Directive: confiscation being a “measure” and not a penalty, Article 83 (1) of TFEU which can unify the legislation of the member States on penalties cannot be the basis for a text creating measures.
In Romania, the Directive could be enforced in the national legislation in theory but the issue affects the operative aspects of its implementation.
1.14.1. Changes relating to freezing and confiscation processes
Impacts of the Directive in the national legislation (modifications of national law would be required) 3rd Party’s Non- Member Extended Freezing Confiscation confiscation conviction States confiscation confiscation AT BE BG CY CZ DE DK EE EL ES FI FR HR HU IE IT
LT LU LV
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MT NL PL PT RO SE SI SK UK
1.14.2. Changes relating to freezing process Article 7 of the Draft Directive states that “1. Each Member State shall take the necessary measures to enable it to freeze property in danger of being dissipated, hidden or transferred out of the jurisdiction with a view to possible later confiscation. Such measures shall be ordered by a court. 2. Each Member State shall take the necessary measures to enable its competent authorities to immediately freeze property when there is a high risk of dissipation, hiding or transfer of that property before a court's decision. Such measures shall be confirmed by a court as soon as possible.”
In Austria and Slovakia, this system will require a modification of the national legislation because the seizure is currently ordered by the Austrian public prosecutor and the Slovak prosecutor and police authority. In Sweden the authorities are reluctant to accept the idea of a change as it considers that it is the power of the prosecutor to issue freezing orders and courts are not involved in it.
In Slovenia, the authorities advised that the law may have to be amended if the principle changes and that in principle freezing orders are made by the court and only under exceptional circumstances would a prosecutor or the police be entitled to issue freezing orders.
For the UK, regulations may need to be changed since Article 7(2) provides for the freezing of assets without a court order. Indeed, in the UK this is currently only possible for cash seizures.
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The comments made by the Member States did not take into account the Council General Approach. Under the new text the principle is that Member States choose freely the authority that may be entitled to issue a freezing order and that an appeal be possible before a court against such a decision.
Under the Council General Approach no Member State would have to change their legislation since as outlined in this Study freezing orders are submitted to judicial review in all Member States.
The Directive establishes only minimum rules on the freezing and confiscation of the proceeds of crime. Member States are free to include in their national law, provisions which go further. This is confirmed in the Council General Approach which added in particular: “This Directive sets up minimum rules. It does not prevent Member States from providing more extensive powers in national law, including in relation to its rules on evidence, for example, by providing a reversed burden of proof”143. Some Member States consider that the Draft Directive should not be used for mutual recognition of freezing orders as their legislation would not recognize a decision based on a reversal of the burden of proof.
With respect to the Council General Approach, Member States are worried that the language used may lead to unforeseen consequences in the area of mutual recognition. The General Approach specifically enables non judicial authorities to freeze assets. If national authorities are able to freeze assets without the involvement of a court or judge, most orders will be issued without such recourse as requesting the intervention of a court or judge slows the process and increases costs – it also decreases the likelihood of errors and abuses by authorities as courts and judges are independent and impartial. The result is that freezing orders may be sent to other Member States without the validation by a judicial authority. There may be reticence in enforcing these.
The confusion is enhanced by the fact that the Council General Approach does not purport to change the definition provided under the Framework Decisions. The definition of a freezing order under Framework Decision 2003/577/JHA is: “any measure taken by a competent judicial authority in the issuing State in order provisionally to prevent the destruction, transformation, moving, transfer or disposal of property that could be subject to confiscation or evidence”. Thus, apart from creating two different standards
143 Council of the European Union, 3 December, 2012, CODEC 2887, See Statement (10aa) of the new proposal. At: http://register.consilium.europa.eu/pdf/en/12/st17/st17117.en12.pdf
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within two EU legislative tools that are likely to discriminate between targets of freezing orders that are within one national border (a party to the proceedings, a government directed authority, can freeze assets) and those that go beyond national borders (if enforcement is required in another Member State a court must grant the order), the effect on mutual recognition may be that more orders fail to be enforced because they do not meet the definition set out in Framework Decision 2003/577/JHA.
The above analysis is based on the determination that Council General Approach (of December 2012) does not mention that it would amend in any way Framework Decision 2003/577/JHA. This is confirmed by the legal basis indicated in the General Approach, ie Articles 82(2) and 83 TFEU, which does not include the legal basis for ensuring mutual recognition in criminal matters, ie Article 82(1) TFEU. If however, the Council General Approach did amend Framework Decision 2003/577/JHA the effect would dramatically extend the scope of mutual recognition. As stated before, the Council General Approach would not so much as harmonize as it would force Member States to recognize freezing orders issued by police officers without any judicial control prior to the request for mutual recognition. This point is important and needs to be explained further.
The Council General Approach states: “1. Each Member State shall take the necessary measures to enable it to freeze property (…) with a view to possible later confiscation. Those measures shall include urgent action to be taken when necessary in order to preserve property. Such measures shall be ordered by a competent national authority. 2.If the competent national authority ordering the freezing is not a court or another judicial authority, each Member State shall take the necessary measures to ensure that the measure may be effectively reviewed by a court or another judicial authority. 3. Property in the possession of a third party, as referred to under Article 6 (…), can be subject to freezing measures for the purposes of eventual confiscation in line with this Article”.
This, in appearance, give a lot of leeway to Member States. However, if at one stage of the legislative process, the Council General Approach incorporates language that amends Framework Decision 2003/577/JHA and imposes the Council General Approach’s definitions and in particular Article 7, a police officer in one Country could potentially issue a freezing order valid in 28 Member States without the possibility of intervention by a judicial authority and without any of the Receiving/Executing States’ authorities being able to refuse. The reason is that freezing orders can be taken ex parte in all Member States. Thus, the fact that the Council General Approach mentions that “If the competent Page 107 of 477
national authority ordering the freezing is not a court or another judicial authority, each Member State shall take the necessary measures to ensure that the measure may be effectively reviewed by a court or another judicial authority”, does not constitute a guarantee that freezing orders are not going to be issued lightly. Under this proposed provision, a police constable – if a government should decide that he/she is a competent authority - could issue freezing orders and have them enforced in 28 Member States before a judge lays eyes on it and before the person targeted by the freezing order is made aware of its existence and has a chance to appeal. The risk of abuses and violations of fundamental rights is compounded by the fact that paragraph three of the same Council General Approach allows for the freezing of assets belonging to third parties. Under the current Council General Approach scenario, if applied in a mutual recognition context, if a police officer in Country Y issues an ex parte freezing order to freeze the assets of person B who lives in Country Z, because person B has a connection to person A who is the subject of the main freezing order, then Country Z has to enforce the freezing order against person B. Person B’s assets will be frozen and may have to go before the courts in Country Y to appeal against the freezing order so that it can be lifted in Country Z. Unless Country Y’s laws go even further and state that only the main subject of the freezing order has a right to appeal. This is a possible interpretation of the current Council General Approach. In that case, Person B can only hope that Person A will file an appeal. As stated before, on the matter of freezing orders, the Council General Approach do not so much harmonize as it forces Member States to enforce without an initial judicial control. This is contrary to the spirit of the Draft Directive and achieves the opposite of the stated objectives. The Draft Directive seeks to harmonize in order to facilitate mutual recognition. In its latest version it grants much leeway – thus little harmonization – and if read in the mutual recognition context, enables a “competent national authority” to force mutual recognition upon all Member States, some of which as shown in this Study may have some reservations about enforcing a freezing order emanating from a person who in their own judicial system would under no circumstances have the authority to issue a freezing order.
The original text of the Draft Directive proposed more harmonization, ensuring that, in all Member States, the authority issuing the order was both impartial and independent from the parties to the case, a judicial authority. There is no reason to believe, that today, the limited numbers requests for mutual recognition stems from the participation of judges in the process. Statistics in fact fail to show that there are fewer freezing orders in countries where judges are actively involved in the process. Thus, they should not be taken out of the equation to expedite matters. Judicial authorities are generally considered to be guarantors of due process. Page 108 of 477
1.14.3. Changes relating to confiscation process Article 3 of the Draft Directive deals with the regular confiscation of the illegal assets of a convict, no matter if they are products of the crime, objects used to commit it or their equivalent value.
This regime already applies in every Member States, even if two of them consider that the enforcement of the Draft Directive will necessitate a change in their legislation.
Indeed, Austria considers that it would have to proceed to lexical changes because it distinguishes three processes: confiscation, forfeiture and recovery.
Definitional issues are numerous in this area and for Member States it is important that the Draft Directive provides guidelines on concepts such as “confiscation”, “forfeiture”, “proceeds” and “recovery”. The German Federal Bar considers that the definition of the “proceeds” provided by the Draft Directive is not precise enough. Similarly, it is reported that there would be some benefits in unifying definitions on “freezing”, “seizure” and “sequestration”.
On the nature of the confiscation, some Member States’ authorities have asked that the Draft Directive be clear on the treatment of confiscation when it is a “precautionary” measure and when it is a “penalty”. In particular, some consider that confiscation that can turn into imprisonment by default should be treated differently and in particular should be considered systematically as a penalty and attach enhanced procedural and fundamental rights. This was an issue highlighted by the German Bar Association. For the German Bar Association the imprecision of the terms might be problematic.
Article 9 states that: “Article 9 Determination of the extent of the confiscation and effective execution Each Member State shall take the necessary measures to make it possible to determine the precise extent of the property to be confiscated following a final conviction for a criminal offence or following proceedings as foreseen in Article 5, that has resulted in a decision to confiscate, and to allow further measures to be taken to the extent necessary to effectively execute that decision to confiscate”.
For the German Bar this is problematic and a breach of the proportionality principle. It implies the scope of confiscation is determined by the assets owned by the offender and Page 109 of 477
his/her associates rather than by the seriousness or scope of the offense. It indicates that extended confiscation would become systematic and that non-conviction confiscation would systematically relate to all of the assets of the “potential offender”.
1.14.4. Third party confiscation Article 6 of the Draft Directive deals with the confiscation of assets transferred or acquired by third parties. Several provisions of this article are aimed at protecting third parties acquiring the property in good faith.
This practice does not exist in Poland. In the UK144 and Ireland the regulations are different. For those States, they will have to modify their legislation.
Some Member States do have third party asset confiscation regulation but they are very limited in scope.
In Malta, the legislation will have to be modified because third party confiscation of assets is not available in all situations. Basically, it is only if assets are transferred to a third party during criminal proceedings and provision measures had been taken, that confiscation is possible.
In Austria and Finland, third party asset confiscation requires that the third party had actual knowledge of the criminal origin of the assets.
1.14.5. Extended confiscation Article 4 of the Draft Directive amends Framework Decision 2005/121/JHA, which introduced the into EU law the concept of extended confiscations. It States that: “Article 4 Extended powers of confiscation 1. Each Member State shall adopt the necessary measures to enable it to confiscate, either wholly or in part, property belonging to a person convicted of a criminal offence where, based on specific facts, a court finds it substantially more probable that the property in question has been derived by the convicted person from similar criminal activities than from other activities. 2. Confiscation shall be excluded where the similar criminal activities referred to in paragraph 1
144 PART 5 POCA.
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(a) could not be the subject of criminal proceedings due to prescription under national criminal law; or (b) have already been subject to criminal proceedings which resulted in the final acquittal of the person or in other cases where the ne bis in idem principle applies.”
In many countries no change would be required. In Germany for example, national provisions on extended confiscation exist. Indeed, extended confiscation is possible against the members of an organisation formed for the purpose of repeatedly committing criminal offences. It may cover in principle all the "criminal profits" they make (even if individual acts cannot be ascertained), including assets belonging to them or supporting them.
In Slovakia, this principle would impact national law as under current legislation the application of the extended confiscation, would require that new criminal proceedings be conducted.
Other member States would need to change their legislation to integrate this principle. This is the case in Spain, in Ireland or in Slovenia, but those Member States do not seem opposed to this perspective.
Despite the existence of such a principle in their legislation, Austria and Hungary consider that a modification will be required as their current legislation limits the application of the extended confiscation to the assets of members of criminal organization acquired during such involvement. This limitation does not exist in the proposal which, in addition, implements a “substantial probability” criterion.
1.14.6. Non-Conviction based confiscation The Draft Directive introduces non-conviction based confiscation and third party confiscation. Non-conviction based confiscation is introduced by Article 5 and new to EU law. It addresses cases where there cannot be a criminal conviction, for example because of the death145 or flight of the suspected person.
Article 5 of the Draft Directive provides that: “Article 5 Non-conviction based confiscation
145 The case of death is deleted in the Council General Approach. This is probably aimed at answering questions that were raised about the extinction of liabilities with death, the rights of successors and the right of the State to tax the deceased’s estate.
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Each Member State shall take the necessary measures to enable it to confiscate proceeds and instrumentalities without a criminal conviction, following proceedings which could, if the suspected or accused person had been able to stand trial, have led to a criminal conviction, where: (a) the death or permanent illness of the suspected or accused person prevents any further prosecution; or (b) the illness or flight from prosecution or sentencing of the suspected or accused person prevents effective prosecution within a reasonable time, and poses the serious risk that it could be barred by statutory limitations.”
This possibility of NCB already exists in most of the Member States and some state that they would not need to amend existing legislation in order to transpose. This is the case in Austria or Ireland.
However, in Poland and Hungary the current regulation is more restrictive that the one proposed under the Directive.
In Slovakia the most important change will be in the area of inheritance law since currently upon the death of a person his/her entire estate passes on to his/her successors. This may also impact tax law as the estate will be amputated and tax revenue reduced from that perspective.
In Finland such measures must at one point emanate from a court and the existence of an offence ascertained.
In the member States where the NCBC do not exist, this process will have to be completely created and integrated in the national legislation, which can sometimes present constitutional issues as in Estonia or France.
Belgium, Denmark, Estonia, Spain, Luxembourg, Malta and Netherlands acknowledge that substantial amendments of their legislation are required if a non-conviction based confiscation regulation were adopted. However, many countries already have some form of NCBC system in place. Most agreed that although they may not have “civil confiscation”, there are misdemeanour and administrative law based confiscations which do not involve a conviction. These are technically non-conviction based.
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In the same vein, French authorities interviewed consider that the integration of the NCBC could intervene as a “safety measure” because those already exist in France and do not take into account the guilt of a person.
Many authorities were worried that this provision contained inherent risks for the protection of fundamental rights. They stated that more procedural rules must be defined to ensure that these rights are protected. Sweden in particular highlights the need for effective judicial review.
In the view of persons interviewed the Council General Approach, creates great confusion through (i) the definition that it gives of the word confiscation which relates to “…a final deprivation of property ordered by a court in relation to a criminal offence”, (ii) Statement 12: … “Some Member States have put in place non-conviction based confiscation systems where no link to criminal proceedings is required, such as the civil forfeiture proceedings, or where a more distant link to a criminal case is sufficient in order to start independent confiscation proceedings. Those systems do not fall under the scope of this Directive”, and (iii) Statement 7 which reads: “Member States are free to take confiscation procedures which are linked to a criminal case in front of any court whether criminal, civil or administrative”. This confusion will impact negatively mutual recognition in these areas. Doesn’t a “distant link to criminal proceedings” still fall within the scope of “relation to a criminal offence”. Even the most tenuous relation is a relation. And what if civil confiscation becomes administrative confiscation? Today, issues related to “civil based confiscation” are the main impediments, as noted in the Country Reports, to mutual recognition. The Draft Directive does not resolve this from a procedural law stand-point.
1.14.7. Other changes impacting the Member States
1.14.7.1. National statistics Article 11 of the Draft Directive provides that the Member States have to collect and transmit to the European Commission national statistics of the freezing and confiscating decisions and the value of the assets concerned.
All Member States will have to make legislative changes and invest time and resources in implementing data collection and transmission systems.
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Romania considers this obligation complex because of the decentralization of the process of seizure and forfeiture, which implies different data in each regional district and therefore a difficulty to collect them in a unique format and database.
The same kind of issues concerns Hungary because the collection of criminal data is divided between investigative authorities and the court and each has its own separate system, depending on the time of the procedure.
In Germany, the Federal Bar and the Association of Judges are critical of the Article. The Federal Bar considers that the Article is insufficient to provide useful data. The Association of Judges considers that the resources are not there to deal with such an undertaking.
Some interviewees felt that the statistical directions provided in the Draft Directive were a little confusing. In particular, because 11(g) above does not distinguish between 11(e) and 11(f) the result might be erroneous since the same amounts may be counted twice (freezing first and then confiscation).
Further, with respect to the number of freezing orders to be executed and that of confiscation orders to be executed in another Member State there were some questions on the definition of “to be executed” because Member States may have different interpretations of the expression “to be executed”. Some may consider that “to be executed” refers to policy objectives and may provide important numbers. Others will to the contrary have difficulty identifying, in advance, how many are “to be executed” in a given year as these will depend on the number of cases that will arise and that involve assets possibly located abroad.
Article 11 will generate useful information. Probably more information than is generated today. However, the Council General Approach considerably limits the scope of Article 11, doing away altogether with any notion of mutual recognition146. Thus, if this is adopted, no useful statistics will be generated for the purpose of this Study. It is recommended that any provision aimed at providing statistics be reviewed by economists or statisticians before it is finalized. The suggestion is in fact that Article 11 be replaced partly by the possibility for the European Commission to act by means of a
146 Council of the European Union, December 3, 2012, 17117/12.
Available at: http://register.consilium.europa.eu/pdf/en/12/st17/st17117.en12.pdf
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Delegated Act on the question of statistics. This would enable the European Commission to define the method, content and frequency used in the collection of data and in particular facilitate an evolution towards online collection as detailed above.
1.14.7.2. Recognition of decisions The harmonization of the legal basis of the Member States leads to the recognition of the decisions, which is an aim of the Draft Directive and a complex question according to Croatia.
Some countries believe that the Draft Directive will have a positive impact on mutual recognition. In particular, Luxembourg considers that the Draft Directive harmonizes in a manner that should be conducive of enhanced mutual recognition.
Others are of the view that the Draft Directive does not address procedural issues sufficiently to impact mutual recognition.
Finally others consider that mutual recognition is not dependent on such harmonization but that other factors such as communication tools and resources would be more effective.
1.14.7.3. Fundamental rights The Draft Directive contains an explanatory memorandum. In it the drafters discuss the issue of proportionality and the respect for Fundamental Rights. It states that: “All provisions fully respect the principle of proportionality, and fundamental rights, including the right to property, the presumption of innocence and the right of defence, the right to a fair trial, the right to a fair and public hearing within a reasonable time, the right to an effective judicial remedy before a court and the right to be informed on how to exercise it, the right to respect for private and family life, the right to protection of personal data, the right not to be tried or punished twice in criminal proceedings for the same criminal offence and the principles of legality and proportionality of criminal offences.” Indeed fundamental rights should be clearly articulated. The ECHR itself in its case law takes great care to analyse in detail the legislation that is questioned in order to find within it, or the national case law that clarifies it, the provisions that positively ensure the respect for fundamental rights147. This articulation is all the more important that in many
147 See a random example of this in ECHR, Van Der Heijden v. The Netherlands, 42857/05, 3 April 2012. Available at: http://hudoc.echr.coe.int/sites/eng/pages/search.aspx?i=001-110188#{"itemid":["001- 110188"]}
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Member States there is either no experience with certain types of confiscations and in others courts are still struggling to find the right balance between the new powers granted law enforcement agencies and due process of law. In the Draft Directive, the ne bis in idem principle is clearly articulated with respect to extended powers of confiscation. It also takes into account “prescription” and “acquittal” stating that under these circumstances, confiscation would be excluded. These exclusions for confiscation are present in the legislation of many Member States. However, there could be issues on the articulation between the two paragraphs of Article 4, between the affirmation of the possibility of extended confiscation and its limits. The Article might gain in clarity if paragraph 2 stated that it only applies to the property that is not targeted by the conviction.
In the explanatory memorandum preceding its references are made specifically to the European Convention on Human Rights (“Convention”) and the ECHR case law. It is stated: “Although it has avoided ruling on the principled question of the compatibility of non- conviction based and extended confiscation regimes with the European Convention on Human Rights, the European Court on Human Rights (ECtHR) has rendered several decisions, upholding their application in particular cases. National non-conviction based procedures involving reversals of the burden of proof on the issue of the legitimacy of assets (which are more far-reaching than the provisions in this Directive) have been upheld by the ECtHR in specific cases, so long as they were applied fairly in the particular case and with adequate safeguards in place for the affected person. For example an application of the Italian legislation was held to be a proportionate restriction on fundamental rights in as much as it constitutes a “necessary weapon” in the fight against the Mafia. In another case an application of the United Kingdom civil confiscation regime was found not to violate the ECHR”. In the first case cited, the court made the statement in respect to the freezing of Mr. Raimondo’s assets. It states: “However, seizure under section 2 ter of the 1965 Act is clearly a provisional measure intended to ensure that property which appears to be the fruit of unlawful activities carried out to the detriment of the community can subsequently be confiscated if necessary. The measure [seizure] as such was therefore justified by the general interest and, in view of the extremely dangerous economic power of an “organisation” like the Mafia, it cannot be said that taking it at this stage of the proceedings was disproportionate to the aim pursued”148.
148 Raimondo -v- Italy; ECHR 22-Feb-1994
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It is important to note that if in some countries, precautionary measures such as these are taken to fights crimes of extreme violence, in other they may be used generally. The question will then on the proportionality of measures taken generally. Further, the ECHR in the Raimondo v. Italy case did in fact make a finding partially for Mr. Raimondo in particular in respect to the duration of the confiscation after Mr. Raimondo was discharged. The measure should not go beyond what is necessary is another rule of proportionality that Member States should respect.
In the second case cited, Walsh v. The United Kingdom, the court stated that the invoked Convention provisions did not apply to the civil confiscation regime because the recovery proceedings did not amount to a criminal charge. To evaluate whether the contentious provisions would apply one would need to apply the three guiding criteria that determine whether a criminal charge is applied. These are: the classification of the matter in domestic law, the nature of the charge and the penalty to which the person becomes liable”149.
1.14.7.4. The issue of the standard of proof Many interviewees were in agreement with the standard of proof proposed in the Draft Directive and saw it as a positive evolution. They also stated that they would need to change their regulations as this was a new standard to them. Under the extended powers of confiscation the proposed standard of proof of “substantially more probable” sets a higher level of burden of persuasion than the “balance of probabilities” used in UK civil courts but a lower one than the “beyond a reasonable doubt” of criminal trials. This standard is also referred to as the “clear and convincing evidence” standard of proof. It is often used in equity cases in common law jurisdictions. In the US, it is mainly known for being the standard of proof imposed on prisoners seeking habeas corpus relief from the death sentence150. In the US it is also used in specific instances where one of the parties stands to lose a substantial amount of money or property151 or when a fundamental liberty is involved. It can be defined as meaning that the evidence presented by the prosecution
149 ECHR, Walsh v. The United Kingdom, 21 November 2006, 43384/05. Available at: http://echr.ketse.com/doc/43384.05-en-20061121/view/
150 See Calderon v. Thompson, 523 U.S. 538 (1998). Available at: http://www.law.cornell.edu/supct/html/97- 215.ZO.html
151 In patent cases for examples the US Supreme Court confirmed that the standard of proof for proving patent invalidity was the clear and convincing evidence standard. See Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S. ___ (2011). Available at http://www.supremecourt.gov/opinions/10pdf/10-290.pdf
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during the trial must be “highly and substantially more probable to be true than not and that the trier of fact must have a firm belief or conviction in its factuality”. In this standard, a greater degree of believability must be met than the common standard of proof in civil actions, the "Balance of probabilities", which requires that the facts as a threshold be more likely than not to prove the issue for which they are asserted or as simply put by Lord Denning in Miller v. Minister of Pensions as “more probable than not”152 or as referred to elsewhere as “pass the 50% threshold of being more likely true than not”. It might be important to define the standard referred to in Article 4 as it appears to be a new standard of proof, at least for some countries, and requires an uniform application if the text is to have the desired impact153. In the UK the standard of “substantially more probable” is not one that the legislature is familiar with154. There has been some degree of confusion in UK courts on the existence of a heightened standard of proof in civil courts when the consequences of civil decisions could affect people’s freedom or property. However, in 2008, this was clarified by a House of Lords decision and only two standards of proof remain: the “balance of probabilities” and “beyond a reasonable doubt”155. The decision concedes that and clarifies when the criminal standard of “beyond a reasonable doubt” may be required in civil cases.
The Council General Approach appears to put aside the higher standard of proof “substantially more probable” to return to a standard that although not defined is similar to the UK civil court standard of proof of the “balance of probabilities”. However, this is contested as under the “Compromise Package” it is stated that: “Extended powers of confiscation (Article 4) - In line with the political guidance provided by the Ministers during the JHA Council in October 2012, the application of the provision was limited by way of compromise to serious criminal offences, which are liable to give rise, directly or indirectly, to economic benefit. This is a further limitation from the general scope of the Directive, namely the offences falling under the scope of Art. 83(1) TFEU. In addition, the standard of proof has been adjusted in accordance with the positions of delegations, thus removing a direct reference to the balance of probabilities, seen as incompatible with some national legal systems.”
152 Miller v Minister of Pensions [1947] 2 All ER 372.
153 See on the need to define Opinion of the European Union Agency for Fundamental Rights on the Confiscations of Proceeds of Crime, FRA Opinion – 03/2012, 4 December 2012, page 4.
154 See Baroness Hamwee, Parliamentary Debates, Column 772, 22 May 2012. Available at: http://www.publications.parliament.uk/pa/ld201213/ldhansrd/text/120522-0002.htm
155 See Judgments – In Re B (Children) (Fc), [2008] UKHL 35. Available at: http://www.publications.parliament.uk/pa/ld200708/ldjudgmt/jd080611/child-1.htm
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It appears that there is a lot of confusion on these different standards of proof and that the original language was misunderstood and the one that replaces it is not itself clear. The new Article 4 describes the standard as: “where a court on the basis of the circumstances of the case, including specific facts and available evidence, such as that the value of the property is disproportionate to the lawful income of the convicted person, is satisfied that the property in question has derived from criminal conduct.” This does not correspond to the higher criminal standard of “beyond a reasonable doubt”. It does not correspond either the definition given above of the second highest standard “substantially more probable” initially proposed. It resembles closely the lower civil standard of proof of “on the balance of probabilities” as defined above. In fact the use of the word “satisfied” is often associated with both standards of proof: “beyond a reasonable doubt” and “on the balance of probabilities”. The question is: should one be satisfied on the “balance of probabilities” or “beyond a reasonable doubt” that the property in question has derived from criminal conduct? This may be an issue for a provision that is adopted under Article 83 (1) of the Treaty. The Council General Approach appears to be using, in the context of criminal matters, standards of proof that are not those of a criminal trial.
Summary
The Draft Directive of 12 March 2012 aims at ensuring that all Member States have freezing and confiscation regimes that follow minimum standards. In particular, all Member States must: Amend their system of extended confiscation (introduced by Framework Decision 2005/212/JHA) Enable the confiscation of third party assets Provided for non-conviction based confiscation Implement statistics methods for measuring the effectiveness of the regimes.
Many Member States consider that they would have to change their regulations substantially in order to comply. Some Member States considered that they already complied for the most part with the Draft Directive provisions. Most Member States consider that the Directive would have a positive impact on fighting crime.
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Some Member States felt that: the scope of the Directive could be more precise the obligations it set under 2(6) were not clear enough the exclusions of article 4(2) were limiting the Directive should make clear that NCBCs are not be limited to criminal proceedings the Draft Directive contained obligations that were contrary to their constitution the statistics provision was burdensome and may prove inefficient
Some Member States consider that the Draft Directive would enhance mutual recognition but most noted that a specific instrument on mutual recognition might be needed.
2. CHAPTER 2: Process of freezing and confiscating criminal assets
Article 7 of the Draft Directive, requires that:
“1. Each Member State shall take the necessary measures to enable it to freeze property in danger of being dissipated, hidden or transferred out of the jurisdiction with a view to possible later confiscation. Such measures shall be ordered by a court.
2. Each Member State shall take the necessary measures to enable its competent authorities to immediately freeze property when there is a high risk of dissipation, hiding or transfer of that property before a court's decision. Such measures shall be confirmed by a court as soon as possible.”
The Council General Approach of December 2012 states that:
“Freezing
1. Each Member State shall take the necessary measures to enable it to freeze property (…) with a view to possible later confiscation. Those measures shall include urgent action to be taken when necessary in order to preserve property. Such measures shall be ordered by a competent national authority.
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2. If the competent national authority ordering the freezing is not a court or another judicial authority, each Member State shall take the necessary measures to ensure that the measure may be effectively reviewed by a court or another judicial authority.”
Therefore, Member States must enable the immediate freezing of assets in emergency situations, where there is an important risk that these assets will be destroyed, hidden or transferred before the adoption of a Court Decision. In these cases, the competent authorities may adopt temporary freezing measures. Those measures have to be confirmed by a Court or other judicial authority as soon as possible.
Except those specifications, and if the Directive was adopted, Member States would still have the choice to set the procedure. Based on the principle of their procedural autonomy, Member States have total freedom in choosing the appropriate procedure to achieve these objectives. The Council General Approach gives them ample room for appreciation. In effect, police officers and public prosecutors can order the freezing of assets provided that the order is confirmed at some stage by a judicial authority. As shown below, apart from some definitional issues, this is already the situation in virtually all Member States and is in line with the ECHR case law.
It is difficult to see however how this will affect mutual recognition of freezing orders. The Council General Approach goes further in recognizing the role of judicial authorities in the freezing of assets than the Draft Directive did, but still places weight on the validation of the order by a Court or judicial authority.
The impact of the Council General Approach may be more important if it repealed – which it does not currently do – sections of the Framework Decision 2003/577/JHA on the execution in the European Union of orders freezing property or evidence. If by doing so it forces receiving Member States to accept requests from non-judicial authorities, the Council General Approach will have circumvented a long established ECHR line of authority which unambiguously affirms that public prosecutors are not judicial authorities or officers authorised by law to exercise judicial power since they lack the essential qualities of impartiality and of independence both from the executive (the Government) and the defendant in the case. They are in effect a party to the action. The question will then be whether by changing the nature of the authority entitled to make decisions of that nature, the EU is not violating other fundamental rights. Doesn’t the jurisprudence of the ECHR point to the necessity that judicial authorities participate in such decisions having thus a deeper meaning on due process or is it just limited to the definition of what a “judicial
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authority” means.
2.1. Procedure Actually 26 of the 28 Member States have a legislation that provides for the intervention of the judicial authorities on the adoption of seizure/freezing measures.
Lithuania is the only Member State where the freezing power is attributed exclusively to the Public Prosecutor.
In 9 Member States power to order freezing is attributed exclusively to Judicial Authorities.
In 19 out of 28 Member States, the competence on freezing/seizure is shared between the Court, usually as deciding authority and the Public Prosecutor and /or Police officer intervening during the pre-trial proceedings.
Where an investigating judge is involved in the procedure, he or she is generally not the one taking the decision to freeze assets. Rather, it is the Court before which the case is brought that decides on freezing /seizure measures after the starting of the criminal proceedings.
However, in cases of an emergency, the instructing judge or the public prosecutor may grant a temporary freezing order to police officers in charge of the case under the condition of the Court’s subsequent confirmation of the order.
One notices great variations in the procedural rules adopted by different Member States. In some countries the investigative judge is considered a “judicial authority”. In others, a “public prosecutor” is a magistrate and thus could potential qualify as a “judicial authority”. This issue has been raised before. In Skoogstrom v Sweden (1984) 6 EHRR CD77 it was expressly held that a Swedish prosecutor could not be “a judge or other officer authorised by law to exercise judicial power” for the purpose of Article 5(3) of the Convention. This is because he lacked the essential quality of independence. The ECHR held: “…76. The Commission observes that the public prosecution forms part of the Executive in the traditional sense of that concept. However, this fact alone does not mean that the Public
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Prosecutor is not independent for the purposes of Art 5 (3). It is true that the Swedish Public Prosecutors have a personal independence as they can never receive instructions from any public authority when deciding in a particular case… 77. However, in order to possess the necessary independence, the "officer" envisaged by Art. 5 (3) must also be independent of the parties. In this respect, the Commission recalls that the tasks of the Public Prosecutor are inter alia to make preliminary criminal investigations, to decide whether or not prosecution should be instituted, to draw up the indictment and to perform the prosecution in the courts. In addition, the Public Prosecutor has power to provisionally detain a person who is reasonably suspected of having committed an offence. It is noted that in general all these tasks are performed by the same prosecutor, and in case a prosecutor is for some reasons substituted by another prosecutor, then the substitute takes full responsibility of the case. There is thus no question of a distinction between investigating and prosecuting authority. Furthermore, the organisation of the prosecuting functions in Sweden is a hierarchical system, where a superior prosecutor may give general directives to lower prosecutors, take over their cases and review their decisions. It therefore appears that a prosecutor is subject to constant supervision by his superior, although the superior may not order the subordinate prosecutor to take a particular decision in an individual case. 78. …When Mrs M had to take the decision on the applicant's continued detention she had replaced the Chief District Prosecutor completely, and had taken full command of the whole case of the applicant, which in principle thus included the continued preliminary investigation, the decision as to whether prosecution should be instituted against the applicant, and subsequently the task of performing the prosecution in court. However, in taking full charge of the applicant's case Mrs M did, as the Court put it in the Schiesser Case, "assume the mantle of prosecutor"…In the opinion of the Commission the circumstances of the present case show that when taking the decision on the applicant's continued detention Mrs M was not independent of the parties. She was one of the parties, and could have been called upon to continue to perform tasks, which are undeniably tasks of a prosecutor. The fact that Mrs M did not herself perform the subsequent prosecution in court, could not retroactively make her independent of the parties at the time when she took the detention decision. It was a mere coincidence that all the tasks were not performed by the same prosecutor… 79. Accordingly, the Commission is of the opinion that the Public Prosecutor who decided that the applicant's provisional detention should continue, did not fulfil the requirement of independence…”. Page 123 of 477
As stated in the Julian Paul Assange UK Case156, “Skoogstrom is part of a long-established and consistent line of Strasbourg authority to the effect that public prosecutors, or those subordinate to public prosecutors, are not “officer[s] authorised by law to exercise judicial power” within the meaning of Article 5(3).157”
The Medvedyev v France (2010) 51 EHRR 39 is important on two levels. First, reaffirming that a public prosecutor is not a judicial authority, it concedes that the investigative judge does in fact have judicial powers and is independent of the parties. Second, it accepts that, provided that the duration of the detention is reasonable before a decision by the investigative judge is made, the public prosecutor may order it. In the case the ECHR reviewed a situation where defendants who were arrested in international waters and detained on board their ship, on the authority of the public prosecutor, for 13 days whilst it was towed to France, were only brought before an investigating judge thereafter. The applicants argued that: “110. …their detention on the ship had not been under the supervision of a “judge or other officer authorised by law to exercise judicial power” but under that of the public prosecutor, who was not such an officer according to the Court's case-law (Schiesser v. Switzerland, 4 December 1979, Series A no. 34; Huber v. Switzerland, 23 October 1990, Series A no. 188; and Brincat v. Italy, 26 November 1992, Series A no. 249-A), in particular because of his lack of independence vis-à-vis the executive…” The French government countered that: “..114 …Concerning the characteristics and powers of the officer concerned, the Government maintained that although the Court had found that a public prosecutor or other judicial officer appearing for the prosecution could not be considered a “judge” for the purposes of Article 5 § 3 (see Huber, cited above), the same could not be said of an investigating judge. Investigating judges were fully independent judges whose job was to seek evidence both for and against the accused party, without participating in the prosecution or the judgment of the cases they
156 [2011] EWHC 2849
157 See Schiesser v Switzerland (1979-80) 2 EHRR 417; De Jong v The Netherlands (1986) 8 EHRR 20; Pauwels v Belgium (1989) 11 EHRR 238; Van der Sluijs v The Netherlands (1991) 13 EHRR 461; Huber v Switzerland (1990) ECHR App. No. 12794/87; Brincat v Italy (1993) 16 EHRR 591; Assenov v Bulgaria (1999) 28 EHRR 652; Nikolova v Bulgaria (2001) 31 EHRR 3; Niedbala v Poland (2001) 33 EHRR 48; Shishkov v Bulgaria (2003) ECHR App. No. 38822/97; Klamecki (No. 2) v Poland (2004) 39 EHRR 7; Pantea v Romania (2005) 40 EHRR 26; Jasinski v Poland (2005) ECHR App. No. 30865/96; Zlinsat, Spol. S.R.O. v Bulgaria (2006) ECHR App. No.
57785/00; Balbul v Turkey (2007) ECHR App. No. 47297/99; Moulin v France (2010) ECHR App. No. 37104/06; Garlicki v Poland (2011) ECHR App. No. 36921/07;
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investigated. In France the investigating judge supervised all custodial measures taken in the cases under his responsibility – be it police custody or detention pending trial – and could terminate them at any time. Although he had to apply to the liberties and detention judge when contemplating remanding a suspect in custody, he had full power to release people or place them under court supervision. The Government pointed out that the Court had already ruled that the investigating judge fulfilled the conditions laid down in Article 5 § 3 (A.C. v. France (dec.), no. 37547/97, 14 December 1999)… 116. Lastly, the Government considered that the public prosecutor was a legal authority independent of the executive, and that his supervision while the Winner was rerouted to Brest had provided the protection against arbitrariness which Article 5 of the Convention was meant to guarantee…” The ECHR confirmed that public prosecutors, or those subordinate to public prosecutors, are not authorised by law to exercise judicial power within the meaning of Article 5(3). It also held that the investigating judge exercised judicial power within the meaning of Article 5(3) and that the delay in bringing the applicants before the investigating magistrate was reasonable in the circumstances.
By transposition this means that freezing orders taken in cases of emergency, to preserve evidence for example and prevent a risk of its destruction, police officers and prosecutors may proceeds to freeze assets provided that a judicial authority validates the process within a reasonable period of time. This study finds that this is generally the principle adopted in the Member States although as shown by the string of cases brought before the ECHR on the issue of what is a judicial authority – concerning eight Member States- , it is clear that enforcement of the principles does not always follow.
2.1.1. Decision to freeze criminal assets In general decisions to freeze criminal assets are made by judicial authorities (courts, investigating judges). They can be made ex officio and most often upon the request of a police officer or the public prosecutor. In some rare and exceptional instances – in particular in cases of emergencies in order to preserve evidence – the public prosecutor or a designated specialized agency (i.e. a Financial Intelligence Unit) may issue a freezing order. Most of the time these decisions will need to be confirmed at one stage by a judicial authority and often shortly after they are issued.
One notes that generally speaking the freezing of assets aims at three objectives: Preserving evidence, protecting the public and/or discovering the truth
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Ensuring the possibility of a future confiscation Payment of fines
The first objective usually corresponds to a preliminary phase in the proceedings where the police force and prosecutors are most involved. In this phase, seizure are performed and freezing orders may be granted. When seizures performed by police officers, they are usually confirmed or cancelled shortly thereafter by a prosecutor.
The second objective corresponds to a phase in the proceedings where a criminal investigation is on-going and most often involves a judicial authority. As a result, freezing orders are then issued by the judicial authority either ex officio and/or based on a request from the prosecutor.
The third objective corresponds to a phase that comes after a conviction and will involve a decision by a judicial authority.
Some professions benefit from extra protection. Seizures of assets belonging to the press, legal professionals and doctors generally require a decision by a judicial authority.
Lithuania is the only country where the freezing order is issued by the Public Prosecutor as a rule. However, the validity of this order is limited to 6 months. It can only be extended by a decision from an investigative judge.
Deciding Authority MS Judicial Authority Non Judicial Authority Both AT BE BG CY CZ DE DK EE EL ES FI
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FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK
2.1.1.1. Austria
AT Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide Criminal Public Prosecutor Criminal Police (seizure exceptionally in some specific case) Court (sequestration)
Under Austrian Law, there is a distinction between seizure and sequestration.
Seizure is ordered by Public Prosecutor and is executed by Police (Investigation
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Department)158.
In some special cases such as: unclaimed objects, those taken from the victim via the criminal act, those found on crime scenes, assets that were used, could be used or are intended to be used for committing the criminal acts, objects for which possession is illegal, the police officers can enforce seizures at its own discretion. They must however report the seizure operation to the public prosecutor’s office as soon as practicable and in any case within 14 days of the seizure.
The affected person has to be informed within 24 hours of the seizure both on the seizure itself and its scope and on existing legal remedies.
The seizure will end when the criminal police cancel it, if the public prosecutor orders it to be cancelled or if the Courts orders sequestration.
Sequestration can be ordered exclusively by the Court, upon the Public Prosecution’s request. The Court must decide whether to cancel the seizure or to continue a seizure order and establish the prohibition to sale, encumbrance or pledging of real estate or other rights159. Sequestration is decided among others things to secure an eventual judicial decision on confiscation of profits160 or forfeiture161. In that case, the sequestration order must determine the amount of money necessary to cover the amount to be confiscated or declared forfeited162. The decision on sequestration is notified to the affected parties together with the remedies available and in particular their right to appeal the decision163.
158 Article 110 (2) of Autrian Criminal Procedure Code.
159 Article 109 (2) of Autrian Criminal Procedure Code.
160 Article 20 of Criminal Code.
161 Article 2Ob of Criminal Code.
162 Article 115 § 4 of Criminal Procedure Code.
163 Article 86, 87 of Criminal Procedure Code.
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2.1.1.2. Belgium BE Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide Prosecutor Central Office for Seizure and Confiscation (COSC) Investigating Judge ( judicial investigation stage).
In Belgium, criminal seizure may be ordered by the Public Prosecutor at the police investigation stage and by the investigating judge at the judicial investigation stage164.
2.1.1.3. Bulgaria BG Nature of Procedure Main Authority Proposal/ Initiative, when Civil/Criminal To decide different from main authority to decide Criminal : First Instance Criminal : Public Prosecutor Court Civil : Commission for the Civil : Regional Court Establishing of Property Acquired through Criminal Activity (CEPACA)
In Bulgaria, the Court of First Instance may, upon the proposal of the public prosecutor, decide measures in order to secure the fines, forfeiture and confiscation of proceeds of criminal offences165.
Freezing measures may be decided for all kinds of crime that may be punishable by a confiscation.
164 Article 35 and 89 of the Criminal Procedure Code.
165 Article 72(1) of the Bulgarian Criminal Code.
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These measures may consist in166 : Placing an interdict on real estate ; seizure of movable assets and receivables of the debtor; Other appropriate measures, as determined by the Court.
The Court may revoke these measures upon the request of the interested Party, if it believes that the reasons initially justifying the freezing measures do not exist anymore.167
The legislation on the Commission for the Establishment of Property Acquired through Criminal Activity (CEPACA), provides that specific freezing measures may be taken under the Civil Procedure Rules168. Based on information and evidence related to an accused person and his/her property, and if there a risk that the assets will be destroyed, hidden or disposed of, the Commission presents a motivated request to the Regional Court of the residence of the concerned person or of the location of the property, proposing the imposing of a freezing order such as securing premises, equipment and vehicles. If approved the decision of the Court is immediately enforceable.
The Court may revoke such measures, upon the request of the affected person, if it is proven that the concerned assets were legally acquired.
2.1.1.4. Cyprus CY Nature of Procedure Main Authority Proposal/ Initiative, when Civil/Criminal To decide different from main authority to decide Criminal Court The Unit for Combating Money Laundering169
166 Article 397 of Bulgarian Criminal Code.
167 Article 402 of Bulgarian Criminal Code.
168 Article 21 of CEPACA Law.
169 The Unit for Combating Money Laundering was established in December 1996, and became operational in 1997. It is composed of representatives of the Attorney General, the Chief of Police, and the Director of the Department of Customs and Excise, and it is directed by the Attorney General of the Republic of Cyprus.
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The freezing order can be issued by the Court170 anytime Criminal Proceedings have started or will be initiated against a person suspected or accused for the commission of a money laundering offence, or the Unit for Combating Money Laundering possesses information which creates a reasonable suspicion that a person may be charged with the commission of a money laundering offence and the Court is satisfied that the evidence reasonably points to the person having benefited from the commission of the predicated offence.
The Unit for Combating Money Laundering receives foreign freezing orders directly and if satisfied that it meets the relevant legal requirements, it submits it to the Court as soon as possible for registration and enforcement. Once the Court decision for registration and enforcement is done, the order is sent by the Unit for Combating Money Laundering to the holders of the targeted assets such as banks or the land registry.
2.1.1.5. Czech Republic CZ Nature of Procedure Main Authority Proposal/ Initiative, when Civil/Criminal To decide different from main authority to decide Criminal - Court (during the Proceeding), - Public Prosecutor (during pre-trial as concerning specific cases as described here after) - Police authority after the consent of the Public Prosecutor for other situations
In The Czech Republic, the seizure (freezing) of proceeds of crime171 can be ordered either as a safety measure in pre-trial proceedings, during the criminal proceeding and after the criminal proceedings as part of the final decision or conviction.
170 Section 14 of the Prevention and Suppression of Money Laundering of Unlawful Activities Act.
171 Seizure (Freezing) is regulated by Act No. 40/2009 Coll amending the Criminal Code, Act No. 141/1961 Coll amending the Criminal Procedure Code, Act No. 418/2011 Coll. on Criminal Liability of Legal Persons and Page 131 of 477
The competent Court makes a decision on the freezing of assets during criminal proceedings. The person alleging ownership of the seized assets may appeal this decision.
The freezing of assets is also possible in certain circumstances in criminal pre-trial- proceedings. The decision is made by the public prosecutor following a request by a police officer. Only the public prosecutor may decide on the freezing of specific assets such as seizure of securities172, seizure of the property of the accused for the purpose of securing the claim by the victim of the criminal act173, seizure of property of the accused in order to ensure the confiscation174). In other case, and in particular in urgent cases, a police officer may seize assets provided that such decision is notified to the public prosecutor within 48 hours.
2.1.1.6. Germany DE Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide Civil (attachment concerning Court /or the reel rights and claims) / Public Prosecutor Criminal (assets) in some specific circumstances
Any time there are reasons to believe that conditions for forfeiture or confiscation are met, the concerned assets may be secured by seizure175, attachment176 (concerning right and claims) or an attachment in rem (concerning confiscation of equivalent value).
The decision on seizure and attachment in rem is issued by the Court.
Proceedings Against them, Act No. 279/2003 Coll. on on Execution of Seizure of Property and Things in Criminal Proceedings.
172 Section 79 c of the Criminal Procedure Code.
173 Section 47 of the Criminal Procedure Code.
174 Section 347 of the Criminal Procedure Code.
175 Section 111c of the German Criminal Procedure Code.
176 Section 829, 835 of the Civil Procedure Code.
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Seizure order or attachment in rem in specific circumstances may also be decided by the Public Prosecutor Office.
A freezing order on a moveable asset may, in urgent circumstances, may be issued by the public prosecutor’s office (including the police).
2.1.1.7. Denmark DK Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide Criminal Court / exceptionally Police Request Police upon the written consent of the Court
In Denmark, freezing orders are regulated by the Administration of Justice Act (AJA)177. It is mainly aimed at ensuring the availability of objects or fund susceptible to be confiscated during criminal proceedings.
The freezing of assets generally requires a Court order.
However, there are some exceptions foreseen by the Law. In urgent cases, the police may freeze the assets provided that the court is notified of this and grants its consent within 24 hours of the enforcement of the freezing measure178.
2.1.1.8. Estonia EE Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide
177 Section 801 of Administration Justice Act.
178 Section 802.1-2 ; Section 806.3 and 806-7 of Administration of Justice Act (AJA).
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Criminal Court Public Prosecutor
In Estonia, the general rule is that freezing orders are made by the competent court or the investigative judge in criminal matters based on a request from the public prosecutor’s office.
The public prosecutor may, where urgency dictates, seize assets provided that such decision is notified to the investigative judge within 24 hours and the judge confirms the decision immediately.
2.1.1.9. Greece EL Nature of Procedure Main Authority Proposal/ Initiative, Civil/ Criminal To decide when different from main authority to decide Criminal /pre-trial proceeding Investigating Judge Reporting of related to investigation of an with the consent of suspicious transactions by offence or preliminary the Public the financial sector to the examination of investigation of Prosecutor/ Or the FIU, searches in premises, a predicated offence Judicial Council / or police investigations etc. the President of FIU ( when the investigation is done by FIU)
In Greece, freezing of criminal assets is decided during the pre-trial proceedings and thus during the investigation or a preliminary examination of the investigation179.
During the regular investigation, a freezing order may be issued by the investigating judge, with the consent of the public prosecutor.
During the preliminary examination of the case and offense, the freezing of assets suspected as being proceeds of the offence, may be ordered by the “Judicial Council”.
179 Article 48 of the Anti Money Laundering Law n° 3691/2008.
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Freezing orders emanating from the Investigating Judge or the Judicial Council are binding on all financial Institutions. In some case, the freezing measure may consist in the prohibition to sell the real estate of the suspected person.
The accused, the suspected person or the third party concerned by freezing measures may appeal the order to have it cancelled within 20 days of its issuance. The appeal does not suspend enforcement.
In cases where the Financial Intelligence Unit (“FIU”) conducts the investigation, and if there is an emergency, the freezing of accounts, securities, financial products or safe deposit boxes, or the ban of sale or transfer of any assets, will be ordered directly by the Chairman of the FIU. The concerned persons have the right to ask for the revocation of this order in the same conditions as explained above.
2.1.1.10. Spain ES Nature of Procedure Main Authority Proposal/ Initiative, Civil/ Criminal To decide when different from main authority to decide Criminal Investigating Assets Location Office Judge/having (OLA) belonging to the territorial UDEF (the Fiscal and competence on the Economic Crime Unit of place where assets Spain's Judicial Police). are located
The legal basis for freezing is Articles 589 to 614 of Title IX of the Code of Criminal Procedure for bail and seizure.
Under Spanish Law, freezing of assets may be ordered by the competent investigative judge or a Court.
Public prosecutors may order freezing of assets during the investigation if an evidence protection order is necessary.
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In specific cases of terrorism and drug trafficking, the competent authority to order freezing measures are the Central Investigating Judges within the National Court system180.
The execution of freezing orders and evidence protection orders issued by a requesting Member State is undertaken by the investigating judge.
2.1.1.11. Finland FI Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide Criminal Court (freezing under Pre-trial Coercive Measures investigation authority - Act) / or Public police, customs or border Prosecutor ( guard and FIU concerning temporary freezing)/ or Police Officer of FIU (money laundering offences)
In Finland, one must distinguish: freezing or seizure order under the Coercive Measures Act issued by the court, temporary freezing seizure issued by a Prosecutor attachment order issued by a Court or Prosecutor
As special kind of freezing procedure related to money laundering offences has also been adopted, consisting in an order to suspend business transactions for not more than five working days, adopted by the police officer working in the INB/FIU181.
2.1.1.12. France FR
180 Article 65 of the Judiciary Organic Act.
181 Section 26 (3) of the Act on Prevention and Investigation of Money Laundering and the Financing of Terrorism.
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Nature of Procedure Main Authority Proposal/ Civil/Criminal To decide Initiative, when different from main authority to decide Criminal Investigating Judge Public Prosecutor / Magistrate for but sometime on the own Custody and Release initiative of the (Juge des libertés et Investigating Judge de la détention) Court ordering confiscation, for the purpose of the execution of this confiscation/ police services for probationary seizure
Before 2010, French Law distinguished between probationary and protective seizure, the latter being governed by civil Law.
The law of 9 March 2004 created a criminal procedure for protective seizure, which was limited in its scope to offenses related to organized crime.
Extending this scope, Law No. 2010-768 of 9 July 2010 creates a general procedure concerning all seizures, whether there are probationary or protective, (i.e. aimed at preparing the eventual confiscation of assets).
In facilitating the seizure and the confiscation of criminal assets, the new law modernises the French legal system concerning the seizure and confiscation of the proceeds and instruments of the crime.
The category of assets which may be seized is extended to all the assets which confiscation is provided under article 131-21 of the Penal Code.
Those assets can be seized at all stages of the procedure, even during a European and International judicial cooperation procedure.
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For protective seizure (the asset has no link with the offence, but is seized to guarantee payment of the future fine and compensation of the victims), article 706-103 refers to the offences mentioned by articles 706-73 and 706-74 of the same code. Article 706-73 provides for a list of offences which can be qualified as “organized crime”.
Article 706-74 provides that some offences can also be categorized as “organized crime”, when the article defining the offence states so.
For property’s seizure, the text defining the offence has to specifically provide that seizure is possible for this kind of offence or where the origin of the assets cannot be determined.
For all seizures :
The JLD (Juge des libertés et de la detention) can order the seizure, at the request of the public prosecutor; The instructing judge (Juge d’instruction) can order the seizure at the request of the public prosecutor, or on its own initiative.
2.1.1.13. Hungary HU Nature of Procedure Main Authority Proposal/ Civil/Criminal To decide Initiative, when different from main authority to decide Criminal Court (sequestration) Prosecutor or the /Prosecutor or the investigating authority Investigating Judge (precautionary measures)
In Hungary, the seizure of property may be ordered by a court, the prosecutor or the investigating authority182. In Hungary a distinction is made between precautionary measures whereby the authority seeks to ensure that the assets are available for
182 Section 151 of the Criminal Procedure Act.
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confiscation (or sequestration) and seizure mainly used for preserving evidence. In any case, whether it be seizure or precautionary measures, these can be taken by a judicial authority, the public prosecutor or a police officer.
While the sequestration183 order, the equivalent of a confiscation, is solely issued Court184, the Prosecutor or the Investigation authority may apply “precautionary measures”.
2.1.1.14. Ireland IE Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide Criminal High Court Director of Public Prosecutions
Under Irish law, the freezing order is adopted by the High Court on the request of the Director of Public Prosecutions185.
The Court will approve the request if criminal proceedings have started, and if not, if criminal investigations have been instigated.
2.1.1.15. Italy IT Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide
Criminal Court Ex-officio
183 The sequestration will end when its cause does not exist any more, when it was ordered to secure coverage for a specific sum of money and this amount has been deposited, no confiscation order has been adopted at the end of the proceedings, the civil claim has been dismissed. Sequestration may also be terminated by the Prosecutor until the indictment has been submitted.
184 Section 159 of the Hungarian Criminal Procedure Act.
185 Section 24 of Criminal Justice Act, 1994.
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In Italy, seizure is decided as a precautionary measure by the Court through ex parte proceedings, which have to be motivated. The Court can act even ex officio.186 The Court might revoke the seizure when the proposal of application of preventive measures has been rejected, when it appears that the legal origin of the seized assets has been proved or if they are not in direct or indirect possession of the suspected person.
2.1.1.16. Lithuania LT Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide Criminal Public Prosecutor and Pre-trial investigators extended by a or prosecutor judicial authority
In Lithuania, freezing of criminal assets as a temporary limitation of ownership rights is decided by the Public Prosecutor as an ex parte decision. The initial freezing order is valid for a maximum period of 6 months. It may be renewed once and by a judicial authority. In cases of very serious crimes multiple renewals are possible.
The order is notified to the person whose ownership rights are temporarily limited no later than on the following day of its issuance. When this is not possible, its registration in the registry of seized property acts as a valid notification to the concerned owner or co-owner.
The owner is entitled to lodge an appeal with the pre-trial investigating judge against the decision of the prosecutor. The decision of the investigating judge may also be appealed to a Higher Court, whose decision shall be final. An appeal does not suspend the freezing proceedings.
The same procedural rules are applicable both in national and international investigations.
2.1.1.17. Luxembourg LU
186 Article 20 of the Legislative Decree n° 159/11.
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Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide
Criminal Investigating Judge / or the Police (in case of flagrant crime or delit)
The freezing of criminal assets can be decided either by the Police, in cases when the crime or offence has just been committed (in flagrante delicto)187 or by the Investigating Judge within the framework of the criminal investigation188.
The freezing order of the Investigating Judge may be cancelled “ex-officio” by the same magistrate189.
The restitution of the seized/frozen assets may be requested at any stage of the procedure by the accused, by an injured party having made an property claim or by any other person alleging a right on the asset seized.
The decision on this request is subject to appeal190 and restitution may be requested before the court.
Cancellation of the decision on freezing may be requested for formal reason, by the Public Prosecutor, the accused person, the injured party or any other concerned third Party, within 5 days from the day that the applicant for a cancellation has knowledge of the freezing order191.
187 Article 33 of the Luxembourg Criminal Procedure Code.
188 Article 66 of the Luxembourg Criminal Procedure Code.
189 Article 67 of the Luxembourg Criminal Procedure Code.
190 Article 68 of the Luxembourg Criminal Procedure Code.
191 Article 126 of the Luxembourg Criminal Procedure Code.
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2.1.1.18. Latvia LV Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide During the pre-trial – the person directing the proceeding such as an investigator, a public prosecutor, a judge / The Court during the Trial In Latvia, the freezing of products and instrumentalities of crime consists in an attachment on property, also called “arrest”. A notice is published for the attachment of the property. This is not necessary when the decision is sent to a credit institution for execution or registered with a public register. A copy of the notice is served on the person whose property is attached. If he/she is absent, the notice will be issued to the local government representatives of the territory where the attached property is located. If the property is in ownership of a legal person, the notice is issued to the representative of the respective legal person.
The authority with the power to freeze the property varies depending on the stage of the proceedings. During the pre-trial proceedings, the attachment on property shall be imposed by the decision of the person directing the proceeding.
The quality of this person depends on the stage of the proceedings as well: an investigating judge or in exceptional cases a public prosecutor – in an investigation; a public prosecutor – in a criminal prosecution; an investigating judge – in preparing a case for trial; Page 142 of 477
the court in charge of the trial; a judge enforcing a court decision.
During the main trial, the attachment on property will be imposed by a court Decision.
In case of emergency, when there is a risk that the assets subject to future confiscation might be may be alienated, destroyed, or hidden, a person directing the proceedings may order an attachment on the property with the consent of a public prosecutor. In this case, an investigating judge will be informed of the attachment on property not later than on the next working day. If the investigating judge does not approve the decision, restitution of the attachment on property is automatic.
Attachment on property is registered with the relevant public register. This involves a prohibition on alienating such a property and on burdening such property with other obligations or liabilities. The attachment on property is revoked by a decision of the person directing the proceedings when the reasons having justified it do not exist anymore.
2.1.1.19. Malta MT Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide Criminal Criminal Court Attorney General Prosecutor
During the investigation, freezing orders (attachment on property order) are issued by the criminal court based on the attorney general’s request. They are executed by a member of the executive police, not below the rank of Inspector192.
During the trial stage, the court issues a freezing order following a request from the prosecution193.
192 Article 435 A of the Criminal Code and Section 4 and 4B of the Prevention of Money Laundering Act.
193 Article 5 of the Prevention of Money Laundering Act.
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The freezing order attaches all moneys and movable property belonging to the accused even if held by third parties and prohibits such person from transferring, pledging, alienating or otherwise disposing of any movable or immovable property.
A minimum sustenance amount may not be frozen. A sum of thirteen thousand and nine hundred and seventy-six euros and twenty-four cents (13,976.24) every year is allocated to the accused and his family. The court may also, as an exception, allow the payment to bona fide creditors, of debts contracted by the accused before the issuance of the freezing order. The freezing order is published in the official gazette and registered with the public registry. The order remains in force until the end of the proceeding and if the accused is convicted, until the execution of the sentence194.
2.1.1.20. The Netherlands NL Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide Criminal Public Prosecutor / or the Investigating Judge (seizure as a protective measure)
In the Netherlands one of three objectives are pursued when freezing orders are issued195: Seizing assets with a view of preserving evidence or uncovering the truth; Seizing assets that may be subsequently confiscated; Seizing assets to enforce a fine.
The first category of freezing order may be issued or consented to by a public prosecutor. Thus, in urgent cases, law enforcement authorities may seize proceeds of crime even in the absence of an order from a judicial authority.
In principle the investigative judge issues freezing orders with respect to the second and third category, even ex officio in particular where the pre-trial investigation has transformed into a judicial preliminary investigation. The public prosecutor then enforces
194 Prevention of Money Laundering Act, article 5(2).
195 Article 94 of the Dutch Criminal Procedure Code.
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it. Freezing orders may be made in respect to offences punishable by a maximum fine of the fifth category.
Freezing orders can be taken ex pert and without prior notice. Notice must be given once the order has been enforced.
2.1.1.21. Poland PL Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide Criminal Public Prosecutor Police and ARO (preparatory proceeding)/or Court (main proceeding) / Police (emergency situation – limited to 7 days)
Under Polish Law, freezing is applied as a protective measure for the execution of a fine or forfeiture of assets, or of a supplementary payment to the injured party or a pecuniary consideration for a public purpose, imposed to the offender of an offence196.
The police can execute temporary seizures of assets for up to seven days. Similarly, tax agencies may under tax law seize assets for up to seven days197. The Financial Intelligence Unit may also freeze assets for up to 72 hours198. If these are not confirmed by the state prosecutor or a court, it ceases to be valid.
The state prosecutor may issue the freezing order during the pre-trial proceedings. During the main proceedings, only the court may issue a freezing order. In both cases, the appeal is allowed against the freezing order.
In both case, the freezing order may be appealed.
196 Article 291 § 1 of the Criminal Procedure Code.
197 Article 129 of the Fiscal Criminal Code.
198 Article 18 of the FIU Act of 2000.
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The freezing order may consist in the seizure of movables, liabilities and other property rights and in prohibition of selling and encumbering the real estate. The prohibition is registered with the land and mortgage register.
2.1.1.22. Portugal PT Nature of Procedure Main Authority Proposal/ Initiative, Civil/Criminal To decide when different from main authority to decide Criminal Judicial Authority/ Public prosecutor exceptionally by the Criminal Police (in emergency situations) In Portugal, seizure is authorised, ordered or validated by an order from a judicial authority once the investigation has started. The public prosecutor may take precautionary measures at the inquiry stage in particular to preserve evidence. In all cases the seizure of property with a view to confiscate it is ordered by a judicial authority and requested by the public prosecutor199.
In some specific cases, during searches as well as in case of emergency, seizures may be carried out by police officers. However, these must be approved within 72 hours by a judicial authority200.
In money laundering cases, the public prosecutor may freeze funds or block transactions if there is a suspicion that the transaction is organized for the purpose of money laundering201.
Owners of the seized assets have the right to apply to the investigating judge for the modification or the cancellation of the measure.
199 10 of Law 5/2002
200 Article 178 of the Criminal Procedure Code
201 Article 9 (2) of Law 11/2004
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If seized assets belong to a third party, the judicial authority will hear him or her and where he or she is bona fide may release the assets.
2.1.1.23. Romania RO Nature of Procedure Main Authority Proposal/ Civil/Criminal To decide Initiative, when different from main authority to decide Criminal Public Prosecutor The Court may (investigation phase) decide about the Public / or Court (main trial Prosecutor’s freezing phase) order by its own initiative or upon the request of interested Parties
In Romania, the public prosecutor issues the freezing order during the criminal investigation phase, while during the criminal trial phase, the competent court decides on freezing orders.
However, during trial the prosecutor or the court may take interim measures that consist in freezing assets202.
During the investigation phase, if necessary, the prosecutor issues a freezing order on assets identified by the police as being potentially linked to the criminal offences they are investigating. At the end of the investigation, if the prosecutor decides to drop charges, it orders the restitution of the concerned assets. If the prosecutor decides to file an indictment, it then falls on to the Court to issue a freezing order either by ex officio or upon the request of interested Parties. The court decides on the precautionary measures in the final sentencing.
Any interested party may file an appeal against the freezing order.
2.1.1.24. Sweden SE
202 Article 163 of the Criminal Procedure Code.
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Nature of Procedure Main Authority Proposal/ Civil/Criminal To decide Initiative, when different from main authority to decide Criminal Court (attachment on Upon the request of the property)/ Prosecutor or the Prosecutor or aggrieved person Investigating authority ( seizure of objects)
In Sweden a distinction is made between attachment203 and seizure204. Attachment corresponds to a freezing order made in order to ensure that future confiscation can be implemented. Seizure aims at gathering evidence. Only the court may decide on an attachment whereas it is in the prosecutor’s competence to decide on seizure. However, pending attachment the prosecutor may freeze assets to preserve them provided that he/she makes an application to the court within 5 days. The court must then decide within 4 days on whether to attach.
Seizure of objects can be decided by an investigating authority and the prosecutor under specific condition provided by the Code of Judicial Procedure. In emergency situations, the police officer mays seize objects without an attachment order. This is not possible concerning the immovable objects, for which the attachment order is necessary.
Appeals against seizure and attachments are possible before the court. Once the appeal is lodge the court must hold a seizure hearing within 4 days. Seizures may only last a short period of time before prosecution is instituted. If prosecution is not instituted, within a reasonable time-frame, the seizure may be cancelled by the court.
2.1.1.25. Slovenia SI Nature of Procedure Main Authority Proposal/ Civil/Criminal To decide Initiative, when different
203 Chapter 26 of the Criminal Procedure Code.
204 Chapter 27 of the Criminal Procedure Code.
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from main authority to decide Criminal Court State Prosecutor
As provided by the Slovenian Criminal Procedure Law, assets or other objects identified during the financial investigation phase of the procedure might be subject to seizure in order to ensure their later eventual confiscation.
Police officers also may seize assets in the course of their inquiries and before the investigation has started in specific circumstances – preserving evidence, avoiding destruction of assets205.
In such a case, the State Prosecutor leading206 the investigation must initiate the procedure for maintaining the freeze on the assets within eight working days from the day of seizure.
The objects seized are returned immediately if the public prosecutor finds that there are no grounds for criminal prosecution, nor any other statutory ground for confiscating the objects207.
If the prosecutor wishes to maintain the assets frozen, he/she must prove to the Court: - that there are reasonable doubts that the suspected, accused, convicted or deceased person committed the concerned criminal offences; - that assets s/he owns have obviously an illegal origin having in consideration the disproportion between his legal income and the value of these objects; - that there in an imminent danger that these assets will be used for an criminal activity, will be hidden, destroyed or disposed of, that have not been yet subject to the procedure for temporary securing of proceeds.
The prosecutor may also apply to the court for a punitive order where the assets were obtained through the commission of a crime208.
205 Article 220 of the Criminal Procedure Code.
206 State Prosecutor is in charge of coordination of the participation of other authorities such as Police, Tax Administration, Customs Administration, Office for Money Laundering Prevention, and other competent authorities.
207 Article 498 of the Criminal Procedure Code.
208 Article 445e of the Criminal Procedure Code. Page 149 of 477
If the Court is not convinced the assets have to be returned to their owner.
Where the request is granted, the State Prosecutor shall start proceedings requesting the confiscation of the illegal assets within one month following the conclusion of the investigation.
During criminal proceedings, and where proceeds of crime are concerned, the investigating judge may in the pre-trial investigation procedure order the seizure of assets209. The total duration for the freezing order may not be longer than 10 years210.
The court may issue a freezing order ex officio where it considers that the suspect may use the proceeds of suspected crimes for further criminal activities211.
2.1.1.26. Slovakia SK Nature of Procedure Main Authority Proposal/ Civil/Criminal To decide Initiative, when different from main authority to decide Criminal Presiding Judge ( law enforcement prior to criminal authority (police officer, prosecution)/ prosecutor) Prosecutor ( in pre- trial proceeding) / Court or Prosecutor (in case of freezing in order to secure forfeiture of assets of the accused person)
209 Article 502a of the CPC.
210 Article 502b of the CPC.
211 Article 502 of the Criminal Procedure Code.
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Under Slovakia’s Law, assets that are to be seized for criminal proceedings purposes, are to be surrendered by the persons owning or possessing them as requested by the police officer, the prosecutor or the Court212.
If they are not delivered upon request, these objects may be taken from that person by an order of the presiding judge prior to criminal prosecution and in the pre-trial proceedings by the order of the prosecutor or of the police office after approval of a prosecutor213.
Police officers may temporarily seize assets in the course of their enquiries and in specific circumstances where immediate action is require – i.e. to preserve evidence or prevent the commission of a crime.
Financial resources and securities suspected to be used for the perpetration of a criminal offence might be subject to seizure as well, under the same conditions214. The intervention of the Prosecutor on the phase prior to criminal prosecutions is possible under the condition that the judge for pre-trial proceeding within 48 hours confirms it.
The freezing order may be cancelled or limited upon the order of the presiding judge or in pre-trial proceeding upon the order of the prosecutor.
The same conditions apply for freezing of book entry securities.
The court and the prosecutor in the pre-trial proceeding may issue an order to freeze the assets of an accused where subsequent forfeiture of the assets is anticipated. In such case, the freezing order relates to all the assets of the accused.
2.1.1.27. United Kingdom UK Nature of Procedure Main Authority Proposal/ Civil/Criminal To decide Initiative, when different from main authority to decide
212 Section 89 of the Criminal Procedure Code.
213 Section 91 of the Criminal Procedure Code.
214 Sections 95 and 96 of the Criminal Procedure Code.
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Criminal Court (restraint SOCA, Police Forces, order)/ Police and SFO (but also all agencies Customs Officer with Financial (seizure of assets Investigation powers). subject to restraint)
There are a variety of instruments in the United Kingdom that enable law enforcement to freeze assets.
As in other countries the police may seize assets as evidence in relation to an offence. Since 30 December 2002, a customs officer or a constable may seize cash at the borders or inland if he has reasonable grounds for suspecting that the cash is recoverable property or intended for use in unlawful conduct and if the sum seized is in excess of a minimum amount of £1,000215. Seized cash may not be detained for more than 48 hours (excluding weekends, Christmas Day, Good Friday and official bank holidays) except by order of a magistrate who may extent it for another three months and a maximum of 2 years.
Under British Law, during the criminal investigation or while the criminal proceeding is going on, « a restraint order may be applied for where there is reasonable cause to believe that an alleged offender has benefited from his criminal conduct and one of the following conditions is met, namely (1) there is a criminal investigation in relation to the offence, (2) proceedings have not been concluded in relation to an offence, (3) no order was made and reconsideration of that decision is requested, (4) the defendant, whether convicted or not, has absconded or (5) an order has been made but a request for reconsideration of the amounts involved has been made ». The effect of this kind of measure is to restraint the property rights rather than freezing it because the property still remains in the hands of its owner. A prosecutor or an accredited financial investigator may apply to the court for such a measure216.
Police and Customs Officer can seize the assets subject to a restraint order to prevent its removal from the country without the recourse to the court.
215 section 294 POCA.
216 Section 40 of the Proceeds of Crime Act.
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The court may order the freezing of the property even within a proceeding for non- conviction-based confiscation.
2.1.1.28. Croatia
Nature of Procedure Nature of Procedure Proposal/ Civil/Criminal Civil/Criminal Initiative, when different from main authority to decide Investigating Judge Public Prosecutor and (before the the Plaintiff as a Private presentation of the Prosecutor indictment)/ Prosecution Body (after the presentation of the indictment and its confirmation/ Court ( during the main trial)
Under Croatian Law, the Public Prosecutor and Plaintiff as a Private Prosecutor have the possibility to ask for Security Provisory Measures (Freezing) in all stages of the procedure217.
The investigating judge will make freezing orders during the preliminary investigation stages and before the indictment.
After the indictment until its confirmation, the prosecutor will make such orders.
During the trial only the court may decide on freezing orders.
The decision on the freezing order shall state its duration.
It is possible to lodge an appeal against the freezing order within three days of its issue.
217 Article 11 of the Act on Proceeding of Confiscation of Proceeds of Crime.
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A single judge of the Higher Court will decide if the appeal is justified.
The seizure on the basis of the confiscation verdict will be decided by the municipal court that has the territorial competence within the jurisdiction of the court that has issued the verdict containing the decision on confiscation.
Summary
The possibility to freeze assets for evidence or with a view of preserving them for future compensation of victims, payment of fines or confiscation is possible in all Member States. In general freezing orders are made by a judicial authority that is an impartial and independent body. In pre-trial proceedings the freezing order is usually initiated by a public prosecutor. Freezing assets for evidence may not involve the court at the outset whereas freezing for confiscation generally involves a decision by a court/judge. In general freezing orders are maintained only if necessary. In some countries freezing orders are limited in time and must be renewed to be maintained. In the case of an emergency, police officers or prosecutors are generally authorized to seize and freeze assets provided that a judicial decision confirms the validity of the order promptly thereafter. Orders to freeze assets may generally be taken ex parte provided that those affected by them can appeal the freezing order at a later stage. In general not all of the assets of a person may be frozen. An amount corresponding to minimum sustenance is beyond the reach of the freezing order.
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2.1.2. Decision to confiscate criminal assets The Draft Directive states under its Article 3 titled “Conviction based confiscation”:
“1. Each Member State shall take the necessary measures to enable it to confiscate, either wholly or in part, instrumentalities and proceeds following a final conviction for a criminal offence. 2. Each Member State shall take the necessary measures to enable it to confiscate property the value of which corresponds to the proceeds following a final conviction for a criminal offence.”
The Council General Approach states under its Article 3 titled “Conviction based confiscation”: “1. Each Member State shall take the necessary measures to enable it to confiscate, either wholly or in part, instrumentalities and proceeds or property the value of which corresponds to such proceeds, subject to a final conviction for a criminal offence. 2. Each Member State shall take the necessary measures to enable it to confiscate property the value of which corresponds to the proceeds following a final conviction for a criminal offence.”
There will be interpretative issues with the Council General Approach on the point “, subject to a final conviction for a criminal offence”. The phrase “,subject to” introduces a conditional sentence with no reference to timing. If it meant that a conviction was first necessary before confiscation, then the following would have been written: “,subject to first”. But it does not. The use of a conditional sentence without a reference to timing creates an ambiguity on the general meaning. As a result, Article 3 under the Council General Approach will cause difficulties in its implementation and can only be read in conjunction with other parts of the proposal to help clarify its meaning. The original language of the Draft Directive made it clear that Article 3 applied post-conviction as it stated: “following a final conviction for a criminal offence”. Hence the confiscation could only occur once a conviction had be handed down.
With the Council General Approach, one interpretation will be that confiscation can occur prior to a final conviction but that it may only survive if it is confirmed by a final conviction. For some “,subject” means “following” but one would argue that the language was in fact changed to allow confiscation prior to conviction in general. Thus, a civil
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confiscation is possible and accepted provided that it is confirmed or followed by a conviction. This ambiguity is likely to cause misunderstandings and obstacles to the efficiency of mutual recognition.
Final confiscation orders are usually part of a judgment. Based on the information supplied, it is only in the Netherlands that it is a separate decision from the main judgment.
In general an appeal is made not only against the confiscation but against the whole judgement.
Depending on the country or proceedings, a confiscation can be considered: a penalty, a debt to the State, a transfer of illegally obtained assets, a means of placing, from a wealth perspective, the criminal back in the situation in which he/she would have been if he/she had not committed the offence.
In some countries the confiscation amount will be based on a strict evaluation of the proceeds of crime. In others, it will be a mixture taking into account the gravity of the offence on top of the proceeds of the crime.
All Member States except three apply the confiscation measures according to criminal procedure rules. In Romania both civil and criminal procedures apply.
Nature of Procedure MS Criminal Civil AT BE BG CY CZ DE DK EE EL ES
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FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK
In all Member States the confiscation order is issued by a judicial authority.
Generally, the court acts ex officio and in few cases, the decision of the court is based on the request of prosecution (9 out of 28 Member States).
Deciding Authority MS Court Public Prosecutor AT BE BG CY CZ DE DK EE EL ES
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FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK
Generally, the confiscation order is part of the conviction decision or a follow-up on such decision. In very few cases, the confiscation order can be adopted ex parte. The authority making the decision on confiscation is almost always a judge. The initiative for the confiscation is also most often a judge.
Proposal/Initiative MS Ex-Officio Public Prosecutor Other AT BE BG CY CZ DE DK EE
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EL ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK (criminal) (civil) UK
Below is a detailed per country presentation of the processes involving confiscation orders.
2.1.2.1. Austria AT Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court judging the Ex-Officio accused
In Austria, the decision on confiscation, forfeiture, extended forfeiture and recovery is integrated as part of the Criminal Verdict on Judgment of the Accused218.
218 Section 443 and following of the Austrian Criminal Procedure Code.
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The decision is made by the competent Court, ex officio.
An application from the prosecutor is not necessary.
2.1.2.2. Belgium BE Nature of Procedure Main Authority Proposal / Initiative Civil/Criminal To decide
Criminal Court Own Motion of the Court
In Belgium, the decision on confiscation is adopted by the court conducting the criminal proceedings. The competence of the Court is determined according to the seriousness of the offence.
The decision on confiscation is part of the verdict on conviction.
2.1.2.3. Bulgaria BG Nature of Procedure Main Authority Proposal/Initiative Civil/Criminal To decide Civil Court Commission for Establishing Property Acquired from Criminal Activity
In Bulgaria, there is a different procedure for confiscation and civil forfeiture.
Customs and police may confiscate assets that have been used to commit crimes and that they identify during their investigative role.
The civil forfeiture procedure is used to transfer, in favour of the State, property that has directly or indirectly been acquired from a criminal activity. In this context, when the conviction becomes enforceable, the territorial director draws a motivated report specifying which property would reasonably be assumed to have been acquired from a criminal activity and should be subject to forfeiture. Based on this report, the Commission
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for Establishing Property Acquired from Criminal Activity (CEPACA) presents a claim on assets forfeiture to the competent Court. The procedure is civil and follows the Civil Procedure Code. The Decision of the court may be appealed.
2.1.2.4. Cyprus CY Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Ex-officio
According to Cyprus Law, when convicting someone for a criminal offence related to money laundering, the competent Court will, before sentencing, determine whether the accused person has acquired any proceeds from the commission of the predicate offence219. Based on this determination, a confiscation order for relevant assets may be issued.
2.1.2.5. The Czech Republic CZ Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Own motion of the Court
When the Court has found the accused guilty, it can decide the confiscation of the proceeds of crime or his/her property, as part of the punishment.
2.1.2.6. Germany DE Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide Criminal Court Own Motion
In Germany, the order on confiscation is adopted by the Court that has convicted the
219 Section 6 of the Prevention and Suppression of Money Laundering of Unlawful Activities Act.
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offender of the criminal offence.
If conditions for confiscation of a third party assets are fulfilled, an order on forfeiture will be part of the judgment. In such a case, the third party will be involved in the proceeding concerning the accused. Otherwise, a separate proceeding will be instituted against the third party alone. The order shall specify the objects concerned by the forfeiture.
All legal remedies existing against the verdict on conviction apply to the confiscation order.
While awaiting the judgment to become final, the order consists in the prohibition to sell the concerned assets. When the judgment becomes final, the property or the right becomes property of the State.
2.1.2.7. Denmark DK
Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Own motion of the Court
The decision on confiscation is adopted by the Court during the sentencing. The confiscation order is part of the conviction. The confiscation order may be appealed under the same conditions as the conviction220.
2.1.2.8. Estonia EE Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Public Prosecutor
220 Administration of Justice Act.
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Under Estonian Law, the investigative body is required to collect evidence on a potential confiscation and is required to present to the public prosecutor a summary of the confiscation procedure221.
Based on this, the public prosecutor will then file an application for confiscation with the Court, which will then decide on the confiscation. This decision is made during criminal proceedings222.
Copies of the application for confiscation will be sent to the accused or convicted offenders, their legal representatives and third Parties (if a third party assets is concerned).
The confiscation order may be appealed by the owner of the assets if he finds that his/her rights were not respected.
An appeal can be lodged by the public prosecutor against a Court decision rejecting a request for confiscation.
2.1.2.9. Greece EL Nature of Procedure Main Authority Proposal/ Initiative Civil/ Criminal To decide Criminal Court Ex-officio
The decision on confiscation is adopted by the Court that has adopted the final judgment on the criminal proceeding.
The persons concerned by the confiscation order are promptly informed of the decision in accordance with the rules applicable for the communication of decisions issued by criminal courts.
The concerned persons have the right to appeal the confiscation measures integrated as
221 Article 403 of the Estonian Criminal Procedure Code.
222 Article 306 of the Estonian Criminal Procedure Code.
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part of the judgment. Legal remedies can be used on the same conditions as those foreseen for the appeals regarding the judgments of Criminal Courts in general.223
2.1.2.10. Spain ES Nature of Procedure Main Authority Proposal/ Initiative Civil/ Criminal To decide Criminal Competent Criminal Ex-officio Court / Central Criminal Court in case of terrorism and drug trafficking
The general principle is that the competent authority to adopt a confiscation order is the Criminal Court that has jurisdiction based on where the assets are located. There is an exception to this in cases of confiscation of proceeds of terrorism and drug trafficking offences. In such cases the Central Criminal Court holds exclusive competence.
The subjects of confiscation orders are informed of these measures when the verdict is rendered. They may appeal against the confiscation order in the same manner as any other criminal judgment.
2.1.2.11. Finland FI Nature of Procedure Main Authority Proposal/ Initiative Civil / Criminal To decide Criminal Court Ex-officio
Confiscation power is a prerogative of Courts.
The affected persons are immediately informed and they have the right to appeal the Court Decision. The appeal does not suspend the execution of the Decision.
223 Articles 462, 477 and 504 of the Criminal Procedure Code.
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2.1.2.12. France FR Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Own initiative/ Request of the Public Prosecutor
In France, confiscation is considered as a criminal sanction and it cannot be ordered outside a Court Judgment.
The competence of the Criminal Court will depend on the nature and gravity of the offence. Therefore, the Police Court will decide on confiscation measures related to proceeds obtained by minor offences, the Magistrate’s Court (Tribunal Correctionnel) regarding confiscation of proceeds obtained from a misdemeanour, and the Jury Court (Court d’Assises) concerning the confiscation of proceeds of crime. The confiscation is not mandatory and the judge will decide on its own motion on this.
The person affected by a confiscation order may appeal from the confiscation order provided that they appeal from the whole judgment. 2.1.2.13. Hungary HU Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Ex-officio
Decision on confiscation is usually part of the judgment on conviction and it has to be adopted by a Criminal Court. The confiscation is considered as a penalty224.
The decision on confiscation shall become final if no appeal is filed against the judgement on conviction.
224 Section 330 of the Criminal Procedure Act.
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2.1.2.14. Ireland IE Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Public Prosecutor
In Ireland, there are two possibilities to file an application for confiscation order: one in the context of general confiscation225 and a special one applying in the area of drug trafficking226.
For special confiscation, the Director of Public Prosecution is entitled to bring an application for an order of confiscation against an accused suspected for having profited from drug trafficking. This is applicable in the post-conviction stages of the proceedings. The Court reviews the application taking into consideration other fines or forfeitures already pronounced against the convicted offender227.
For other criminal offences, an application for a confiscation order may be filed by the Prosecutor and the Judge will decide in his/her discretion whether to grant it.
The person affected by these measures is mentioned on the application brought by the Public Prosecutor to the High Court for enforcement of the confiscation order. Confiscation orders may be appealled to the High Court.
2.1.2.15. Italy IT Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Own initiative of the Court
225 Section 9 of Criminal Justice Act.
226 Section 4 of Criminal Justice Act.
227 Section 25 of Criminal Justice Act.
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A confiscation order is issued by the Criminal Court at the end of the trial proceedings.
Persons concerned are summoned to take part in the proceeding and make their arguments. If the concerned person is a third party, a notification is sent out in order to allow his/her participation at the trial.
The concerned person may appeal the confiscation order to the territorial court as concerning the matters of law or facts, and then to the Supreme Court of Cassation as concerning matters of law.
2.1.2.16. Lithuania LT Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Own initiative
Confiscation of property may be decided only by the Court.
The owner of the property subject to confiscation has the right to appeal against the decision of the Court.
2.1.2.17. Luxembourg LU Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Own initiative
In Luxembourg, confiscation is a penalty. Therefore, the confiscation of seized assets can only be decided by a Criminal Court.
The accused, as the affected person, is informed of the hearing and summoned to attend.
He/she is entitled to use all legal remedies foreseen by the law for any penalty.
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2.1.2.18. Latvia LV Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Ex-officio
Criminally acquired property may be confiscated by order of a Court.
2.1.2.19. Malta MT Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Own Initiative
In Malta, confiscation of criminally obtained property is mandatory, which means that the Court is obliged to order confiscation any time it is demonstrated that the offender has profitied from the offence228.
2.1.2.20. Netherlands NL Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Public Prosecutor
In the Netherlands, confiscation measure on illegally obtained profits is an obligation imposed to the offender to pay a sum of money to the State.
The decision is taken by the Court upon the proposal of the public prosecutor.
The Court’s decision is taken as a separate decision from the judgement that has convicted the offender for the criminal offence.229
228 Article 23B of the PMLA.
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2.1.2.21. Poland PL Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Own initiative
Under Polish Law, confiscation order may be adopted either as part of a judgment convicting the accused, as part of the judgment conditionally discontinuing the proceeding or by a separate decision of the Court.
A Constitutional principle provides that confiscation may be ordered only by a Court.
The affected person is informed of these measures and has the right to appeal against these decisions according to the rules and conditions usually applicable to criminal proceedings.
2.1.2.22. Portugal PT Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Public Prosecutor
Portuguese Law provides for a specific system of confiscation. Value confiscation is used rather than the direct confiscation of proceeds of crime. As a result, one can say that in Portugal the confiscation is based both on the seriousness of the offence as such and the actual proceeds of the crime.
At the time of sentencing, the public prosecutor evaluates and fixes an amount to be confiscated in favour of the State. The fixing of the amount is possible up to the 30th days prior to the day of the first trial audience. It can be amended if, at a later stage, it turns out to be inaccurate.
229 Article 36e of the Criminal Code.
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The Court informs the defendant of the amount of the confiscation proposed by the Prosecutor. On conviction, the Court states the final amount to be confiscated.
If the defendant does not pay the amount of confiscation voluntarily, any seized assets will be confiscated for an amount equivalent to that needed.
2.1.2.23. Romania RO Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Public Prosecutor By confirming the (during the confiscation measures preliminary adopted by the Public investigation) / Court Prosecutor or by its own initiative Under Romanian law, confiscation is considered a safety measure and not a punishment.
Therefore, confiscation of the products acquired via an offence is mandatory and can be decided either by the prosecutor during the criminal investigation phase if he/she decides not to ask for a conviction or by the Court when the prosecutor has requested indictment. 2.1.2.24. Sweden SE Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Public Prosecutor
The confiscation procedure in Sweden is initiated by a Prosecutor’s claim for confiscation. The confiscation order is then issued by the Court within the criminal proceeding deciding on guilt.
In case of conviction, the Court will decide to confiscate either the estimated value of the proceed of the crime or the property considered as the proceeds of crime, which will be sold according to the enforcement rules, once the sentence becomes final. Page 170 of 477
2.1.2.25. Slovenia SI Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Civil Court State Prosecutor
In Slovenia, confiscation procedure is conducted according to the provisions of the Civil Procedure Act230. This is a civil procedure that is based on a prior criminal conviction.
The procedure is initiated by a request filed by the public prosecutor, member of the Specialized Office of the State Prosecution, at the District Court in Ljubljana.
The Court will check if third parties may be affected by the proposed confiscation measures and if they are attending the proceedings. Otherwise, the Court notifies any absent third party and allows them one month to make their positions known and participate in the proceedings.
The start of a confiscation procedure suspends all other legal procedures regarding the concerned assets. Creditors may, within two months after the adoption of the decision on confiscation, make a claim to be paid from the pool of the confiscated assets.
When the decision on confiscation becomes final, the concerned assets become property of the Republic of Slovenia.
2.1.2.26. Slovakia SK Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal for conviction based Court Petition of the confiscation Prosecutor in case of civil Civil of extended confiscation confiscation
230 The Confiscation of Property of Illicit Origin Act (Official Gazette of the Republic Slovenia, No. 91/2011)
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Slovakian Law provides for different forms of confiscation as sanctions for committing a criminal offence, such as confiscation of property, confiscation of items and protective measures of confiscation.
The competent authority for those sanctions is the Court.
The affected persons are informed of these measures and can lodge appeals.
2.1.2.27. United Kingdom UK Nature of Procedure Main Authority Proposal/ Initiative Civil/Criminal To decide
Criminal Court Prosecutor
In the United Kingdom, the conviction based confiscation order is issued by the Crown Court upon the request of the Prosecutor asking the Court to consider if it is appropriate to make a confiscation order. No notice is required for this231.
2.1.2.28. Croatia
Nature of Procedure Nature of Procedure Proposal/ Initiative Civil/Criminal Civil/Criminal
Criminal Court Ex-Officio
The conviction-based-confiscation in Croatia is decided by the Criminal Court with the verdict declaring the accused guilty for the commission of the criminal offence232.
The decision on confiscation is part of the verdict and must be motivated and specify the object and the monetary value that is going to be confiscated.
231 Section 6 (3) of Proceeds of Crime Act.
232 Article 560 of the Croatian Criminal Procedure Law and Article 5 of the Act on Proceeding for Confiscation of Proceeds of Crime.
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The affected persons will be notified a copy of this verdict and have the right on appeal according to the regular rules of appeal on criminal proceedings233.
Summary
Confiscation orders can be made at different stages of the proceedings. They can be made in respect to: 1/ crime instrumentalities 2/ proceeds of crime 3/ the need to compensate victims of crimes 4/ as a penalty for engaging in criminal activities Confiscation orders are not taken ex parte. In general, confiscation orders are decisions rendered by judges either at the investigative stage or at the trial stage. In some countries confiscation orders are mandatory once a person has been convicted. The courts have some leeway in the determination of the amount to be confiscated. In some countries restrictions on confiscations exist for historical reasons. This is particularly true of countries which were part of the Eastern Block. Appeals against confiscation orders are possible in all Member States. In some Member States the appeal must be made against the decision on conviction as a whole and not just the confiscation order. Affected third parties are notified of confiscation orders and may participate in proceedings.
2.2. Competent enforcement authorities The sections below provide information on the authorities competent for purposes of the identification, monitoring, enforcement and management of frozen or confiscation assets.
233 Article 561 of the Croatian Criminal Code.
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Much effort and improvements have occurred in the last few years in enhancing the identification, monitoring and management of criminal assets and enforcement of freezing and confiscation orders.
Even though the financial crisis has had an effect on resource availability, the progress made in effectively confiscating assets in some Member States has generated on its own accord important resources for Member States to push ahead in the fight against organized crime.
Many countries have created specialized agencies in order to target efforts and enhance transparency and accountability.
Asset Recovery Offices and Financial Intelligence Units have been created and developed in most Member States. Even if they are still going through a teething process, these units or offices have made significant contributions in the fight against organised crime both on internal, European and international levels.
However, clearer competences to avoid overlaps and enhance resource utilization and the elaboration of fluid systems of information flows between departments and authorities234 should enhance further the effectiveness of the confiscation of proceeds of crime processes.
2.2.1. Competent authorities identifying criminal assets
Identification Authority based on Authority based on Resolution of Member Main Authority ratione loci a ratione materiae concurrent States (if any) competence competence jurisdiction issues
AT Criminal police N/A Criminal police The King’s Prosecutor/ Central Organised BE N/A N/A N/A Economic and Financial Crime Office (OCDEFO)
234 See Council of the European Union, “Final Report in the Fifth Round of Mutual Evaluations – “Financial Crime and Financial Investigations””, 12657/2/12 REV 2, GENVAL 51, Brussels 3 October 2012.
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Commission for Establishing of BG Property Acquired N/A N/A N/A from Criminal Activity (CEPACA) CY MOKAS N/A N/A N/A
Police authority Specialised police Cooperation CZ (possibly supported by a forces (drug or among police specialised financial organised crimes and authorities. investigator) financial criminality). Public Prosecution DE N/A N/A N/A Office DK Police N/A N/A N/A
Local investigative EE Investigative body N/A Prosecutor´s office body
Police, FIU, Authority for Judicial Combating Financial EL N/A N/A Investigative Crime (SDOE) and Authorities the ARO National Police and Civil Guard, Prosecutors and ES N/A N/A N/A Examining Magistrates with the ARO Pretrial Pretrial Police-Customs- Pretrial investigation investigation investigation Border Guard Criminal authority - police, FI authority - police, authority - police, Intelligence Structure customs or border customs or border customs or border and Operational guard and FIU guard and FIU guard and FIU Steering Group Identification Platform of Every specialised FR N/A N/A Criminals Assets enquiry services (PIAC) State Attorney of County State's County State's the Republic of Attorney and Attorney and HR N/A Croatia and Police Municipal State's Municipal State's authorities Attorney Attorney
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Investigative authority Police and the designated by the Local and county National Tax and prosecutor Police / Directorate Customs General for Criminal Administration of Prosecutor: Affairs of NAV Hungary or NAV (in Principle of cases involving financial preceding The investigating Prosecutor where the and other specific types authority or Authority, the of crimes) HU court operates designated by the Prosecutor, the superior Court Prosecutor where Court where the the court operates prosecutor crime has been committed, with Court: nature and - Court: Principle of exceptions gravity of the crime preceding committed authority or designated by the superior court
Director of Public Prosecutions (criminal) or The IE N/A N/A N/A Criminal Assets Bureau or CAB (civil) Administrative Authority: Questore in the province and director of the Anti- Mafia Investigation Department (DIA), in the whole national IT N/A territory. N/A N/A
Judicial Authority: “Procuratore della Repubblica” of the district capital and National anti-Mafia Prosecutor Specific organisms Police Prosecutor’s Office LT N/A related to the type designates of incrimination Police and LU Investigating N/A N/A N/A magistrate
Investigator Public LV N/A N/A N/A Prosecutor
Executive Police, Internal Audit and Attorney General Financial MT N/A N/A and Investigations Unit Financial for public funds Page 176 of 477
Intelligence Unit
Police and Public NL Prosecution N/A N/A N/A Service Specific authorities Police generally PL Police, ARO, FIU N/A of preparatory competent for all proceedings investigations -North Branch (Porto) -Center Branch Assets Recovery PT (Coimbra) Office (GRA) -South Branch (Faro)235 Investigating Police National Office for Police according to determined by the RO Crime Prevention the competence of Prosecutor location of the crime and (ARO) prosecutorial offices or the arrest
SE Prosecutor N/A N/A N/A
SI State Prosecutor N/A N/A N/A
SK N/A Police or Prosecutor N/A N/A
UK ARO N/A Prosecutor N/A
Monitoring Resolution of Authority based Authority based on a Member concurrent Main Authority on ratione loci ratione materiae States jurisdiction competence competence issues
AT Public prosecutor N/A Public prosecutor N/A The King’s Prosecutor/ Central BE Organised Economic N/A N/A N/A and Financial Crime Office (OCDEFO) BG CEPACA N/A N/A N/A CY MOKAS N/A N/A N/A
235 The geographic competence of the GRA matches that of the Judiciary Police directories where they are based and of the departments of criminal investigation depending of them.
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District courts in Cooperation Court or a judge in CZ N/A the district of the among judicial pre-trial proceedings public prosecutor authorities. Public prosecution DE N/A N/A N/A office
DK Police N/A N/A N/A Prosecutor´s EE Investigative body N/A Investigative Body Office EL N/A N/A N/A N/A CICO (Intelligence Centre against Organised Crime), Military Police and the Custom ES N/A N/A N/A Surveillance Service of the Ministry of Economy and Finance with the ARO Enforcement FI Authority PIAC and the Agency for the management and FR N/A N/A N/A restitution of seized and confiscated assets (AGRASC) Court Court where Municipal courts or offence HR County courts N/A committed (importance of the
offence)
Investigating See Investigations See Investigations See Investigations HU Authority, Prosecutor, Court IE D.P.P. and CAB. N/A N/A N/A IT
Prosecutor’s LT Prosecutor N/A N/A Office Prosecutor/FIU/ LU Investigating Authority Investigating LV Prosecutor Executive Police Attorney General MT N/A N/A N/A and Financial Intelligence Unit Dutch criminal NL N/A N/A N/A assets deprivation
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Bureau Public Prosecution Service Specific units for PL Police/ FIU N/A N/A special infractions -North Branch (Porto) Asset Recovery -Center Branch PT Office (Coimbra) -South Branch (Faro)236 National Office for RO Crime Prevention ARO ARO ARO and ARO SE Prosecutor N/A N/A N/A SI State Prosecutor N/A N/A N/A Law Enforcement SK N/A Authority N/A N/A (police officer, prosecutor) Prosecuting Accredited Financial UK Authority N/A N/A (Crown Prosecution Advisor Service)
2.2.2. Competent authorities enforcing orders to freeze and/or confiscate criminal assets 2.2.2.1. Enforcing freezing orders
Enforcement of freezing Resolution of Authority based on Authority based on Member concurrent Main Authority ratione loci a ratione materiae States jurisdiction competence competence issues Public Prosecutor AT directs and Criminal N/A N/A N/A Police performs Court or Justice BE Federal Public N/A N/A N/A Services BG CEPACA N/A N/A N/A Unit for Combating CY Money Laundering N/A N/A N/A (FIU)
236 The geographic competence of the GRA matches that of the Judiciary Police directories where they are based and of the departments of criminal investigation depending of them.
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Police Authority of Police authority of See Monitoring CZ N/A a prosecutor a prosecutor Court and Public DE Prosecution Office N/A N/A N/A (depends of the measure) DK The police N/A N/A N/A Court based on the N/A County court based The EE request of on the request of Prosecutor's Prosecutor’s Office District Prosecutor Office decides SDOE, N/A SDOE, President of N/A EL Judicial Authorities, the FIU President of the FIU Pre-trial Judge of Central the places where ES N/A Investigative N/A the assets are Judges (in cases of located terrorism and drugs) FI See below See below See below Judicial Police Officer (under authority of FR N/A N/A Public Prosecutor, N/A Magistrate for custody and release or Investigating Magistrate) Court conducting Court where Municipal courts or HR criminal offence committed County courts N/A proceedings Investigating See Investigations See Investigations See HU Authority, Investigations Prosecutor, Court The D.P.P. (primary authority) or the Central Authority, IE at the Department N/A N/A N/A of Justice, and the Chief State Solicitor or CAB IT N/A Court N/A N/A Prosecutor’s LT Prosecutor N/A N/A Office Investigative LU N/A N/A N/A Authority Investigative LV N/A N/A N/A Prosecutor Executive Police MT and Attorney N/A N/A N/A General Public Prosecutor NL and Investigative N/A N/A N/A judge
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Police (temporary seizure in exigent circumstances), FIU Specific organisms (suspension of PL transaction or freezing N/A for special N/A of bank account), infractions Prosecutor’s Office, Court The authority Any legal authority responsible for the Public Prosecutor or OPC’s, including investigation of the (to authorize/ PT the Assets infringements that order/ Recovery Office originate the and validate) advantages Prosecutor Offices around the competent Court Authority where Or District courts, Superior RO Prosecutor or Court goods located tribunals, appellate authority courts, or even the High Court of Cassation Prosecutor and SE N/A N/A N/A Court SI Court N/A N/A N/A Office of the SK N/A Prosecutor N/A General Prosecutor Prosecuting authority (Crown Accredited UK N/A N/A Prosecution financial advisor service)
In Finland the enforcement for the freezing of assets is complex. The following explains in detail how this is organized.
According to Section 5 of the EU Freezing Act the following authorities are competent to carry out prosecution duties relating to the execution of a freezing order:
(1) A district court prosecutor acting in the judicial district of the Helsinki District Court, if the property or evidence which is the subject of the freezing order is situated in the territorial ambit of the Helsinki Court of Appeal or the Kouvola Court of Appeal; (2) A district court prosecutor acting in the judicial district of the Kuopio District Court, if the property or evidence which is the subject of the freezing order is situated in the territorial ambit of the Court of Appeal of Eastern Finland;
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(3) A district court prosecutor acting in the judicial district of the Oulu District Court, if the property or evidence which is the subject of the freezing order is situated in the territorial ambit of the Rovaniemi Court of Appeal; (4) A district court prosecutor acting in the judicial district of the Tampere District Court, if the property or evidence which is the subject of the freezing order is situated in the territorial ambit of the Turku Court of Appeal or the Vaasa Court of Appeal.
If the property or evidence is situated in the territorial ambit of several Courts of Appeal as referred to under 1) to 4) above, the location of the property or evidence is not certain or for any other particular reason, any district court prosecutor as mentioned under 1) to 4) is competent regardless of the Court of Appeal in whose territorial ambit the property or evidence is situated.
For particular reasons the competent prosecutor may be another prosecutor than referred to above.
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2.2.2.2. Enforcing confiscation orders
Enforcement of confiscation Authority Authority based Resolution of Member based on on a ratione concurrent Main Authority States ratione loci materiae jurisdiction competence competence issues AT N/A Court N/A N/A Justice Federal BE N/A N/A N/A Public Services BG CEPACA N/A N/A N/A CY FIU N/A N/A N/A Recognition of a foreign A district or judgement Art Court where regional court 54 etc. of the Public deciding in a SIT or relevant CZ N/A Prosecutor criminal matter provisions of lodged the based on material other indictment. competence international treaties or domestic law. Court and Public Prosecution DE N/A N/A N/A Office (depends of the measure) DK Police N/A N/A N/A Prosecutor's Court Office decides EE (based or not on the N/A County court on the request of Prosecutor’s Office) jurisdiction pursuant Courts/Judicial EL N/A N/A N/A Councils Criminal Central Criminal Courts where Court (in ES N/A N/A the assets are terrorism and located drug trafficking) FI District Court District Court District Court District Court
Criminal Court (Police court or "Tribunal FR AGRASC N/A correctionnel" N/A depending to the importance of the felony)
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proceedings felony) See See HU Court See Investigations Investigations Investigations Circuit Court IE D.P.P. N/A (drug-trafficking) N/A
IT Court Court District Court District Court and LT and Prosecutor’s N/A N/A Prosecutor’s Office Office LU Court N/A N/A N/A LV Judge N/A N/A N/A MT Court N/A N/A N/A NL Judge N/A N/A N/A PL Court N/A N/A N/A Criminal court that judges the Criminal Courts of PT Court infringements 1st Instance that originate the confiscation Authority Prosecutor or where goods Superior RO N/A Court are located authority (with exceptions) National SE Enforcement N/A N/A N/A Authority SI Court N/A N/A N/A SK N/A Court N/A N/A Prosecuting authority UK (Crown N/A N/A N/A Prosecution service)
2.2.3. Competent authorities managing frozen and/or confiscated criminal assets
Management Resolution of Authority based on Authority based on a Member concurrent Main Authority ratione loci ratione materiae States jurisdiction competence competence issues
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AT Public Prosecutor N/A Public Prosecutor N/A Central Body for BE Seizure and Confiscation (OCSC) BG CEPACA CY FIU N/A N/A N/A Police or Office of the CZ N/A N/A Government N/A Representation in Property Affairs. Relevant prosecutors, assisted by Asset Recovery Units of the DE Police forces, courts for compulsory measures DK Police N/A N/A N/A Local investigative Investigative body/District body/Prosecutor’s Prosecutor’s EE N/A N/A Office/Court/Local Office/County Government Court/Local Government Secretary of the EL N/A Coast Guard N/A Court Judge, Court, and ES National Plan on N/A N/A N/A Drugs. Enforcement Enforcement Enforcement Enforcement FI Authority Authority Authority Authority FR AGRASC N/A N/A N/A Central Office for State Property HR N/A N/A N/A Management, the Agency Investigating See Investigations See Investigations See Investigations HU Authority, Prosecutor, Court Appointment by D.P.P of a receiver to manage frozen assets IE N/A N/A N/A or a receiver to manage domestic freezing orders National Agency for the goods seized or IT confiscated from N/A N/A N/A criminal organizations
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Person nominated by Prosecutor’s LT N/A N/A Prosecutor Office State’s Consignment LU Office (Caisse de Consignation)237 LV Ministry of Justice MT Garnishees Dutch criminal assets deprivation Bureau NL N/A N/A N/A Public Prosecution Service Prosecutor’s Office, PL N/A N/A N/A Court Assets Administration Directive Council of Office (GAB) of the The IGFIJ, I.P. the Institute of Institute of Financial based in Lisbon PT Financial of Infra- Management ando of manages the all Structures of Justice, , Infra-Structures of assets I. P. Justice I. P.238 Authority that applies the freezing measure, the Criminal investigation body or the Judicial executor RO must identify and N/A N/A N/A evaluate the assets (with a possible assistance of the National Agency for Fiscal Administration (ANAF)) Seized evidence is managed by the police. Other SE property is managed by the Enforcement Authority. The Court and State Attorney’s Office SI (deals with creditor N/A N/A N/A requests for payment from the confiscated assets) Respective authority SK N/A performing the N/A N/A administration of state property Prosecuting authority UK N/A N/A N/A (Crown Prosecution
237 http://www.te.public.lu/caisse_consignation/index_html
238 For amounts above 5100 Euros
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service)
2.2.4. Implementation of regulations and case law The following country per country presentation seeks to provide detailed practical information on the implementation of current regulations in the enforcement of freezing and confiscation orders.
AT
Identification, Location Everyone is obliged to release assets, And Tracing of Criminal subject to seizure, when so requested by Assets the criminal police and to enable a seizure in any other way. This obligation may be enforced by a search of person or premises (Section 111 para 1 ACCP).
A seizure has to be carried out by the Tools used to criminal police due to an order of the freeze and confiscate public prosecutor (Section 110 § 2 ACCP). In several cases (Section 110 § 3 ACCP) the criminal police is enabled to act on its own motion. Confiscation, forfeiture and extended forfeiture are penalties and exist next to prison sentences and monetary sentences. Accordingly it has to be ordered by the Court in the final penal judgment.
According to Section 114 ACCP the criminal Management, distribution and police is in the first run responsible for the transfer of assets management of assets of a seizure. After the criminal police have informed the public prosecutor about the seizure, the public prosecutor takes charges of the assets.
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Costs related to the guarding, maintaining This is born by the State. and protecting the value of the assets
BE Identification, Location If the assets cannot be found at the place And Tracing of Criminal indicated by the certificate or if the place Assets of the assets or the elements of evidence have not been indicated in a precise way, the implementing authority consults the issuing authority.
The judicial decision which implementation Tools used to freeze and confiscate has been ordered by a judicial authority will be implemented regarding Belgian law.
Management, distribution and N/A transfer of assets
Accordingly to article 61 sexiest of the Costs related to the guarding, maintaining criminal investigation Code, the and protecting the value of the assets Investigating Judge may authorize the central body for the seizure and confiscation to proceed to the disposal of the assets or to return them by paying a sum. Prior consultation is required on this topic by the competent authority of the issuing State.
BG
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TT The police, the prosecution and the Identification, Location Courts are supposed to hand down And Tracing of Criminal information for newly opened investigations Assets or for cases where the Courts have issued a sentence. Once the information is received, the Commission makes an initial check that aims to assess whether the person has assets valued more than 60 000 BGN /€ 30 700 approx./. On the basis of the evidence gathered by the inspectors from the territorial departments, the Commission comes out with a decision to start proceedings for identifying of property acquired from criminal activity. Within this procedure the inspectors are empowered: to check the property of the investigated person, the legal grounds for its acquisition and its value, the income and tax returns of the investigated person, his/her ordinary and extraordinary expenses, etc. Apart that, the inspectors may also demand explanations from investigated person, appoint forensic experts and gather written evidence.
Where enough evidence has been gathered Tools used to freeze and confiscate when identifying the assets acquired from criminal activity, the Commission makes a motivated application to the Court for the imposing of freezing orders following procedures envisaged in the Civil Procedure Code. When the defendant has been convicted and the conviction from the criminal proceedings comes into effect, the Commission’s territorial director draws, on the basis of the gathered evidence, a
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motivated conclusion which specifies the type and amount of the property which could be reasonably assumed to have been acquired from criminal activity and which should be subject to assets forfeiture, as well as the evidence verifying the presented circumstances. On the basis of the report and evidence the Commission applies to the Court for assets forfeiture. The asset recovery proceedings are held according to the rules of the Civil Procedure Code.
Recently a new institution was established: Management, distribution and the Inter-institutional Council for Managing transfer of assets Sequestered Assets (ICMSA). The main function of the Council focuses on making proposals (i) for the redistribution of confiscated/forfeited assets, (ii) to donate them to humanitarian causes or (iii) to task someone with their sale.
Costs related to the guarding, maintaining This is born by the State and protecting the value of the assets
CY Requests can be made to FIU-ARO Cyprus Identification, Location that is MOKAS. MOKAS may use the tools of And Tracing of Criminal the AML Law e.g. Disclosure Orders for bank Assets accounts or use data which has direct or indirect access e.g. land registry, shares, etc, proceeds to the identification of assets.
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The FIU may order the bank to postpone a Tools used to freeze and confiscate transaction (section 55 (i) (e) or proceed with an application to a Court for domestic freezing orders or with an application to a Court for the registration and enforcement of foreign Orders.
Management, distribution and Relevant provisions are contained in the transfer of assets AML Law. Section 43 H A (5) for freezing of assets. Management of frozen assets sections 14 (7) Costs related to the guarding, maintaining (8) (9) (10) (11). and protecting the value of the assets A receiver is appointed for confiscation purposes sections 17, 18, 19 of AML Law.
CZ It is the task of police authorities. Identification, Location And Tracing of Criminal Assets Once the seizure (freezing) order has been Tools used to freeze and confiscate issued by a public prosecutor or by the police authority with the consent of a public prosecutor, it is up to police authority to enforce it.
The management of seized assets is Management, distribution and organized by police authorities or the transfer of assets Office of the Government Representation in Property Affairs. Seized assets can be sold without the consent of accused person only in following cases: a) there is a risk of destruction of assets or other damage,
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b) assets are losing considerable value despite due care, c) the accused escaped or went into hiding.
In principle, the authority that has decided Costs related to the guarding, maintaining on the seizure bars costs. It is up to and protecting the value of the assets authority that carries out the management of seized assets to maintain and protect the value of the seized assets.
DE The authority for identification, location Identification, Location and tracing of criminal assets is divided And Tracing of Criminal between the police and the enforcement Assets authority. The obligation for the pre-trial investigation authorities (police, customs and border guard) to trace proceeds of crime is based on Section 5 of the Criminal Investigations Act. Tracing the proceeds of crime is part of the pre-trial investigation. The enforcement authority may also identify, locate and trace property in order to execute orders.
These orders are executed by forfeiture. Tools used to freeze and confiscate Forfeiture means the recovery of what the perpetrator acquired by criminal offence or the recovery of its commission. It is executed by attachment in rem.
The enforcement authority executes Management, distribution and restraint or freezing orders (CMA 3:8; transfer of assets Enforcement Code). The authority in question (pre-trial
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investigation authority or enforcement authority) is responsible for the management of the assets (CMA 4:10, Enforcement Code). The Court order is delivered to the Legal Register Centre, which will be use by the police to enforce the order for the confiscation of objects. If value is confiscated, the Legal Register Centre will ask the enforcement authority to enforce the confiscation order. (Act 672/2002 on Legal Register Centre.
The authority in question (pre-trial Costs related to the guarding, maintaining investigation authority or enforcement and protecting the value of the assets authority) is responsible for costs related to the guarding, maintaining and protecting the value of the property or assets and overall management (CMA 4:10, Enforcement Code).
DK The identification, monitoring and seizing Identification, Location of assets are part of the financial And Tracing of Criminal investigation carried out by the police. Assets Seizure requires in most cases a Court order. Confiscation orders are issued by the Courts. Theirs enforcement is carried out by the police.
Provisions of the Administration of Justice Tools used to freeze and confiscate Act together with provisions of the Criminal Code, as well as the implemented provisions of the European Union and
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international agreements.
In Denmark there is no legal basis for assets Management, distribution and management, but once the assets have transfer of assets been seized, the police are responsible for managing them.
Costs related to the guarding, maintaining In general, the public treasury covers these and protecting the value of the assets costs.
EE The identification, location and tracing of Identification, Location Criminal Assets are on the responsibility of And Tracing of Criminal the Police and Border Guard Board, which Assets follow specific investigative guidelines.
Tools used to freeze and confiscate Investigative guidelines have been created to identify, certify and assess assets. During the pre-trial investigation the Management, distribution and investigator is responsible to give frozen (or transfer of assets taken) goods to the logistics bureau of the police or a specialized depot (located inside of police building). The logistics bureau of the police is responsible for preserving frozen assets.
According to the Code of Criminal Costs related to the guarding, maintaining Procedure and in the case of a conviction, and protecting the value of the assets the convicted offender shall compensate procedural expenses.
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EL
Identification, Location Reports of suspicious transactions by the And Tracing of Criminal financial sector to the FIU, searches in Assets premises, police investigations etc.
With regard to freezing assets see Art. 48 Tools used to freeze and confiscate pars 1-3 Law 3691/2008. Seizure of movable or immovable assets is regulated by Arts 261 ff. of the Code of Criminal Procedure. With regard to confiscation, the Court issuing the relevant judgment decides if the objects confiscated must be destroyed. In all other cases the way of execution of the confiscation order is determined by the competent Public Prosecutor according to Art. 549 of the Code of Criminal Procedure.
Management, distribution and Pursuant to Art. 266 par. 1 of Code of transfer of assets Criminal Procedure, any items seized are placed in the custody of the secretary of the Court, or, in case this is not possible, of any other person competent or trustworthy appointed by the investigating authority. Money or other valuable items are deposited in the Consignment Deposits and Loans Fund. The person appointed must guard the items and hand them over at the request of the competent judicial authority. Items that are useless, or of no value at all or of insignificant value are destroyed five years after seizure. Pollutants or items harmful to the public health may be destroyed immediately. - According to Arts 38, 46 of the Code of
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Laws on Drugs (Law 3459/2006 drugs seized are normally destroyed. Some of them are given to the Police Academy or to other police services, or to Coast Guard Services, for training of their personnel. - Art. 177 of National Customs Code (Law 2960/2001 regulates the management of seized/confiscated means of transport, containers and works of machinery which were smuggled, or used for smuggling merchandise or people. Pursuant to Art. 177 par. 1, when a vessel is seized, it remains in the custody of the Coast Guard. The Coast Guard or the Customs Office may appoint a special guardian. - The disposal (in particular the sale by auction or transfer to state or charitable institutions) of confiscated movable property, especially vehicles, machinery and other similar items is governed mainly by Articles 1-3 of Law 251/1976, which established the Public Organization for Management of Public Assets (ΟΔΔΥ). This body was later transformed into a corporation (SA) owned by the State, by virtue of Presidential Decree 413/1998. This entity’s main purpose is managing and selling corporate movable property of the State. However, Articles 1 – 4 and 7 of Joint Ministerial Decision of the Ministers of Administrative Reform and E-government and Finance nr. Δ6Β 1036140 ΕΞ 21012/5.3.2012 (Official Gazette B 606/05.03.2012) dissolved the above Public Organization for Management of Public Assets SA and it’s attributions were transferred to the Ministry of Finance, and
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more specifically to the General Directorate of Customs and Excise. - The disposal of confiscated securities is governed by Articles 1-3 of Law 2526/1997. This Law established the Public Securities Corporation SA., which was owned by the State and whose purpose was to manage, sell and buy securities belonging to the State. However, by virtue of Art. 50, par. 9 of Law 3943/2011 the above Corporation was dissolved, its assets were transferred to the State and all its pending businesses are since dealt with by the Directorate of Movement of Capitals, Guarantees, Loans and Securities of the State’s General Accounting Office of the Ministry of Finance. - Real estate property of the State is disposed by the Directorate of Public Property of the Ministry of Finance.
Costs related to the guarding, maintaining and protecting the value of the assets Borne by the State
ES Identification, Location Spain's Judicial Police of the National Assets And Tracing of Criminal Location Office is the contact point to carry Assets - out on-spot investigations of criminal assets sent by others countries to Spain and to centralize Spanish police, judges and prosecutors requests to others Member States. Information exchanges are conducted through the assets recovery
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office. The Assets Location Office (OLA) is part of the UDEF (the Fiscal and Economic Crime Unit of Spain's Judicial Police Assets Location Office (OLA) queries different sources and databases and takes police measures when necessary; once completed; it sends the results to CICO. In the Civil Guard, the same functions are carried out by the Judicial Police Technical Unit. A minimum of information from the requesting country on the assets, the persons involved and the ongoing investigation is necessary. The Assets Location Office focuses on locating all the assets and properties that may belong to organized criminal groups, both in Spain and abroad. For tracing assets, investigating judges can access public registries such as the Property Registry, Mercantile.
Tools used to freeze and confiscate In order to freeze or confiscate assets, a judicial order issued by the examining magistrate is needed.
In case of perishable goods, assets can be Management, distribution and sold, according to article 367 quarter of transfer of assets theCriminal Procedure Code. In drug trafficking cases vehicles can be used throughout investigation by the police. However, in most cases only preservation measures are usually taken. Article 367 quinquies sets out processes for assets disposal that can be achieved through a person or specialized entity, a public auction, or handing them over to nonprofit entities or to Public
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Administrations. Instruction 5/2012239 of Prosecutor’s Office, reaffirms its view made in its Instruction of year 2007 about the sale of confiscated property, and indicates that Prosecutors must request that any seized drugs be destroyed, leaving only enough samples for evidence or future investigations. If the proceeds of the execution of the confiscation order are less than € 10,000 or the equivalent to that amount, the amount shall be paid into Spain’s deposit account and judicial appropriations. In all other cases, Spain will transfer to the issuing State 50 % of the amount that has been obtained from the execution of the confiscation order. The remaining 50 % will be paid into the account of deposits and judicial appropriations.
The Spanish State will not claim from the Costs related to the guarding, maintaining issuing State any reimbursement of and protecting the value of the assets expenses resulting from the execution of the confiscation order. However, if the implementation of the resolution has involved costs that it considers large or exceptional, the Criminal Judge shall notify the Ministry of Justice so as to reach an agreement with the competent authorities of the issuing State on cost sharing. As regards the revenue from assets, it means the costs for maintenance and disposition of assets will be deducted.
239 Annex 16
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FI Authority is divided between police and Identification, Location enforcement authority. And Tracing of Criminal The obligation for the pre-trial investigation Assets authorities (police, customs and border guard) to trace the proceeds of crime is based on Section 5 of the Criminal Investigations Act. Tracing the proceeds of crime is part of the pre-trial investigation. The enforcement authority may also identify, locate and trace property in order to execute order.
A court imposes a sequestration order. Tools used to freeze and confiscate According to Finnish law, confiscation is not a criminal sanction but a precautionary measure.
The enforcement authority executes Management, distribution and restraint or freezing orders (CMA 3:8; transfer of assets Enforcement Code) The authority in question (pre-trial investigation authority or enforcement authority) is responsible for the management of the assets (CMA 4:10, Enforcement Code). The Court order is delivered to Legal Register Centre, which will apply to the police to enforce an order for the confiscation of objects. If value is confiscated, the Legal Register Centre will ask the enforcement authority to enforce the confiscation order. (Act 672/2002 on Legal Register Centre).
Costs related to the guarding, maintaining The authority in question (pre-trial
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and protecting the value of the assets investigation authority or enforcement authority) is responsible for costs related to the guarding, maintaining and protecting the value of the property or assets and overall management (CMA 4:10, Enforcement Code).
FR Identification, Location Investigation by judicial police service; And Tracing of Criminal Possible use of coercive means (requisition, Assets searches…); Lifting of tax and banking secrecy; Establishment of the Identification Platform of Criminals Assets (PIAC) in 2005: specialized judicial police service with national competency.
From the enquiry stage; Tools used to freeze and confiscate Placement under seals of movable seized assets;
Establishment of the Agency for the Management, distribution and management and restitution of seized and transfer of assets confiscated assets (AGRASC) in 2011; Seizures with dispossession.
Owner or holder of the asset responsible of Costs related to the guarding, maintaining its maintenance; and protecting the value of the assets Sale before judgment of the movable assets; Cost of the management due to the AGRASC when it is in possession of the asset.
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HR Identification, location and tracing of assets Identification, Location are the competence of police authorities. And Tracing of Criminal Article 9 of the Act on Proceedings for the Assets Confiscation of Proceed of Crime provides that “all State institutions, Banks and other physical and legal persons are obliged on the basis of a Court Order, to give information confirming facts necessary to take the decision under this Act. The Court fixes the deadline to the concerned person or Institution to give the information’s or declaration and if they do not comply with the order, they may be condemned to a monetary fine and if they still do not conform to the Court order they risk a imprisonment sentence of up to 30 days. An appeal is allowed against this decision but it will not suspend the execution.
Provisory Measures (Freezing) are adopted Tools used to freeze and confiscate through a decision of the Investigating Judge (until de presentation of the Indictment), a Decision of the State Attorney (from the presentation until de confirmation of the Indictment), a Decision of the Court conducting the main procedure. Confiscation measures are adopted by a Verdict of the Court in front of which are conducted the criminal proceedings. In the case of the non-conviction based confiscation, freezing measures are adopted by a decision of the investigating judge before the start of the proceedings.
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After the start of the proceeding, these measures might be adopted by the judge of the Competent Court in front of which the proceeding is going on. Freezing can be: - Ban on disposal of property filed with the land registers, seizure of property and its entrust for keeping and management to Asset Management Office; - By confiscating and depositing cash and securities and handing the over to the Asset Management Office; - By prohibiting the debtor of any opposing party to voluntarily fulfil their obligation towards the third party party and by prohibiting the opposing party; - To receive the fulfilment off the respective obligation, i.e. to access their claims; - To order a bank to forbid the party opposing the insurance or third party, on the basis of the order of the party opposing the insurance, to pay from the account the amount for which is determined provisional measure; -To ban alienation and burden of stocks, shares, or business shares with registering the ban in the book of shares, stocks or business interests, and if necessary also in the public register, ban on use or disposal with rights on the basis of such stock, shares or business interests, by entrusting stocks, shares or business shares to management of Asset Management Office, and to appoint of a temporary management for the company; - Prohibiting the debtor of the opposing
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party to submit property, transfer a right or perform another non-monetary action towards the opposing party. These measures are only mentioned as an example, but any other security measure can be determined as necessary to achieve the purpose of the measure.
The Central Office for State Property Management, distribution and Management manages the frozen Assets. transfer of assets The Central Office can decide to sell or destroy the frozen mobile assets if keeping them is dangerous or if there is a risk that they will perish or loose their value. Distribution and transfer of assets frozen on the basis of a foreign Member State request are regulated by international legal agreements or if not by MLA (art. 28 and 29 above cited).
Costs resulting from international legal Costs related to the guarding, maintaining assistance borne Republic of Croatia, and protecting the value of the assets except costs incurred by the attendance of experts and costs of a substantial or extraordinary nature are drawn on the confiscated amount.
HU According to Section 164 of the CPA, one of Identification, Location the aims of the investigation is to locate And Tracing of Criminal and secure the means of evidence that can Assets be subject to freezing or confiscation. Pursuant to Section 71, the Court, the prosecutor or the investigating authority may contact central and local government
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authorities, business organizations and societies to request information or documents. The contacted entity shall fulfill the request free of charge within the prescribed deadline. Sections 149 and 150 regulate house searches and body searches aimed at finding objects or assets to confiscate. The Court, the prosecutor or the investigative authority, may order a house arrest. The prosecutor or the investigative authority may order the body search.
1) Our national ARO (the National Bureau of Tools used to freeze and confiscate Investigations/NNI) has been assisting the Hungarian law enforcement authorities in order to freeze assets before conviction. There are some examples where other Hungarian police organs (including county police headquarters) have asked for the assistance of NNI concerning asset recovery. 2) According to Section 87 of the 11th Statutory Rule of 1979 on the Enforcement of Punishments and Measures, confiscation of objects is executed by the economic office of the tribunal. As a general rule, Section 89 states that confiscated objects shall be sold in the market. Marketing can be realized by an economic organization entitled to trading or by an individual contractor, or by auction. If the confiscated object is unsuitable for selling, it can be destroyed. The Court bailiff (executor) is responsible for giving effect to the confiscation of assets. Pursuant to Sections 203-204 of the Act of 1994 on Judicial Enforcement, the
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bailiff shall apply the sequestration upon receipt of the court’s decision. Section 154 of the CPA states that the Management, distribution and assets subject to seizure shall be deposited. transfer of assets If the assets are unsuitable for depositing, they cannot be possessed without the consent of the ordering authority. The assets seized shall be listed in a document indicating features that make them suitable for individual identification. They shall be kept in a way ensuring that the property is preserved unchanged and easily identifiable. The details are regulated by the Joint Decree of 11 of 2003 (8 May) of the Ministers of Justice, the Interior and Finance on Seizing and Handling, Recording, Preliminary Sale and Annihilation of Seized Objects, and the Execution of Confiscation.
Section 74 of the CPA states that the costs Costs related to the guarding, maintaining of the proceedings shall involve costs and protecting the value of the assets advanced by the state, from the commencement of the proceedings until the end of the enforcement of the judgment. These include, in particular, costs related to the transportation and storage of seized objects.
IE Identification, Location The Director of Public Prosecutions in And Tracing of Criminal criminal matters may apply for freezing Assets orders under section 24 of the Criminal Justice Act 1994, and for confiscation
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orders under sections 4 and 9 of the 1994 Act.
Tools used to freeze and confiscate Criminal Justice Act 1994 as amended Proceeds of Crime Act 1996 as amended and the Criminal Justice (Mutual Assistance) Act 2008.
Management, distribution and A receiver can be appointed by the High transfer of assets Court on the application of the DPP to manage frozen or confiscated assets under domestic criminal and mutual assistance legislation. All assets confiscated under domestic legislation are transmitted to the Minister for Public Expenditure and Reform. Under section 42 of the 2008 Act, a designated member state can apply for the return of funds confiscated under a co- operation order. It is for the Court to decide then on the disposal and transfer of such funds. The Proceeds of Crime Act 1996 allows for the freezing of assets. Under the 1996 Act a party may make a claim on the property if they can show that the money is not the proceeds of crime, allowing directly affected victims to seek the return of frozen assets. Should no claim be made within seven years, the a claim can be made by the Criminal Assets Bureau to transfer the assets to the Minister for Public Expenditure and Reform.
Sections 42 and 57 of the 2008 Mutual Costs related to the guarding, maintaining Assistance Act provide that any costs and protecting the value of the assets incurred can be deducted from the money paid or recovered in respect of a co-
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operation order in question. In Ireland, domestic confiscation order expenses can be deducted from the sums forfeited under section 22 of the Criminal Justice Act 1994. Expenses incurred as a result of receivership under the Proceeds of Crime Act may be deducted in priority to other costs.
IT Identification, Location Autonomous, or delegated by the Judicial And Tracing of Criminal Authority, Law enforcement activities Assets (especially Guardia di Finanza Units).
Tools used to freeze and confiscate N/A
Management, distribution and Judicial Authority and National Agency for transfer of assets the administration and destination of seized and confiscated assets Costs related to the guarding, maintaining Person criminally charged or convicted. and protecting the value of the assets After conviction by National Agency.
LT Review of databases and registers, Identification, Location performed by bodies of pre-trial And Tracing of Criminal investigation; Assets Application of procedural coercive measures; Prosecutor’s Decisions to impose temporal limitation of ownership rights.
Access to databases and registers;
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Tools used to freeze and confiscate Procedural coercive measures, applied by the decision of a prosecutor or investigating judge; Decisions imposing confiscation.
Prosecutor’s Decision to nominate a person Management, distribution and responsible for management of assets transfer of assets frozen; Prosecutor’s Decisions regarding distribution and transfer of assets; Regulations of the Court passed in the course of appellate proceedings.
Expenses are to be covered by a person Costs related to the guarding, maintaining nominated to manage frozen assets; and protecting the value of the assets Costs might be recognized by the Court as procedural expenses and recovered from a sentenced person.
LU Assets are identified, located and traced Identification, Location only within criminal procedures. Once a And Tracing of Criminal judicial investigation is closed there are no Assets more possibilities for identifying, locating or tracing assets in order to enforce Court decisions for example. Confiscation of is only effective if property has been seized previously.
Seizing (article 66 CIC) is the only freezing Tools used to freeze and confiscate tool. The investigation magistrate issues a warrant in order to seize criminal assets. Confiscation is considered as a penalty that can only be ordered by a Court. No management as long as assets are only Management, distribution and seized. Once there is a definitive decision
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transfer of assets for confiscation, the state becomes the legal owner of the confiscated property. Proceeds related to drug trafficking, organized crime, money laundering and some other crimes are transferred to a foundation meant to encourage, create, coordinate and put in place means to fight certain forms of criminality. Costs related to the guarding, maintaining There are no legal rules as there is no law and protecting the value of the assets for managing seized assets. E.g. banking fees for the management of seized assets are charged directly to the seized account. Costs for custody of a seized car for example are supported by the public budget.
LV The rules are prescribed in The Sentence Identification, Location Execution Code of Latvia and Civil And Tracing of Criminal procedure law. But it should be noted a Assets new law on execution of confiscation of criminally acquired property is in preparation.
A law that regulates confiscation of Tools used to freeze and confiscate criminal assets is being drafted. Bailiffs carry out confiscation of criminal assets according to Chapter Twenty-six of The Sentence Execution Code of Latvia that regulates procedures for execution of property confiscation. CPL article 800 provides for Conditions for Management, distribution and the Division of Money or Property Obtained transfer of assets as a Result of Confiscation of Property with a European Union Member State.
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The Ministry of Justice, upon the request of a European Union Member State, shall decide a matter regarding division of money or property obtained as a result of confiscation of property with this Member State. If the money obtained as a result of confiscation of property does not exceed the equivalent of EUR10000 in lats (recalculating such amount in accordance with the currency exchange rate specified by the Bank of Latvia which was in effect on the day of announcement of the adjudication regarding a confiscation of property), the Ministry of Justice shall take a decision on refusal to transfer the money to a European Union Member State. If the money obtained as a result of confiscation of property exceeds the equivalent of EUR 10 000 in lats, the Ministry of Justice shall take a decision to transfer half of the money to the relevant European Union Member State.
The costs are considered procedural Costs related to the guarding, maintaining expenditures. Procedural expenditures shall and protecting the value of the assets be recovered with a Court adjudication from the convicted person.
MT
Identification, Location N/A And Tracing of Criminal Assets
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Tools used to freeze and confiscate The investigation order, the seizure and the confiscation orders. The assets are frozen by the garnishees that Management, distribution and are notified with the order. When the transfer of assets property in question is movable property, the registrar is the custodian, and as such confiscates the same through judicial sale by auction.
Costs related to the guarding, maintaining No provision is made for such costs in the and protecting the value of the assets law.
NL General investigative powers such as open Identification, Location sources, searches, financial investigation. And Tracing of Criminal In addition a special Financial Investigation Assets made be conducted, Section 126 of the Dutch Code of Criminal Procedure. 1. In the event of suspicion of a crime for which a fine of the fifth category can be imposed and as a result of which any benefit measurable in money could have been obtained, a criminal financial investigation can be instituted in accordance with the provisions of this section. 2. The purpose of a criminal financial investigation is to determine the proceeds of assets unlawfully obtained by the suspect, with a view to confiscate them on the grounds of Article 36e of the Dutch Code of Criminal Procedure. 3. The criminal financial investigation is
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instituted by virtue of a motivated authorization issued by the investigating judge, at the request of the Public Prosecutor’s Office. 4. The request of the Public Prosecutor's Office must be motivated. The request must also be accompanied by a list of objects that have already been seized on the grounds of the second, third and fourth paragraphs of Article 94a. 5. The Public Prosecutor's Office must periodically inform the investigating judge regarding the progress of the criminal financial investigation, of its own volition or at the request of the investigating judge. This investigation gives special investigative powers for the public prosecutor.
The public prosecution can enforce freezing Tools used to freeze and confiscate tools. If it is a freezing based on article 94a he will need an empowerment of a investigative judge. If a confiscation order is not paid a judge can decide to take the convicted person in to custody (the obligation to pay will stay).
Management, distribution and This is a power from the public prosecutor, transfer of assets the asset managers from “beslagbeheer” can also make such decisions.
“Beslagbeheer” has the responsibility to Costs related to the guarding, maintaining watch the costs. We have a special budget and protecting the value of the assets for costs related the management of assets.
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PL Police and the ARO have access to national Identification, Location databases : 1. direct access, And Tracing of Criminal 2. indirect access, Assets Ad. 1. The direct access to databases is possible through the Police Data Transmission Network (PSTD) for authorized police officers and civilians. PSTD allows checks in: - Central Population Register (CEL), -National Official Register of Business Entities (REGON), - National Court Register (KRS), - National Police Information System (KSIP).
Ad. 2. Indirect access is possible by sending requests directly to the administrators of the databases containing information on the property components, i.a.: - Land and Building Record, - Land and Mortgage Register, - Economic Activity Records, - Register of Housing Cooperatives, - Records of Manufacturers, the Farm and Grant Payment Requests, - The register of identified farm animals, - Equine/Horse Registry, - Ship Registers (register of marine boats, yacht and vessels), - Registers of Inland Navigation Vessels (Polish register of the inland waterway vessels, register of vessels used exclusively for sports and recreation, register of fishing
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vessels), - Register of fishing boats, - Register of Civil Aircraft, - Register of Foreign Entrepreneurs Representations, - Register of Pledges, - Central Register of Treasury Pledges, - Register of Property, Stocks and Shares acquired or Subscribed by Foreigners, - National Register of Forestry Reproductive Material, - Register of Historic Monuments.
FIU competences: Tools used to freeze and confiscate . power to suspend transactions and block accounts . power to obtain information on financial transactions . power to request further information and documents from the obliged institutions (i.e. reporting entities) and cooperative bodies . power to control obliged institutions (within the scope of compliance with legal regulations on counteracting money laundering and terrorist financing).
Management, distribution and According to the Code of Criminal transfer of assets Procedure, Article 292 § 2 : The securing of the impending penalty of the forfeiture of material objects consists in the seizure of movables, obligations and other property rights, and in the prohibition of selling and encumbering any real estate. This
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prohibition is published by the land and mortgage register or through the documents filed with the court. Article 232 § 1. Material objects which are perishable or the storage of which would entail unreasonable expense or excessive hardship or would significantly impair the value of the object, may be sold without an auction, by means of an appropriate trading unit, in compliance with the provisions applicable to sales resulting from the execution against chattels. § 2. The pecuniary proceeds of such a sale shall be deposited with the court. § 3. All persons concerned including the accused should be notified, if possible, of the time and circumstances of such a sale.
The costs of guarding objects seized in Costs related to the guarding, maintaining criminal proceedings are added to the costs and protecting the value of the assets of the proceedings. In case of guarding the objects at premises of the authority conducting the proceedings, the costs are constant and rather low (40 PLN or 20 PLN). In case of guarding the objects by external subjects, the costs are indicated in a bill from the subjects. According to the Code of Criminal Procedure: In case of a request from other MS to enforce a confiscation order: Article 611fze § 1. The State Treasury shall bear the costs related to the execution of the decision referred to in Article 611fu § 1. In justified cases, the court may request the competent court or another agency of the decision issuing state to reimburse part
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of the expenses incurred. The request shall be appended with a detailed list of the expenses incurred together with a proposal of their division. § 2. If the State Treasury is held liable for damage inflicted in connection with the execution of the forfeiture decision issued by a judicial authority of the decision issuing State, the State Treasury shall request the competent agency of such state to reimburse the amount of money being an equivalent of the compensation that has been paid. § 3. The provision of § 2 shall not be applied, if the damage is the only consequence of action or omission by a Polish agency.
PT Identification, Location The Assets Recovery Office (GRA) identifies, And Tracing of Criminal traces and apprehends the assets or Assets products related to crimes, at a national and international level, and cooperates with assets recovery offices created by other States (art. 3.º of L 45/2011, of 24th July). GRA can have access to the information held by national or international bodies, on the same terms as the competent authority responsible for the criminal investigation. When the access depends on an authorization by a judicial authority, the judicial authority identifies the single or legal people covered by the measure and specifies the information that must be
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given as well as any applicable deadlines for communicating the information. With respect to any information related to bank accounts all transactions may be requested under specific conditions (art. 8.º/1, 3 and 4 of L 45/2011, of 24th July).
Tools used to freeze and confiscate N/A
Management, distribution and The administration of seized assets, is transfer of assets organised by an office of the Institute of Financial Management and of the Infra- Structures of Justice, I.P. (IGFIJ, I. P.), designated as Assets Administration Office (GAB). The Direction Council of IGFIJ, I.P. is responsible for all acts of administration and management of GAB. In the exercise of its powers of administration is a GAB competence: a) Protect, preserve and manage the recovered assets, b) Determine the sale, its attachment to the public service or the destruction of the assets mentioned in the previous point, c) Perform further competences that are legally given. The GAB performs its tasks in the strict respect of the principle of transparency, aiming at a rational and efficient management of the administrated assets and, if possible, their patrimonial development. The GAB proceeds to the examination, description and register of the asset evaluation to set the value of an eventual
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compensation. (art. 10.º of L 45/2011, of 24th July). The GAB proceeds to the sale of perishable assets where they do not constitute evidence. (art. 14.º of L 45/2011, of 24th July). Immovable assets are preserved and managed by GAB, and cannot be alienated before the final judgment. However, the GAB can proceed to their anticipated sale or allocation where there is a severe danger of loss of value or allocation of security and public health and they are not evidence in the proceedings. If the immovable asset are evidence in the proceedings, the GAB can proceed to works of rehabilitation if necessary (art. 16.º of L 45/2011, of 24th July).
The revenues generated by the Costs related to the guarding, maintaining administration of recovered assets or and protecting the value of the assets declared lost in favour of the State revert in 50% to the Justice Modernization Fund and 50% for the IGFIJ, I. P. The expenses incurred are paid from the assets.
RO Government Decision no 32/2011 Identification, Location establishes the National Office for Crime And Tracing of Criminal Prevention and Asset Recovery within the Assets Ministry of Justice, as national asset recovery office. The Romanian Asset Recovery Office (ARO)
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was set up in order to facilitate the tracing and identification of the proceeds of crime and other crime related property, which may become the object of a freezing, seizure or confiscation order made by a competent judicial authority in the course of criminal proceedings. In this respect, the Romanian ARO cooperates with other asset recovery offices or authorities with similar responsibilities in other EU Member States, by providing data and information exchange, for the purposes mentioned above. At the same time, the Office cooperates with the competent authorities and public institutions from Romania in order to track and identify the proceeds of crime and other crime related property. Thus, the Romanian ARO assists the prosecutor, during the investigation phase, in identifying the proceeds of crime. The Romanian ARO has access to real estate registers, commercial trade registers, bank account registers, public records and the registers on vehicles, weapons, ships and aircrafts. In addition, in order to fulfil its tasks, the office requests statistical data and information on serious crimes cases, especially organized crime. Thus, ARO requests information as follows. - all the courts have to report information on final decisions regarding the freezing and confiscation of proceeds of crime; - the National Agency for Fiscal Administration has to report any statistics on the disposals (i.e. value of the
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confiscated assets, value of the valorisation of the confiscated assets); - the Prosecutor’s Office provides data on prejudices established according to the indictments and measures of freezing applied during the criminal prosecution; Based on the input received, the Romanian ARO centralizes the following information: - amount of the prejudices according to the indictments - value of frozen assets; - value of confiscated assets; - value of assets disposed. It has to be mentioned that the Romanian ARO does not have competence to execute any judicial decision sent from another Member-State, nor is entitled to deal with the management of frozen assets, its activities being undertaken in the pre-MLA phase.
As regards EU Member-States, freezing and Tools used to freeze and confiscate confiscation orders can be sent based on the provisions of the framework decisions on freezing and confiscation. In addition to that, classical MLA requests can also be sent. As regards to the main rules, they are following the lines established by the two FDs. Freezing- Art. 224-229 of Law 302/2004 on international judicial cooperation in criminal matters. Confiscation-Art.253-259 of Law 302/2004 on international judicial cooperation in criminal matters. Management, distribution and The authority that enforces the freezing transfer of assets measure manages the assets. According to
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the Criminal procedure code, the criminal investigation body or the judicial executor must identify and evaluate the assets. If necessary, they can ask for the help of the experts, according to their needs. Traditionally the Romanian Police stores frozen assets until a final confiscation decision is rendered. In other cases, the Police may require the assistance of the National Agency for Fiscal Administration (ANAF), which is the authority responsible for the disposal (selling) of confiscated assets, according to the law. The costs are incumbent to Romania as Costs related to the guarding, maintaining executing State. There are exceptions to and protecting the value of the assets this. According to the Romanian law, Art. 259 paragraph 7 of Law 302/2004, in case the execution of a confiscation order would entail high or exceptional expenses, the executing Romanian authority may inform the issuing authority and propose to split the expenses.
SE A special section within the Swedish Identification, Location Economic Crime Authority, the Proceeds of And Tracing of Criminal Crime Unit, assists the police and Assets prosecutors in tracing and forfeiting money and assets. The Swedish Customs Service plays an important role before and during preliminary investigations in relation to tracing and recovering proceeds of crime. The prosecutor may take property into custody while awaiting the court order
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(Chapter 26 Section 3 of the Code of Judicial Procedure).
Tools used to freeze and confiscate Provisional attachment (Chapter 26 of the Code of Judicial Procedure), seizure (Chapter 27 of the Code of Judicial Procedure), confiscation (Chapter 36 of the Penal Code). According to Chapter 2 Section 1 of the Ordinance on the Recognition and Execution of European Union Freezing Decisions (2005:501), the prosecutor is (unless delay entails risk) to notify the Enforcement Authority before a freezing decision is sent to another Member State.
The police manages seized evidences. Other Management, distribution and property is managed by the Enforcement transfer of assets Authority. This means that the Enforcement Authority is responsible for the enforcement of decisions. However, after a decision has been enforced, the Enforcement Authority is to surrender the assets to the Police or prosecutor, who applied for enforcement. According to Chapter 36 Section 17 of the Penal Code, unless otherwise prescribed, confiscated property accrues to the state.
According to the Act (2011:423) on Costs related to the guarding, maintaining Recognition and Execution of Confiscation and protecting the value of the assets Orders in the European Union, property other than monetary assets received by means of execution, shall be sold, or if it cannot be sold or there is a danger of the property being used in criminal activities, destroyed (Chapter 3 Section 17). If the
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execution decision pertains to a payment obligation, property might only be handed over if the other state agrees to it. The general rules concerning maintaining of confiscated property are set out in the Act (1974:1066) on the procedure concerning confiscated property and lost property, etc. According to Section 4, the authority that maintains the property can immediately sell it if it cannot be maintained without the danger of destruction or if its maintenance is associated with excessive costs. According to Section 5, assets likely to be used for criminal activities or that are otherwise unsuitable for sale must be destroyed. According to Section 7 Paragraph 2, if the property has been repaired or otherwise improved, the person claiming the property must pay the cost of the improvement before the property is released.
SI Article 9 ZOPNI provides that all provisions Identification, Location of ZKP are also applicable in financial And Tracing of Criminal investigations, the seizure of illegal assets Assets in the future and the present ability to temporarily seize illegal assets. The legal basis for identification, location and tracing of illegal assets is provided by Article 499 ZKP, stating that all assets, gained through criminal activity or deriving therefrom, should be considered for seizure by order of the Court, acting ex officio. Article 507, para. 3 ZKP expands the scope
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of the above provision to the pre-trial phase of the criminal procedure. The actual measures for identifying, locating and tracing the illegal assets are provided under Articles 148 to 156 ZKP providing the terms and conditions for covert and secret police operations and Article 214 ZKP providing the conditions for searching premises and conducting personal searches.
According to Article 502 ZKP, proceeds Tools used to freeze and confiscation gained through criminal activity or by reason of the commission thereof shall be determined in criminal proceedings ex officio. Temporary freezing of proceeds is possible. Articles 20 to 25 ZOPNI provides the possibility for temporary preservation of the ability to seize illegal assets in the future and the present ability to temporarily seize illegal assets.
The Government of the Republic of Slovenia Management, distribution and passed implementing decrees regulating the transfer of assets process of storage, management and sale of temporary preserved, temporary seized and confiscated illegal assets, namely the Decree on Procedures of Storage, Management and Sale of Illegal Assets (“Uredba o postopkih hrambe, upravljanja in prodaje premoženja nezakonitega izvora”, Official Gazette of the Republic of Slovenia, No. 43/2012). In general, the competent authority is obliged to manage the stored assets as a good manager and prevent the value of the assets to be
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reduced. The assets confiscated on the basis of a final judgment of the Court become property of the Republic of Slovenia and should generally be disposed of according to the procedure for disposal of state- owned assets.
According to Article 41, all costs of Costs related to the guarding, maintaining guarding, maintaining and managing of the and protecting the value of the assets assets is covered by the State budget.
SK Tracing and identification of assets is Identification, Location performed by the police body or Asset And Tracing of Criminal Recovery Office (FIU Slovakia). The Assets information on various types of assets is either identified through directly accessible databases (vehicles Registry, Land Registry), or based on a written request (bank account, insurance, securities, boats, aircrafts, other registered property). The legal regulation is included in the Act on Police Force.
Freezing of a thing – movable: all police Tools used to freeze and confiscate bodies have the power to seize/freeze such assets within the preliminary stage of criminal proceedings with the previous consent of the prosecutor. The prosecutor and/or presiding judge has the power to freeze any assets. Freezing of real estate: only a prosecutor may freeze such assets at the preliminary
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stage and a court/presiding judge during the trial. Freezing order should be also recorded in Land Registry (cadaster). Freezing of a bank accounts/financial assets: only a prosecutor may freeze such assets within the preliminary stage and a court/presiding judge during the trial. Order must be delivered to appropriate bank/financial institution. Judicial body may freeze whole account and/or only portion of it also. Freezing of a shares and/or bonds: only a prosecutor may freeze such assets within the preliminary stage and a court/presiding judge during the trial.
Police or judicial body which made the Management, distribution and freezing order is also responsible for transfer of assets management of such assets.
Costs related to the guarding, maintaining All costs are paid by police or judicial body and protecting the value of the assets which made the freezing/confiscation order.
UK Part 8 of the Proceeds of Crime Act gives Identification, Location powers for the courts to grant law And Tracing of Criminal enforcement officers: Assets - production orders (section 345 POCA – requires the recipient to provide or allow access to specified material relevant to the investigation.)
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- search and seizure warrants (section 352 POCA) - disclosure orders (section 357 POCA – requires the recipient to answer questions, provide information or produce documents.) - customer information orders (section 363 POCA – ordering a financial institution to provide any such customer information (such as bank account and personal details) that it holds in relation to a specified person); and - account monitoring orders (section 370 POCA - requires the specified financial institution, for the period stated in the order, to provide account information such as deposits and withdrawals.
Tools used to The UK’s legal framework for freezing and freeze and confiscate confiscating the proceeds of crime is set out in the answer above.
The UK operates a value-based confiscation Management, distribution and system. A confiscation order does not relate transfer of assets to specific property, but instead demands payment of a sum equivalent to the benefit that the criminal gained from his crimes. When a Confiscation Order is realized (paid) the money is transferred to the Home Office. Under the Asset Recovery Incentivisation Scheme (ARIS) recovered money is divided between the Home Office and law enforcement and prosecutorial agencies according to a predetermined
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formula.
Management receivers’ costs are met from Costs related to the guarding, maintaining the assets under management and, if there and protecting the value of the assets is a shortfall, any remaining sum due is met by the prosecutorial agency. Enforcement receivers’ costs are taken from the recovered assets.
Summary
The identification of assets is most often conducted by the police under the supervision of public prosecutors. However, in half of the Member States special organisations have been created to help identify assets and are regularly used for such a purpose.
The lack of central registers of bank accounts in many Member States can be an impediment to effective enforcement of freezing and confiscations orders.
The monitoring of assets is organized for a third of the Member States by the prosecutors, for a third by the courts and for another third by specialized agencies. It should be noted however that in many cases the public prosecutors’ offices and the courts will work with the specialized agencies on the monitoring.
The enforcement of freezing and confiscation orders are equally shared by prosecutors, the courts and specialised agencies. In many instances the prosecutors and specialised agencies have the most active role in the enforcement and share competences.
ARO offices are identified in some Member States as playing an important role and so are Financial Intelligence Units referred to. However, their role, functions and competences may not always be well defined which may explain why they are not referred to in most Member States as playing key roles. It further appears that
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because FIUs are attached to either courts, prosecutors’ offices or police units they are not seen as specific organisations.
Customs and tax authorities are identified in some Member States as playing a role in identifying assets but within the limits of their own competences.
All Member States have increased their efforts for developing tools to help identify and trace assets. AROs and FIUs are cited as being important in this respect.
The management of seized or confiscated assets is organised very differently from country to country. Processes for management are not always transparent and the disposal of assets neither. It is also sometimes unclear as to who pays for the costs of management and how the original owner of the assets is reimbursed or compensated if the assets are to be returned to him or her.
Compartmentalisation and overlaps in competences may explain on the one hand why information flows may be limited and on the other hand why inefficiencies in resource utilization may occur.
The creation of national case management systems to help overlaps and duplication have been identified at the EU and at national levels as a best practice.
The creation of asset management agencies that are transparent, accountable and independent can be recommended. The Italian National Agency for the Management and Use of Seized and Confiscated Organised Crime Assets, the French AGRASC,
The creation of specialised, independent, transparent and centralized agencies has proven beneficial in Member States.
The interconnection between various enforcement agency databases at the national level has also been identified as useful in improving efficiency.
2.3. Cooperation with supranational agencies
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2.3.1. Context For the more sophisticated criminals, proceeds of crime are often located within the territory of another Member State than the one where the criminal activity has been committed or where the offender has been convicted.
Therefore, the effectiveness of freezing or confiscation mechanisms depends on the effective cooperation of all Member States concerned, for the exchange of information necessary for the identification of the instruments and proceeds of crime and to give effect to freezing and confiscation orders through mutual recognition.
Today the necessary coordination of legal cooperation of competent national authorities often goes through existing judiciary networks such as EUROJUST, EJN or CARIN.
Since its creation in 2002, EUROJUST has actively contributed to the improvement of judicial cooperation between national authorities by facilitating cooperation and assisting for the execution of different judicial orders related to cross-border crime. In this sense, EUROJUST plays a key role as enabler between Issuing and Receiving authorities, braking down language barriers, speeding up processes and match-making relevant authorities.
On the other hand, the judicial cooperation in criminal matters is largely facilitated by the European Judicial Network (EJN). The EJN operates as a network of national contact points since 1998. These national contact points are designed by each Member State are experts in international judicial cooperation related to serious forms of crime.
The Camden Asset Recovery Inter-Agency Network (CARIN), is an informal cooperation network. CARIN helps in the identification and confiscation of proceeds of crime through relevant exchanges of information and appropriate cooperation between specialised agencies in asset recovery.
2.3.2. Practical aspects of the cooperation between the EU Member States with these supranational authorities All Member States have reported that their national authorities cooperate in an effective way with the respective supranational authorities such as EUROJUST, EJN and CARIN.
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2.3.2.1. Cooperation with Eurojust Council Decision 2002/187/JHA240 established Eurojust as a judicial coordination unit. Its role will expand based on Article 85 and 86 of the TFEU.
In all Member States, the competent national authorities have the possibility to address Eurojust with information requests concerning the proceeds of crime and thus benefit from an efficient “bridge” of communication between the required national authorities in order to ensure the recognition or execution of their freezing or confiscation order. In Germany for example, the table of Eurojust is accessible to every authority that can consult it if necessary in the transnational cases they deal.
It is upon the decision of the competent prosecutor or judge to decide if they need the assistance of Eurojust on a specific case. However, the competent national authorities are required to transmit any kind of information that is necessary for the Eurojust activity. Therefore, some member States have reported that the predominating form of cooperation with Eurojust is the transfer of information to Eurojust.
The Spanish legislation provides that judges and courts, Members of the Office of the Public Prosecutor and all concerned persons or entities have to offer the information or cooperation requested by Eurojust, otherwise they may be subject to disciplinary sanction.
In general, the national judicial and prosecution authorities are duly informed about the role and advantages of using the Eurojust channel in order to ensure the execution of their freezing and confiscation orders.
In this vein, regular consultations between Eurojust National Members play a crucial role in developing the awareness of national authorities of the tools available in fighting crime. All Member States have appointed Liaison Prosecutors as National Members of Eurojust holding the same role as national Public Prosecutors.
For example, in Estonia in the case of an emergency, Eurojust's National Member for Estonia may start criminal proceedings to be conducted in Estonia and, after performance of procedural acts, send the case files to the Public Prosecutor's Office who forwards the materials pursuant to the investigative jurisdiction. The Liaison Prosecutor also receives requests for assistance that are submitted through Eurojust. After conducting a check that
240 Council Decision 2002/187/JHA was subsequently amended by Council Decision 2003/659/JHA of 18 June 2003 and Council Decision 2009/426/JHA of 16 December 2008.
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such requests meet all requirements and that it is admissible, he/she forwards it to competent judicial authority for execution.
The Spanish Liaison Prosecutor designated as a Eurojust National Member is also in charge of reception and transmission of any requests for mutual legal assistance made by Spanish judicial authorities or the Public Prosecutor or reciprocally to receive and transmit requests for mutual legal assistance made by other Member States through Eurojust. In order to facilitate its mission, the Eurojust National Member has access to any relevant public register, on the same conditions as judges or members of the Public Prosecutor’s Office. Furthermore, Spanish Liaison Prosecutor receives any relevant information from the European Anti-Fraud Office (OLAF) or even from State Security Forces, and any other information to fulfil its duties as necessary. It is also the case for the Lithuanian Prosecutor of Prosecution Office, who acting as Eurojust national member, coordinates the requested activities as well as the activity of contact points within the framework of the Eurojust National Coordination System. The local prosecutors and investigating officers may contact a Eurojust National Member or any contact point in Lithuania, in order to receive necessary advice regarding the preparation or execution of a freezing order or other requests as necessary.
Even if Eurojust has become more involved in cooperation efforts in recent years, it seems that national authorities still rely most often on mutual assistance multilateral agreements. The Eurojust channels are mostly used in cases of emergencies or where the communication between national authorities has stalled because of major differences between the substantive and procedural laws of the requesting and the requested Member States (such as the example of non-conviction based confiscation orders).
Cases referred to Eurojust by Member States authorities concern mostly serious forms of crime such as drug trafficking, trafficking of human beings, terrorism, fraud, money laundering, VAT fraud, and corruption. For example, cases that have been referred to Eurojust by Hungarian Authorities241 are related in general to financial and/or economic crime, especially to VAT.
241The cooperation between Hungarian authorities and Eurojust are set up by Act CLXXX of 2012, that provides that Eurojust fulfill its task through Hungarian Member at Eurojust, appointed by the Hungarian Minister of Interior and Eurojust acting as a colleague. Eurojust can request from Hungarian authorities any kind of information, investigative measure and coordination in serious criminal cases such as the organized crime.
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2.3.2.2. Cooperation with EJN As required by the EJN status, all Member states have appointed their respective national contact point, the number of contact points depending on the internal structure of each Member State. For example, in Spain, the Public Prosecutor has appointed 6 contact points within the European Judicial Network : 2 in the International Cooperation section of the Technical Secretariat, 1 in the prosecutor's office attached to the National High Court, 1 in each of the Special Public Prosecutor's Offices and one in the Provincial Prosecutor's Office in Malaga. As reported from Spanish authorities, these contact points have so far received a total of 22 criminal files for other Member States and Eurojust.
In Germany, there is a contact point in each federal state at the Public Prosecutor’s Office, the Federal Prosecutor General and the Federal Office of Justice.
In the United Kingdom, Members of the UKCA (United Kingdom Central Authority), SFO (Serious Fraud Office) and CPS (Crown Prosecution Service) are Contact Points for the purposes of the EJN (European Judicial Network).
Nevertheless, it was reported that the existing cooperation tools provided by these judicial cooperation networks are more often used during the investigation and prosecution phases. However, a majority of requests addressed to ENJ are made prior to the sending of freezing and confiscation requests and consists in exchange of information related to the identification of national authorities which have the power to enforce such orders and the applicable national legal provisions. For example, it was reported in the Romanian national report that an ENJ contact point in Romania was contacted by a foreign authority asking it to facilitate the contact with the competent judicial authority in Romania, in order to execute a freezing and confiscation request. The Romanian contact point receiving the request sent it to the Romanian Ministry of Justice, which after verifying it forwarded it for execution to the competent Romanian Court.
2.3.2.3. Cooperation with CARIN All Member States have reported that they have a fruitful cooperation with CARIN Network. Usually the national contact point at CARIN is the National Asset Recovery Office. By way of example, in the case of Germany, the Asset Recovery Unit of the Federal Criminal Police Office and the Federal Office of Justice are nominated as Assets Recovery Offices (ARO) and at the same time they are CARIN contact points for Germany.
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In case of France, the contact points for CARIN network are: the Identification Platform of Criminals Assets (PIAC) and the Agency for the management and restitution of seized and confiscated assets (AGRASC). For this purpose, French ARO have established an information interchange protocol.
In Lithuania, the Lithuanian Criminal Police Bureau (thereinafter – LCPB) is designated as Asset Recovery Office and it serves as the contact point at CARIN as well.
The ARO and CARIN Networks are usually used during the phase of investigation in order to exchange data’s and information related to the identification and monitoring of criminal assets. This does not exclude the possibility to use CARIN network at an advanced stage of the confiscation proceedings, such as for the purpose of identification of the criminal assets to be confiscated on the bases of an outstanding confiscation order. For example, the French ARO have mentioned that they use the CARIN Network in order to identify the competent magistrate at the executing State, to validate some request projects, to follow up the going on of the execution of a request and eventually to make the network validate some requests projects, to ensure the follow up on the execution of a request and eventually to anticipate management problems in the particular case of freezing of a boat or a work of art.
Being that CARIN Network is composed from both EU Member States and Non EU Member States, it facilitates the cooperation of national authorities with their counterparts outside of EU. National authorities generally consider that besides the non-formal character of the CARIN Network, the information is provided efficiently. Nevertheless, while possible, they prefer the direct cooperation of their respective ARO, which is a more formal way of communication. Usually, this kind of mutual requests concerns initial information about bank accounts, real estate and other property in a Member State. It seems that this is not always obvious because, in some Member States, national authorities cannot provide this kind of information if not done within a formal legal assistance request. On the other hand, there are States that do not hold centralised databases or real estate registries and may need more time to reply to such requests for information.
Finally, it is important to underline that Member States use other international networks acting in the field of freezing and confiscation of criminal assets.
For example, France supports the action and the best practices of Stolen Asset Recovery Initiative (StAR) (it is a partnership between World Bank Group and the United Nations Office on Drugs and Crime (UNODC) that supports international efforts to end safe havens Page 235 of 477
for corrupt funds), or the Asset Recovery Focal Point Initiative supported by INTERPOL and StAR (It is a global network of asset recovery expert practitioners, accessible through a secure database of contacts on anti-corruption and asset recovery available 24/7 for immediate assistance around the world).
Ireland is, for example, represented by its Criminal Assets Bureau at the Europol Financial Crimes and Property Unit (EFCPU) and contributes in providing support to other Member States in setting ARO242.
Summary
Eurojust is seen as a major actor in information sharing and the enhancement of the awareness for potential for EU wide cooperation in criminal matters.
The EJN, ARO and CARIN are all recognized as important tools for information exchanges and the facilitation of cooperation between Member States. However, AROs in the Member States have different resources and access to information and not all AROs are connected to the SIENA system, thus affecting the secure exchange of more sensitive information. SIENA offers the advantage of a secure system to exchanges information. However, AROs can exchange information through different channels (bilaterally by e-mail, or via other information exchange systems such as SIRENE.
Although the development of networks is important, more important still might be to have one efficient network for all matters involving the freezing and confiscation of criminal assets.
The role of Europol and OLAF as cooperation mechanisms and bodies in the freezing and confiscation of criminal assets is not always reported and awareness of these bodies should be enhanced in this area.
Joint Investigation Teams243 were not specifically mentioned as a major tool of
242 http://www.justice.ie/en/JELR/Annual%20Report%20English%20Version%20FINAL%20- %20CAB.pdf/Files/Annual%20Report%20English%20Version%20FINAL%20-%20CAB.pdf
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cooperation. In interviews however, Joint Investigation Teams including OLAF, Europol and Eurojust was seen as a facilitator of mutual recognition. In effect, the sharing of the information during the investigation phase and participation in the investigation itself helps enforce future freezing and confiscation orders. The latest joint action244 involving Eurojust, Europol and three Member States relating to a high- value car theft ring will naturally lead to the implementation of confiscation orders the enforcement of which should be smoothened by the participation of Member States in the investigations.
3. CHAPTER 3: Non-conviction based orders and mutual recognition of non-conviction-based confiscation orders
3.1. Key findings
3.1.1. Context According to international organizations such as the UNODC, GAFI or G8, non-conviction based (or NCB) orders are a necessary instrument to fight the illicit financial flows generated by criminality. Eurojust and CARIN recommend the implementation of common regulations in the different Member States to confiscate criminal assets.
That is the purpose of the proposal for a Directive established by the European Commission, to be adopted by the European Parliament and the Council.
Indeed, the proposal deals with the confiscation of criminal assets through different processes. First, Member States must enforce an efficient system of confiscation following a criminal conviction (Art 3). Secondly, the proposal implements a system of extended confiscation when, after a criminal conviction, the proceeds of the offence for which the person was convicted are confiscated (Art 4)
243 Pursuant to Council Framework Decision 2002/465/JHA of 13 June 2002. See also https://www.europol.europa.eu/sites/default/files/st15790-re01.en11.pdf
244 See http://www.eurojust.europa.eu/press/PressReleases/Pages/2013/2013-06-11.aspx
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Thirdly, Article 5 of the proposal aims at harmonising a limited number of specific cases of NCBC to ensure that the overall system function and loopholes are eliminated.
3.1.2. The harmonisation of the internal legislation of the Member States is useful To comply with those international recommendations, harmonisation is essential considering that only 13 Member States include a NCBC procedure in their legislation and 9 others (including Croatia) partially allow it. However, the implementation of the NCBC varies from one State to the other. In this respect a classification with 4 confiscation systems has been defined. Two of them are criminal: the NCBC in criminal proceedings and the extended confiscation of a property. The other two are civil proceedings: the standard civil confiscation and the “unexplained wealth” of non-convicted persons. This shows the difficulty of the mutual recognition of these procedures and the usefulness of a harmonisation.
The six remaining Member States do not accept the NCBC. Five of them consider that the implementation of civil confiscation systems in their country would be unconstitutional.
Therefore, the differences between the legal systems would hinder mutual recognition. As a result only prior harmonization of national regulations can ensure that enhanced mutual recognition is possible.
3.1.3. The proposal does not solve the difficulties of the mutual recognition of non-conviction based orders As already stated, the Directive Proposal was not meant to deal with mutual recognition issues. Therefore Article 5 of the Directive Proposal does not alleviate obstacles to mutual recognition of NCBC, especially in regards to the civil proceedings.
Firstly, according to Eurojust Report the term of NCBC is often misinterpreted by Member States as a synonym for “civil recovery” but the principle itself is available in most of them. In fact, the Common Law notion of NCBC is an “in rem” procedure regarding the asset and not the owner, which is distinguished from a criminal proceeding even if it requires a link, which may be a presumption, between the offence and assets. As a consequence, the owner of the property is a third party to the procedure who can defend his rights through a specific process. On the other hand, the proposal for a Directive does not consider the NCBC as a specific non-criminal procedure focalised on the asset but as a procedure against an offender whose assets are confiscated.
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Moreover, the Council General Approach allows the Member States to choose the type of jurisdiction responsible of the NCBC: criminal, civil or administrative. This possibility is problematic because of the numerous obstacles to the recognition of a civil NCB, which is difficult in 19 Member States. Indeed, a few of them acknowledges the possibility of civil measures to confiscate the proceeds of illegal activity. Moreover, some of the Member States applying civil confiscation only recognise a NCBC issued of a criminal proceedings245. Only 4 Member States seem to have the possibility to apply mutual recognition and the other ones are facing an uncertainty with regard to this kind of procedure. For all these reasons, European legislation which does not define clearly the principle of the NCBC and does not choose the type of jurisdiction competent for this matter does not facilitate the mutual recognition of NCBC, even in the States that have NCBC . Besides, the United Kingdom does not participate in the Directive.
3.1.4. Recommendations In the present situation, the mutual recognition of NCBC cannot function well between the Member States. To achieve such a purpose, the Directive needs to identify the NCBC as a criminal proceeding even if the confiscation order is issued by a civil jurisdiction. As a consequence, any civil NCBC with the defined features will be equivalent to a criminal one in any Member State without changing the national definition of the NCBC.
In conviction based confiscation, the mutual recognition in the Member States depends on the criminal offence and has to respect the principles established by the ECHR. The criminal nature of the decision is defined by the Court, facilitating mutual recognition since the process is similar in all Member States. The question is more complicated with extended confiscation, which is based on a prior conviction, but where assets confiscated go beyond the “proceeds” related to the conviction. This kind of decision should be placed under the same regime as NCBCs: such that any confiscation has a criminal feature in order to facilitate recognition between Member States.
Of course, this obliges the decision to respect the safeguards provided by the Directive, in conformity with the ECHR. Indeed, the European Court of Human Rights considers that the nature of the jurisdiction – administrative, civil or criminal – does not influence the nature of the decision. Any judgement presenting the typical elements of a criminal decision has to respect the guarantees of the ECHR, no matter which jurisdiction it emanates from.
245 Replies of Bulgaria and the Slovak Republic to the Questionnaire of the Council of the EU, 12219/12 dated 4 July 2012, pp. 7 and 93.
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Regarding to the protection of the third parties, the recognition of the NCBC requires that the possible conflicts of law and of jurisdiction are solved. In an “in rem” process, the owner is a third party to the procedure and has to be able to defend himself. Even if the proposal defines the NCBC as a criminal decision, the action of a third party should depend on the location of the asset because that is the way the good faith of the owner or the effects of the confiscation on the creditors may be best appreciated.
The adoption of these recommendations will allow the mutual recognition in the Member States and will prevent the difficulties linked to the specificities of each national judicial system.
3.2. National mechanisms for non-conviction based confiscation orders
3.2.1. Criminal versus in rem non-conviction based confiscation orders 3.2.1.1. Existence of a mechanism that allows for non-conviction based confiscation orders
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No
Partially
Yes
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NCB MS No Partially Yes AT BE BG CY CZ DE DK EE EL ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK
3.2.1.2. Nature of the confiscation order
NA Criminal Criminal or Civil AT
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BE BG CY CZ DE DK EE EL ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK
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N/A
Only criminal
Civil possible
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3.2.2. Situation in the different Member States 3.2.2.1. Austria AT Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Criminal No
The public prosecutor can apply for an independent Court decision on forfeiture, extended forfeiture or recovery, where there is sufficient reason to believe that the requirements for the sanctions are satisfied and a decision in a criminal proceeding is not possible246. In this case the competent court has to adjudicate on the prosecutor’s application in independent proceedings after a public and an oral hearing. The competent court is the district court247 of the district where the criminal act took place or if the venue of the criminal act is unknown or abroad the district court with the jurisdiction for the location of the property at the time of the proceedings has to decide.
Additionally to the provisions, the Austrian Criminal Code mentions the possibility of a non- conviction based recovery248. Accordingly assets used in order to commit a punishable act or designated therefore or which are proceeds of such an act may be subject to recovery, if the specific nature of the asset is dangerous and it is likely that other criminal acts will be carried out with the asset. It is possible to recover assets due to their specific nature, even if no individual may be prosecuted or adjudged for a related punishable act249.
3.2.2.2. Belgium BE Non-conviction-based Civil / Criminal Adoption of Directive
246 According to the section 445 of the Austrian Code on Criminal Procedure (ACCP)
Section 445 “(1) Where there is sufficient reason to believe that the requirements for forfeiture (Section 20 APC), extended forfeiture (Section 20b APC) or recovery (Section 26 APC) are satisfied, without it being possible for a decision to be made in criminal proceedings or in proceedings to commit an individual to one of the institutions referred to in Sections 21 to 23 APC, the public prosecutor shall make an independent application for such a property-related order.(2) Upon application for forfeiture, extended forfeiture or recovery, the competent court shall issue a judgment in independent proceedings after a public and oral trial”.
247 Bezirksgericht.
248 Section 26 APC.
249 Section 26 para 3 ACC.
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confiscation orders require changes in the national system No Yes
Non-conviction-based confiscation does not exist in Belgium.
Confiscation is a considered a sanction and must follow a criminal conviction250.
3.2.2.3. Bulgaria BG Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Civil
A new Law251 of 2012 and which has not yet been implemented although it is in force, envisages two stages of non-conviction based confiscation proceedings, namely civil confiscation:
- Proceedings at the Commission for Illegal Assets Forfeiture (which probes the sources of the acquired assets and ensures that precautionary measures are taken; and - Forfeiture proceedings before a civil court. This procedure is parallel to the criminal law based order. This procedure is activated under certain provisions of the law: acquisition of property of significant value, for which it could be reasonably presumed that It has been acquired from criminal activity and against whom a prosecution has been started for specific crimes as defined in an exhaustive list of crimes from the Criminal Code (human trafficking, drug trafficking, money laundering, fraud, bribery, smuggling, participation in criminal organisation).
250 According to the article 42 of the Criminal Code, the confiscation is applied to : 1. the things forming the object of the offence and those who have served or who have intended to commit it, when the property belongs to the convicted person ; 2. the things that have been produced by the offence (crime product) ; 3. the proceeds directly stemming from the crime, as well as to the goods and values they have been converted into and to the income generated from investing these proceeds. The proceeds from the crime can be confiscated from the third party as well.
251 On the third of May 2012 the National Assembly of Bulgaria adopted a new law based on civil confiscation without criminal conviction entered into force on its second reading.
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The new law foresees that the proceedings for forfeiture in favour of the State are governed by the Civil procedure code, following the principles of the so-called "civil confiscation". The civil procedure approach applies when threshold exceeds 250 000 BGN (thus no need for the penal proceeding anymore).
Bulgarian Illegal Assets Forfeiture Commission will be entitled to begin such proceedings immediately after a person has been indicted for a crime from which it may be presumed that he has benefited.
Thus it will be no longer necessary for the Commission to wait until the end of the three- stages procedure engaged before the Criminal Courts.
The Commission will be entitled to act also against third parties but only if they knew or it was impossible not to know that the property which they have acquired has an illegal origin. It is foreseen that property that has been transferred to relatives or third persons can also be subject of forfeiture. Those persons shall have the possibility to prove at court that they didn't know about the illicit origin of the acquired property. Indeed, the new legislation establishes an entirely new legal framework for the Commission's work. The former legislation allowed the Commission's claim only after a final conviction has entered in force. The new law forecasts that the Commission can proceed from the moment of the person has been indicted.
3.2.2.4. Cyprus CY Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Partially Criminal No
In Cyprus, the non-conviction-based freezing and confiscation orders252 can be enforced in cases where a suspect has fled the jurisdiction or has died, and if certain conditions are satisfied. The non-conviction-based freezing and confiscation order is provided by the AML Law.
252 Section 32 and 33 of the AML Law.
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Cyprus has no provision allowing civil forfeiture of assets.
3.2.2.5. The Czech Republic CZ Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Criminal No
The Czech Republic has no system of non-conviction based confiscation of proceeds of crime at present. The Czech authorities have prepared new legislation with possible added taxation on such property, but this is still under development
This mechanism is based only in criminal law.
According to the criminal code253 a court can decide about forfeiture:
If a court cannot impose a punishment to a perpetrator (i.e. he/she is under aged, insane,…) or decided not to punish a perpetrator in petty crimes, or if an item is dangerous or items are proceeds of crime that were transferred to other persons.
Forfeiture (zabrání) is one of protective measures (non-conviction based confiscation).
3.2.2.6. Germany DE Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Criminal ?
A civil seizure or confiscation is theoretically possible in line with German legislation. However, a practical case proceeding is still required in order to define how the relevant courts will act upon a foreign non-conviction-based seizure, forfeiture or confiscation
253 Sec 101 of the CC.
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According to the Criminal Code254, the forfeiture or confiscation of the object may be independently ordered if: for factual reasons no particular person may be prosecuted or convicted for the crime, or prosecution of the crime is barred by the statute of limitations, or for legal reasons no particular person may be prosecuted and the law does not provide otherwise, or the court dispenses with punishment or if the proceeding is terminated pursuant to a provision which permits this in the discretion of the public prosecution office or the court or with the agreement of both and if the preconditions under which the measure is prescribed or permitted otherwise exist.
3.2.2.7. Denmark DK Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system No Yes: No Mutual legal assistance
The non-conviction-based confiscation does not exist in Denmark.
However, confiscation may take place for preventive purposes without obtaining the conviction of the perpetrator255. Confiscation, proceeds from criminal acts, can take place even if the perpetrator is deceased256. 3.2.2.8. Estonia
EE
254 Section 76a Independent Orders.
255 Section 77a of the Criminal Code.
256 It follows from Section 76 (5) of the Criminal Code that confiscation under Section 75 (1).
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Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system No Yes
Estonia does not have mechanisms to apply a non-conviction based confiscation.
3.2.2.9. Greece EL Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Partially No
In Greece, the confiscation can be ordered as a security (protective) measure against whoever is in possession of instrumentality, proceeds etc provided that they pose a threat to public order and irrespective of whether a certain person has been convicted for the relevant offence257.
It is generally possible to confiscate proceeds of crime without a conviction in case of money laundering and of financing of terrorism 258. Non-conviction-based confiscation may be ordered when the reasons for not obtaining a conviction are other than lack of evidence and more specifically where no criminal proceedings have been initiated because of the death of the offender or where prosecution was terminated or declared inadmissible (e.g. due to statute of limitations). There have been few – if any – such cases, due among others to the restrictive requirements for the application of the main provision allowing such confiscation.
3.2.2.10. Spain ES Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the
257 Article 76-2.
258 Pursuant to Art. 46 par. 3 of Law 3691/2008 “Prevention and suppression of money laundering and of the financing of terrorism”.
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national system No Yes
Non-conviction-based confiscation does not exist in Spain.
3.2.2.11. Finland
FI Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Partially Criminal No
A general condition for confiscation is an act criminalised by law259.
However, it is not necessarily required that the person has been convicted for a crime, but it has to be proven that a crime has been committed. In this sense, legislation allows for non-conviction based confiscation. The Criminal Code260 lists situations where confiscation is possible even if an act criminalised by law does not contain all elements of a criminal offence.
These situations are:
Where the perpetrator has not attained the age of fifteen years at the material time, or is without criminal capacity; Where the perpetrator is exempt from criminal liability pursuant261 (e.g. mistake as to the unlawfulness of the act under certain conditions, self-defence etc.) Where a corporation may be sentenced to a punishment262 even if the individual committing the offence cannot be identified or for some other reason cannot be sentenced to a punishment.
259 Section 1(1) of chapter 10 of the Criminal Code a general.
260 Section 1(2) of chapter 10 of the Criminal Code.
261 Chapter 4 of the Criminal Code.
262 Chapter 9 (which contains provisions on criminal liability of legal persons).
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Civil law based confiscation is not possible in Finland.
3.2.2.12. France
FR Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Partially ?: Guarantees
Currently there is no mechanism for non-conviction-based confiscation in France.
There is possible only the confiscation based on a criminal conviction. Recently the confiscation has been extended to assets that are not strictly the product of the crime while a new law has authorized the freezing of assets from the initial stages of the investigation.
Furthermore, confiscation is foreseen as a complementary sentence for offences263 concerning anyone who is in relation with the person well-known for committing criminal offences and who is not able to justify his/her income.
3.2.2.13. Hungary
HU Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Criminal Yes: guarantees
In Hungary, non-conviction-based confiscation is possible in some exceptional cases as foreseen by the law: According to the Criminal Code, the confiscation of objects or assets may be ordered, even if the perpetrator cannot be punished due to: being a minor, mental disorder (note: in these cases, the accused will be acquitted),
263 Under the article 321-6 and 311-10-1 of the Criminal Code.
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if the perpetrator has been reprimanded by the prosecutor or the court264. Hungarian law differentiates between the termination and preclusion of criminality, but both can give grounds to non-conviction based confiscation. The new Criminal Code also establishes termination of criminality as an exception, e.g. death, statute of limitations or pardon. Preclusion is included in the Criminal Procedure Act. According to the Criminal Procedure Act, non-conviction based confiscation can be ordered, if criminality was precluded by minority, lawful self-defense or other grounds as defined in the Criminal Code. The Criminal Procedure Act also empowers the court to order confiscation, if the procedure itself (and not criminality) was terminated, or because there was no private motion, report or request265. The Criminal Procedure Act further broadens this power by introducing a special criminal procedure: upon the motion of the prosecutor, if no criminal proceedings have been launched, or the proceedings have been terminated or suspended, the court shall decide on confiscation, confiscation of assets of any seized items266. The ordering of preliminary confiscation is also possible in the Criminal Procedure Act 267. 3.2.2.14. Ireland IE Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Yes: No mutual legal assistance
The national mechanism for non-conviction based confiscation orders is governed by the Proceeds of Crime Act, 1996.
The application taken under is in rem rather than in personam268. Procedures are set out269 allowing for an application to be brought to the High Court to have assets which are believed to be (either directly or indirectly) proceeds of criminal activity, confiscated.
264 According to Sections 77 and 77/C.
265 Sections 332 and 334.
266 Section 569.
267 Pursuant to Section 156, if the possession of the seized object threatens the public order or violates the law, the court shall order confiscation until the prosecutor submits the indictment
268 Supreme Court decision of Murphy -v- G.M.
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An interim order to prohibit the respondent from disposing of assets, with duration of twenty-one days may be made if it can be shown that a person is in possession or control of: specified property and that the property constitutes, directly or indirectly, proceeds of crime, or specified property that was acquired, in whole or in part, with or in connection with property that, directly or indirectly, constitutes proceeds of crime, and that the value of the property or, as the case may be, the total value of the property is not less than [IR]£10,000 270
3.2.2.15. Italy IT Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Civil No
The non-conviction-based confiscation exists in Italy.
There are measures for either personal or asset seizure and consequent confiscation that may be carried out by law enforcement agencies271 against subjects with illegal behaviour or merely suspected of crimes272. In particular, whenever an individual is unable to justify the origin of its property and his/her lifestyle does not match his/her official income it is possible to seize any thus disproportionate asset.
This legal tool 273in the pre-trial context is more appropriately defined as « a judicially managed administrative procedure ».
269 Sections 2, 3 and 4.
270 S.2, Proceeds of Crime Act, 1996.
271 The Guardia di Finanza.
272 Laws 575/1965, 646/1982 and the new 159/2011.
273 Law 159/2001.
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3.2.2.16. Lithuania LT Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Criminal Yes: No Legal framework
Confiscation of criminal assets is applicable only in criminal proceedings.
The Criminal Code defines confiscation of property as the compulsory uncompensated taking into the ownership of the State of any form of property subject to confiscation and held by the offender or other persons274.
According to Lithuanian laws, confiscation of property is a penal sanction, not a penalty, therefore it is applied not only after convicting a person, but also while releasing a person from punishment or from criminal responsibility.
Moreover, according to the Criminal Code 275 confiscation of property could be applied while terminating the pre-trial investigation.
According to the Criminal Code confiscation of property is a penal sanction which may be imposed on an adult person released from criminal liability276. Confiscation of property may also be imposed on juveniles and legal persons. Moreover, confiscation of property may be imposed in conjunction with a penalty. Thus confiscation of property is possible only in criminal proceedings.
Confiscation of property may be applied in respect of a person who is not a party in the criminal case (confiscation from a third party). The property which belongs to another natural or legal person and which is subject to confiscation shall be confiscated irrespective of whether that person has been sentenced for the commission of the act prohibited by this Code or not, if :
274 Article 72, paragraphs 1-3 of CC.
275 Article 94.
276 Chapter VI of CC (Release from criminal liability) or released from a penalty on the grounds provided for in Chapter X of CC (Suspension of a sentence and release from a penalty).
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when transferring the property to the offender or other persons, he was or ought to and could have been aware that such property would be used for the commission of the act prohibited by this Code; this property has been transferred to him in a fake transaction; this property has been transferred to him as to a family member or close relative of the offender; this property has been transferred to him as to a legal person where the offender, his family members or close relatives hold a managerial position, membership in its management body or hold not less than fifty per cent of the shares (interest, contribution, etc.); when acquiring this property, he or the persons who held the managerial position and had the right of representation of and decision making on behalf of or the control over the performance of the legal person were or ought to and could have been aware that this property is an instrument, means or result of the act prohibited by the Criminal Code.
3.2.2.17. Luxembourg LU Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Partially Criminal Yes
Currently there is no mechanism for non-conviction-based confiscation in Luxembourg.
Nevertheless, there is a limited possibility of non-conviction-based confiscation277 but only for proceeds generated by money laundering or terrorism. Confiscation of the object, direct or indirect proceeds or any patrimonial advantage of these crimes including revenues generated by the proceeds can be confiscated even in case of an acquittal, penalty exemption, extinction or prescription of public prosecution.
3.2.2.18. Latvia LV
277 Article 32-1 CP.
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Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Criminal No
According to the Latvia Criminal Procedure Law, the confiscation of property to be executed in Latvia should be determined in criminal proceedings taking place in Latvia.
Therefore, the non-conviction-based orders are foreseen by the Criminal Procedure Law and can be issued within a criminal proceeding.
The Criminal Procedure Law provides that a person directing the proceedings has the right, in the interests of solving the financial matters, which have come about in pre-trial criminal proceedings, in timely manner and in the interests of the economy of proceedings, to separate the materials from a criminal case regarding criminally acquired property and to initiate proceedings, if the following conditions exist:
the totality of evidence provides a basis for believing that the property that has been seized or upon which an attachment has been imposed is of a criminal origin or related to a criminal offence; due to objective reasons, holding the trial is not possible in the near future (in a reasonable term).
If the conditions referred to in the previous paragraph exist, a person directing the proceedings shall take a decision to initiate proceedings regarding criminally acquired property and transfer the criminal case regarding the criminally acquired property to a court.
In adjudicating materials regarding criminally acquired property, a court shall decide:
whether the property is related to a criminal offence or is of criminal origin; whether there is information regarding the owner or lawful possessor of the property; whether a person has lawful rights to the property; actions with the criminally acquired property.
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If a court finds that the connection of property with a criminal offence has not been proven or the property is not of criminal origin, such court shall take a decision to terminate proceedings regarding the criminally acquired property.
There is reversed burden of proof for criminally acquired property.
3.2.2.19. Malta
MT Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system No Yes
Currently there is no mechanism for non-conviction-based confiscation in Malta.
However, the applicability of a procedure of civil forfeiture of assets is restricted to a very limited number of laws: the Exportation of Certain Articles (Prohibition) Ordinance, the Customs Ordinance, and the Industrial Property Protection Ordinance, amongst others.
Under the Customs Ordinance the forfeiture occurs automatically, and independently of whether the proprietor is the defendant or a third party who is not involved in the offence.278 In addition, the forfeiture takes place independently of the knowledge of the commission of the offence in question.
3.2.2.20. Netherlands NL Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system No Yes
Non-conviction-based confiscation does not exist in Netherlands.
3.2.2.21. Poland
278 P v Osama Salem Algrig [1992] Court of Criminal Appeal.
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PL Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Criminal
Non-conviction-based confiscation orders may be issued in criminal proceedings.
In criminal proceedings non–conviction orders may be issued in following situations: Discontinuance of proceedings due to the insanity at the moment the forbidden act was committed279 Discontinuance of proceedings because the social danger of the criminal act is trifling 280 Conditional discontinuance of the proceedings281 There is a circumstance which precludes punishing of the perpetrator of the criminal act The proceedings are discontinued because the perpetrator of the crime was not identified if there is a regulation allowing forfeiture282
According to the Code of Contraventions, confiscation of objects can be ordered even if there is a circumstance excluding punishment of the perpetrator283 Non conviction based confiscation order in civil proceedings may be issued on the base of the of the Civil Code284 but in case of forfeiture of a performance to State Treasure if the performance was knowingly made in exchange for perpetrating an act forbidden by statute or for a vile purpose.
3.2.2.22. Portugal
279 Article 99 CC.
280 Article 100 CC.
281 Article 100 CC.
282 Article 323 par 3 CCP.
283 Article 28 par. 3.
284 Article 412.
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PT Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Partially Criminal Yes
Portugal has provisions allowing for the confiscation of the direct proceeds of crime and instrumentalities of crime without a criminal conviction. Confiscation of the indirect proceeds of crime without a criminal conviction is prohibited.
The mechanism is implemented through a criminal law based order.
In Portugal, confiscation of proceeds and instrumentalities of crime is ordered by a criminal court in the context of a criminal proceeding based solely by the needs of prevention. It is not an accessory penalty, because it has no relation with the fault of the suspect or accused person, nor an effect of the conviction, because does not depend on the existence of a conviction and not even a security measure. The objects used or intended to be used for the commission of a typical unlawful act, or which have been produced thereby, are confiscated when, by virtue of their nature or of the circumstances of the case, they endanger the safety of the persons, the morality or the public order, or seriously risk to be used for the commission of new typical unlawful acts285. It is possible to confiscate even if no specific person may be punished for the act.
3.2.2.23. Romania RO Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Partially Criminal Yes
At this moment, there is no special mechanism in Romania regulating non-conviction based confiscation.
In spite of this, one notes that confiscation does exist without conviction because it is a safety measure and not a punishment.
285 Article 109 of the Criminal Code (Confiscation of instrumentalities and proceeds).
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For example, a confiscation order can be still issued by the prosecutor when the criminal investigation has been stopped, or when the charges upon the person have been dropped by the prosecutors.
The court can also solve the case through a civil action if situations such as amnesty, statutes of limitation, death of the defendant or settlements286.
3.2.2.24. Sweden SE Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Partially Criminal Yes
National non-conviction based confiscation orders are only possible in very specific cases287.
This provision makes it possible to confiscate property as a result of a crime if the offender has died or if, for some other reason, a criminal sanction cannot be imposed. This is, furthermore, only possible if, in proceedings pertaining thereto, a summons has been served within five years from the time when the crime was committed.
There is, however, no possibility to confiscate property in cases where conviction cannot take place due to long-term sickness of the suspect or in cases where conviction is not possible within reasonable time limits because the suspect is absconding and there is a risk that conviction will not be possible due to prescription. 3.2.2.25. Slovenia SI Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Civil
286 Pursuant to the art. 346 of the Code of Criminal Procedure
287 Chapter 36 Section 14 of the Swedish Penal Code e.g. if a sanction no longer can be imposed because of the death of the offender.
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The non-conviction-based confiscation in Slovenia has been adopted recently288.
This mechanism is implemented through a civil law based order.
3.2.2.26. Slovakia SK Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Criminal Yes
The Code of Criminal Procedure regulates a non-conviction based confiscation and the enforcement of such orders.
The Criminal Code permits confiscation in absence of prior conviction289. If the punishment is not imposed, the court shall impose the confiscation of items if: It belongs to a person who may not be prosecuted or convicted, It belongs to an offender whose punishment the court waived or to an offender against whom criminal prosecution was terminated or to an offender against whom criminal prosecution was conditionally suspended or to an offender against whom criminal prosecution was terminated due to the approval of a settlement, It is in regard to goods without control stamps or without other technical control measures required by generally binding legal regulations for its identification for tax purposes,
288 Official Gazette of the Republic of Slovenia, No. 91/2011.
289 Article 83 Confiscation of Items (1) If the punishment of the forfeiture of items referred to in Art. 60 Subsection 1 was not imposed, the court shall impose the confiscation of items if a) it belongs to a person who may not be prosecuted or convicted, b) it belongs to an offender whose punishment the court waived or to an offender against whom criminal prosecution was terminated or to an offender against whom criminal prosecution was conditionally suspended or to an offender against whom criminal prosecution was terminated due to the approval of a settlement, c) it is in regard to goods without control stamps or without other technical control measures required by generally binding legal regulations for its identification for tax purposes, d) the circumstances of the case justify the assumption that the matter could be a source of financing terrorism, or e) the safety of persons or assets, or another similar public interest requires it.
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The circumstances of the case justify the assumption that the matter could be a source of financing terrorism, or The safety of persons or assets, or another similar public interest requires it.
A protective measure such as confiscation of an asset290 may not be imposed where a person was not criminally responsible at the time of commission of a crime due to his/her insanity. However, even these cases it is not excluded that a thing will be confiscated on grounds of public interest291. But it results from wording of this provision that thing may be confiscated after final meritorious decision at least within pre-trial proceedings.
Death of suspected or accused person represents grounds of inadmissibility of further criminal prosecution292. In such cases, criminal prosecution is discontinued and grounds for confiscation of an asset293 disappear because as a consequence of death, the person loses his/her capacity to have rights and duties and his/her property rights are transferred to inheritors and taxed.
If accused person is ill or has fled, this is not grounds for discontinuance of criminal prosecution but only for suspension thereof294 because during suspension, the limitation period is also suspended. In such cases, confiscation of an asset under the Criminal Code is not possible.
3.2.2.27. United Kingdom UK Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Civil No
290 Section 83, par. 1 b, Criminal Code
291 Section 83, par. 1 e), Criminal Code.
292 Section 9, par. 1 d), Code of Criminal Procedure.
293 Section 83, par. 1 a), Criminal Code.
294 Section 228, par. 2 a), b), Code of Criminal Procedure.
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The proceeds of Crime Act295 includes a non-conviction based confiscation scheme known domestically as ‘civil recovery’.
The principal criteria for civil recovery are: Such proceedings are essentially in rem civil proceedings The enforcement agency must prove to the High Court that particular kinds of criminal conduct have occurred and that the property was obtained through unlawful conduct; There are protections for bona fide purchasers of property and victims of crime; There is explicit provision that courts may not make recovery orders which are incompatible with Convention rights; Functions must be exercised in a way to best reduce crime and that Guidance must indicate that the reduction of crime is in general best secured by criminal investigations and criminal proceedings. Criminal prosecution would ordinarily have been considered and either was not pursued for evidential or resourcing reasons, could not be instigated or successfully completed (i.e. the defendant fled the jurisdiction/died), or was successful but there was no subsequent criminal confiscation proceedings296; Recoverable property must have been identified and have an estimated value of at least £10,000297; Proceedings must ordinarily be brought within 20 years of when the property was obtained; Recoverable property must include property other than cash or negotiable instruments (although cash is recoverable if it is in addition to other property);
There are also powers that provide for a confiscation order to be made in cases when the accused has absconded prior to conviction298. In such cases, a confiscation order may be made two years from the date the offender absconded299.
295 Part 5 of the Proceeds of Crime Act 2002 (‘Civil recovery of the proceeds of unlawful conduct’
296 The Attorney General has produced guidelines on when ‘civil recovery’ powers should be used. They can be seen here: https://www.gov.uk/asset-recovery-powers-for-prosecutors-guidance-and-background-note- 2009
297 Section 287 POCA and the Proceeds of Crime Act 2002 (Financial Threshold for Civil Recovery) Order 2003
298 Part 2 of the Proceeds of Crime Act 2002.
299 Confiscation under Part 2 of POCA is usually undertaken on the basis of a conviction.
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3.2.2.28. Croatia
Non-conviction-based Civil / Criminal Adoption of Directive confiscation orders require changes in the national system Yes Criminal
Croatia has adopted in 2011, a new Law on Confiscation of Proceeds of Crime and Offence300 which governs the procedure for determining, ordering confiscation of the proceeds of crime, the enforcement, handling of seized property and assets, compensation of a person injured by the offense and the protection of the rights of third parties. The Court will act according to the provisions of the criminal procedure law, unless otherwise required by this Law. Where criminal proceedings are interrupted prior to the confirmation of the indictment, and there is there a probability that the property is gain of crime, the confiscation process will continue on the prosecutor’s proposal301. This means that the Court may decide, upon the motion of the State attorney, the injured party or the prosecutor, on the confiscation of the property that is probably a proceeds of crime, under the condition that its value is at least 5000 000 HRK.
Summary
Forms of non-conviction based confiscations exist in many Member States. Precautionary measures involving forfeiture of assets, administrative confiscations and civil based confiscations can all be non-conviction based.
Many Member States have adopted non-conviction based regulations for the confiscation of criminal assets only recently. Croatia’s 2011 law on the topic is a good example of a country adopting a specific regulation targeting a loophole in the legal system whereby the offender disappears in the middle of proceedings whilst the evidence clearly points to criminal activity and assets that are the proceeds of crime.
300 Zakon o postupku oduzimanja imovinske koristi ostvarene krivic nim djelom i prekršajem, Narodne novine br.: 145, od 24.12.2010. godine; izvor – internetska stranica Narodnih novina Republike Hrvatske.
301 According to the article 7 of this Law.
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The new law enables the confiscation of the assets where the evidence is such that they are most probably proceeds of crime even where the potential offender has absconded.
However, some Member States are reluctant to accept non-conviction based confiscations where the “offender” died during the proceedings. It is argued that in such a case the estate has passed on to his/her successors and that taxes on inheritance is to be paid.
In some countries, non-conviction based confiscations are not allowed on the criminally insane whereas in others this is typically a triggering element of such a tool.
Further, some countries state that non-conviction based confiscations are permitted for the direct proceeds of crime, but may not be extended to other assets.
There is some confusion on the exact nature of a confiscation and whether in cases of civil non-conviction based confiscations fundamental rights are more likely to be affected. However, beyond the issues relating to definitions, it seems that Member States are no strangers to non-conviction based confiscation and that the European Court of Human Rights has dealt with these many times and provides sufficient guidance for a use of such tools within the framework of fundamental rights protection.
3.3. Scope of the recognition of non-conviction-based confiscation orders issued by another Member State (civil/criminal) Based on the interviews conducted, it appears that there would hypothetically be obstacles to the enforcement of civil non-conviction based confiscation orders emanating from other Member States. The result is hypothetical because of the lack of any experience by almost all of the Member States with the enforcement of such orders.
A small majority of Member States would not automatically enforce criminal non- conviction based confiscation orders.
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3.3.1. Obstacles to the enforcement of civil non-conviction-based confiscation orders issued by another Member State
Answers to the question as to whether the receiving Member State would find obstacles in their national legislation to the enforcement such an order. Almost all Member States answered in the affirmative.
The table below provides the reasons given.
MS National mechanism Obstacles AT Criminal Yes No legal framework BE NA Yes No legal framework BG Civil No - CY Criminal Yes No system of civil forfeiture in rem CZ Criminal Yes Constitution DE Criminal Yes In case of death of a person DK NA Yes No mutual legal assistance EE NA Yes Constitution EL Criminal Yes ES NA Yes FI Criminal Yes Constitution FR Criminal Yes Guarantees and double
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incrimination HR Criminal Yes Procedural rights HU Criminal Yes Procedural rights IE Civil Yes No mutual legal assistance IT Civil No LT Criminal Yes No legal framework LU Criminal Yes No legal framework LV Criminal Yes MT NA Yes No legal framework NL NA Yes Freezing is possible but not confiscating PL Criminal Yes No legal framework PT Criminal Yes No legal framework RO Criminal Yes No legal framework SE Criminal Yes No civil confiscation SI Civil Yes Recognition procedure SK Criminal Yes No legal framework UK Civil No -
3.3.2. Situation by Member State on the enforcement of civil non-conviction-based confiscation orders issued by another Member State
3.3.2.1. Austria AT National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes : No legal framework
The order has to be issued following criminal proceedings302.
302 FD 2006/783/JHA.
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3.3.2.2. Belgium BE National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State NA Yes : No legal framework
The execution of non-conviction-based confiscation orders is legally not possible, because the confiscation can be ordered only on the bases of a criminal conviction imposed by a judge in criminal proceeding303.
3.3.2.3. Bulgaria BG National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Civil No
The civil non-conviction-based confiscation orders can be recognised and executed by Bulgarian authorities.
3.3.2.4. Cyprus CY National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes : No system of civil forfeiture in rem
303 Article 4 of the Law of 20 May 1997 on International Cooperation on the Execution of Seizure and Confiscation.
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They are obstacles to the enforcement of a civil non-conviction-based confiscation order issued by another Member State because Cyprus has no system of civil forfeiture in rem proceedings
3.3.2.5. The Czech Republic CZ National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes : Constitution
There is no legal framework in the Czech Republic for a civil non-conviction-based confiscation order and for to recognising such one issued in other state304. Such a procedure is completely unknown in Czech Republic. There is also no international treaty or EU binding legislation or even EU non-binding guidelines setting basic features of such legislation.
3.3.2.6. Germany DE National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes Checking procedural rights
A civil seizure or confiscation is theoretically possible in line with German legislation.
However, in practice the relevant courts may check that fundamental rights have been effective when enforcing a foreign non-conviction-based seizure, forfeiture or confiscation.
304 I.e. Art 2 (3) of the CZ Constitution: State power shall serve all citizens and may be applied only in cases, within limits and by methods defined by law.
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The relevant German legislation305 deserves to be mentioned since it offers, in combination with the possibility for attachment in rem, within a civil law legal system, an equivalent to non-conviction based confiscation.
This is a fairly recent evolution in legislation, and it still remains to be seen how broadly courts will apply the relevant provisions.
3.3.2.7. Denmark DK National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State NA Yes : No mutual legal assistance
Denmark has no experience on international co-operation regarding civil and criminal non- conviction-based confiscation orders.
3.3.2.8. Estonia EE National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State NA Yes : Constitution
Since Estonia does not have a system of a non-conviction based confiscation, there may be obstacles to enforce the NCB confiscation orders issued by another Member States.
The international cooperation (including recognition and enforcement of the judgements made by foreign courts) is not allowed in cases where there is a conflict with the general principles of Estonian law306. According to the general principles, including the ones enshrined in the Constitution, a penalty may be imposed only based on the final conviction
305 Section 73d of the Criminal Code.
306 Art 436 para 1 (2) of the CCP.
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by the court decision. As stated below, the confiscation is considered to be a measure of punitive nature and therefore requires a criminal conviction to be applied.
Therefore, it follows that the enforcement of a NCB confiscation order will be in conflict with the general principles of Estonian law and therefore the enforcement of a non- conviction-based confiscation order rejected on this basis.
However, the Estonian government is assessing how to enable the enforcement of such decisions, but there is no set timeframe for any regulatory reform at present.
3.3.2.9. Greece EL National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal YES because not criminal
The enforcement of such confiscation orders could theoretically be hindered on the basis of the grounds for refusal provided by Art. 18 of the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, e.g. the one in par. 1 a.
There is extremely limited practical experience in such matters and it is doubtful to what extent the relevant provisions relating to international judicial cooperation have ever been applied in practice.
3.3.2.10. Spain
ES National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State NA Yes
There are difficulties in cooperating with States where NCB is possible.
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3.3.2.11. Finland FI National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes : Constitution
Finland has implemented obligations set in FD 2006/783/JHA, which obliges Member States to recognise and execute confiscation orders which have been issued by a Court competent in criminal matters and following proceedings in relation to a criminal offence.
Accordingly, it is not currently possible to enforce civil non-conviction based confiscation orders.
Whether or not this will be possible in future, depends on the content of a (possible) future instrument on mutual recognition. This question does not necessarily depend on the content of the draft Directive on freezing and confiscation, since the draft Directive is a harmonising instrument, not an instrument on mutual recognition.
Due to constitutional reasons there would be difficulties in recognising and enforcing such confiscation orders, which are based on reversed burden of proof.
3.3.2.12. France FR National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes : Guarantees and double incrimination
The only one case law existing until now: the "Crisafulli" case (Crim. 13 November2003 - appeal n°03-80371) concerned the execution in France of a preventive confiscation order issued by the Italian judicial authorities regarding a real property located in Antibes and strongly suspected to be the product of money laundering provided by drug trafficking, does not allow to have a clear and final answer on this question.
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In this case, the Court ruled that the conditions for executing the Italian order are fulfilled if:
The confiscation order issued by the foreign authorities is final and enforceable;
The asset subject to confiscation may be confiscated in similar circumstances under French law (article 131-21 and 324-7 CP); and The execution of the order does not interfere with the French law and order, as the asset has been acquired by laundering of money coming from drug trafficking.307
But the difficulty on the understanding of this decision is that the article 131-21 and 324-7 mentioned by the Court do not permit confiscation before conviction as they refer to complementary sentences.
Therefore, it is not possible to affirm with certainty that the non-conviction-based confiscation orders will be recognised and executed in France without difficulties.
3.3.2.13. Hungary HU National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes : Guarantees
According to the Hungarian national law, “criminal proceeds” is only possible to be confiscated in criminal proceedings by a criminal court. Regarding this fact, executing a civil non-conviction based order would cause problems for Hungary. The guarantees of the criminal proceedings apply primarily in the criminal proceedings and their application is not unconditional in the context of civil or other (e.g. administrative) proceedings.
307 See the extract of the Court decision in the French languague : « Attendu que, pour faire droit à cette demande, les juges du fond constatent que les conditions prévues pour cette exécution par la loi du 13 mai 1996, notamment en ses articles 12 à 14, sont réunies ; qu’ils relèvent ainsi que la décision de confiscation est définitive et exécutoire et que le bien confisqué est susceptible de l’être dans des circonstances analogues selon la loi française, en ses articles 131-21 et 324-7 du Code pénal ; qu’ils ajoutent enfin que l’exécution de la décision précitée ne peut porter atteinte à l’ordre public dès lors que la requête tend à la confiscation d’un immeuble acquis par le blanchiment de sommes issues d’une organisation criminelle ».
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3.3.2.14. Ireland IE National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Civil Yes: No mutual legal assistance
Ireland cannot afford mutual legal assistance in relation to requests received arising from non-conviction based orders. However, it may be possible to take action using domestic law on the basis of information supplied. Information used in the foreign non-conviction based proceedings can be used to ground Irish proceedings under the Proceeds of Crime Act.
3.3.2.15. Italy IT National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Civil No
A civil seizure or confiscation is theoretically possible in line with Italian legislation.
3.3.2.16. Lithuania LT National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes : No legal framework
There are no instrument which would regulate the mutual recognition of non-conviction based confiscation order issued by another Member State whose system applies the civil forfeiture procedures. There is no case law on this either.
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3.3.2.17. Luxembourg LU National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes : No legal framework
A foreign decision must be either based on a conviction (“décision de condamnation”) or on a judicial decision of criminal nature (“décision judiciaire de caractère pénal”)308. As a result confiscation resulting from civil proceedings (in rem proceedings) or criminal proceedings not based on a conviction cannot be enforced.
3.3.2.18. Latvia LV National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes if clear link to offence and for property
It would be possible to enforce a civil non-conviction-based confiscation order issued by another Member State but only in cases where there is a clear link to the offence.
A confiscation of property to be executed in Latvia shall be determined if property would be confiscated in criminal proceedings taking place in Latvia309.
3.3.2.19. Malta MT National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another
308 Art. 662 2) a) CIC
309 CPL
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Member State NA Yes : No legal framework
Since it is not possible under Maltese law to issue non-conviction based confiscation orders, this deficiency also extends to foreign issued non-conviction based confiscation orders.
Subsidiary Legislation number 9.15, entitled Confiscation Orders (Execution in the European Union) Regulations, implementing Directive 2006/783, which deals with the execution of confiscation orders within the EU, limits the scope of execution to those orders issued by a court of criminal jurisdiction. The law in article 4(b) states that ‘for the purposes of these regulations, a court of criminal jurisdiction shall be competent to issue confiscation orders’.
Therefore, it follows that civil non-conviction-based confiscation orders cannot be recognised and executed by Malta’s authorities.
3.3.2.20. The Netherlands NL National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State NA Yes
According to Dutch law on Recognition of Foreign Confiscation orders it is possible to seize assets on request of a foreign country in a civil non-conviction based confiscation.
According to the same law it is possible to that the seized assets are transferred to the requesting State for the procedure. After the procedure has ended the assets need to be returned to the Netherlands or an amount of the proceeds need to be paid.
There are no other possibilities for enforcement of a civil non-conviction based confiscation.
3.3.2.21. Poland PL National mechanism Obstacle to the enforcement of a
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Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes : No legal framework
Polish confiscation regime is based on Criminal Code provisions.
It follows that the recognition and execution of civil non-conviction-based confiscation orders is not possible under the Polish law.
3.3.2.22. Portugal PT National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes : No legal framework
Concerning provisional measures, for example, the simple identification of goods, there seems to be no obstacle to cooperation.
However, there may be an issue with definitive measures (confiscation) because, in Portugal, they can only be taken in the context of a criminal case. The same applies with respect to the procedural guarantees of confiscation. Portugal has struggled with some difficulties when requests to recognize and execute decisions based on civil recovery have been issued.
3.3.2.23. Romania
RO National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes : No clear legal framework
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The law not impede expressis verbis the enforcement of the so called non-conviction based confiscation orders, issued abroad310.
There might be constitutional issues by reference to the protection of fundamental rights and the right to property.
However, there is no known case law. Obstacles may arise and their existence would depend on the competent judicial authority deciding on the enforcement. According to the information received by the Romanian judicial authorities no requests on recognition or execution of a civil non-conviction-based confiscation order have been received until now.
3.3.2.24. Sweden SE National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes
It is not possible under Swedish law to recognise and execute civil non-conviction-based confiscation orders.
3.3.2.25. Slovakia SK National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes - No legal framework
There is a serious obstacle for such a request – lack of legal base for such an action.
No such request has been addressed to the Slovak Republic at this date.
310 Currently, the Law n° 302/2004 does
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3.3.2.26. Slovenia SI National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes - No legal framework
Slovenia would apply the principle for the recognition of civil judgements from other countries.
No such request has been made up to now making it difficult to predict the outcome.
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3.3.2.27. The United Kingdom UK National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Civil No
There are no obstacles.
Other Member States’ non-conviction based confiscation orders can be enforced under the Proceeds of Crime Act311.
No such request has been made up to now making it difficult to predict the outcome.
3.3.2.28. Croatia HR National mechanism Obstacle to the enforcement of a Criminal / Civil civil non-conviction-based confiscation order issued by another Member State Criminal Yes
According to the article 27 of the Law on Confiscation of Proceeds of Crime and Offense, the decisions of foreign bodies related to the confiscation of the property of the defendant or other person connected to the criminal offense, are recognised and executed on Croatian territory in accordance with international agreements. If there is no international agreement, the decision of the foreign body will be recognized: if it would not be contrary to the public policy of the Croatia, if the person concerned has had the possibility to participate in the proceeding ; if there is reciprocity.
311 Part 5 of The Proceeds of Crime Act 20022002 (External Requests and Orders) Order 2005. see paragraphs 599 and 600 of the Explanatory Notes to the Proceeds of Crime Act 2002.
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There is no special mention concerning the non-conviction-based confiscation.
Summary
Almost all Member States see important obstacles to the enforcement of civil non- conviction based confiscations. Even some Member States such as Ireland who have in rem confiscation systems would see an obstacle to mutual recognition.
The main arguments put forward by Member States is the lack of guarantees that civil procedures offer in terms of: The presumption of innocence, Standard of proof, Burden of proof, Rights to property, and Access to legal aid.
In some Member States: confiscation of real property312, confiscation without a clear link to an offense, confiscation outside criminal proceedings, and confiscation without conviction would not be recognized.
The basis for the refusal to recognize would be: The lack of double incrimination Public order Public interest Fundamental rights The civil character of the judgement
However, all these viewpoints are mostly hypothetical since virtually no requests have even been made.
312 See Romanian Report
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Some Member States stated that if the decision is civil based, the recognition would be that which applies to the recognition of civil judgments and would not be automatic in the case of confiscations.
The proposed Directive, by harmonising substantial law, would facilitate the recognition on criminal non-conviction based orders, but not civil NCB ones.
3.3.3. Obstacles to the enforcement of criminal non-conviction-based confiscation orders issued by another Member State
Answers to the question as to whether the receiving Member State would find obstacles in their national legislation to the enforcement of such an order. A little less than half of the Member States answered in the negative.
MS Type of NCB Would enforce Criminal NCB AT Criminal No BE NA Yes BG Civil No CY Criminal No CZ Criminal No
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DE Criminal No DK NA Yes EE NA Yes EL Criminal No ES NA Yes FI Criminal No FR Criminal Yes HR Criminal Yes HU Criminal Yes IE Civil Yes IT Administative No LT Criminal Yes LU Criminal No LV Criminal No MT NA No NL NA Yes PL Criminal Yes PT Criminal Yes RO Criminal Yes SE Criminal Yes SI Civil No SK Criminal Yes UK Civil No
3.3.4. Situation by Member State on the enforcement of criminal non-conviction- based confiscation orders issued by another Member State
3.3.4.1. Austria AT National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal No
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The recognition and execution of criminal non-conviction-based confiscation order is possible in Austria.
3.3.4.2. Belgium BE National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State NA Yes : No legal framework
The execution of non-conviction-based confiscation orders is legally not possible, because the confiscation can be ordered only on the bases of a criminal conviction imposed by a judge in criminal proceeding313.
3.3.4.3. Bulgaria BG National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Civil No
There are no obstacles. Criminal non-conviction-based orders can be recognised and executed in Bulgaria.
3.3.4.4. Cyprus
CY National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal No
313 Article 4 of the Law of 20 May 1997 on International Cooperation on the Execution of Seizure and Confiscation.
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It seems that there would be no obstacle to the enforcement of a criminal non- conviction based confiscation order issued by another Member State314.
3.3.4.5. The Czech Republic CZ National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal No
It is possible to recognise another Member State’s decision on a criminal non-conviction- based confiscation order315.
The “European” confiscation order could be also used in such a case since the decision on forfeiture is issued in criminal proceedings concerning a particular criminal matter and Art 2(c) of the FD 2006/783/JHA refers not only to a final penalty but also to a final measure imposed by a court.
3.3.4.6. Germany DE National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal No
No obstacles
3.3.4.7. Denmark DK National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order
314 Provided that the conditions set out in Sections 32 and 33 (regarding the respect of interested persons) of the AML law are satisfied.
315 Sec 449(f) of the CPC A foreign decision shall be considered, for the purposes of this Title, a decision issued by a court of another State for a criminal offence punishable according to the legal order of the Czech Republic, by which f) forfeiture of property or a portion thereof was declared or forfeiture of an item or its seizure was declared (hereinafter referred to as “foreign decision on property”).
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issued by another Member State NA Yes : No mutual legal assistance
Denmark has no experience on international co-operation regarding civil and criminal non-conviction-based confiscation orders.
3.3.4.8. Estonia
EE National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State NA Yes : Constitution
Since Estonia does not have a system of a non-conviction based confiscation, there may be obstacles to enforce the NCB confiscation orders issued by other Member States.
International cooperation (including recognition and enforcement of the judgements made by foreign courts) is not permitted where there´s a conflict with general principles of Estonian law316. According to Estonian general principles, including the ones enshrined in the Constitution, a confiscation which is considered a penalty may only be imposed pursuant to final conviction by the court. As stated below, the confiscation is considered to be a measure of punitive nature and therefore requires a criminal conviction to be applied.
Therefore, it follows that the enforcement of a NCB confiscation order will be in conflict with the general principles of Estonian law and therefore the enforcement of a non-conviction-based confiscation orders will be rejected on this basis.
However, Estonia is contemplating revising its position on this.
3.3.4.9. Greece EL
316 Art 436 para 1 (2) of the CCP.
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National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal No
The probability of an obstacle arising in such a case is very limited, given the relatively wide criminal non-conviction-based confiscation possibilities provided for in Greek legislation.
Again, the practical experience in such matters is close to non-existent.
3.3.4.10. Spain ES National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State NA Yes
There are difficulties in cooperating with States where NCB Confiscation is possible. Non-conviction based confiscation is possible in Spain under very strict conditions and these should be met if a request were made by another Member State.
3.3.4.11. Finland
FI National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State NA No
Finland has implemented obligations set in FD 2006/783/JHA, which obliges Member States to recognise and execute confiscation orders which have been issued by a competent Court in criminal matters and following proceedings in relation to a criminal offence. Therefore, it follows that there is no obstacle to the recognition and execution of criminal non-conviction-based confiscation order issued by another Member State.
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3.3.4.12. France FR National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal Yes – possible obstacles
The only one case law existing until now: the "Crisafulli" case (Crim. 13 November2003 - appeal n°03-80371) concerned the execution in France of a preventive confiscation order issued by the Italian judicial authorities regarding a real property located in Antibes and strongly suspected to be the product of money laundering provided by drug trafficking, does not allow to have a clear and final answer on this question.
In this case, the Court ruled that the conditions for executing the Italian order are fulfilled if:
The confiscation order issued by the foreign authorities is final and enforceable; The asset subject to confiscation may be confiscated in similar circumstances under French law (article 131-21 and 324-7 CP); and The execution of the order does not interfere with the French law and order, as the asset has been acquired by laundering of money coming from drug trafficking.317
But there are issues concerning this decision in that articles 131-21 and 324-7 as mentioned by the Court do not permit confiscation a before conviction as they refer to complementary sentences.
Therefore, it is not possible to affirm with certainty that the non-conviction-based confiscation orders will be recognised and executed in France without difficulty.
3.3.4.13. Hungary HU
317 See the extract of the Court decision in the French languague : « Attendu que, pour faire droit à cette demande, les juges du fond constatent que les conditions prévues pour cette exécution par la loi du 13 mai 1996, notamment en ses articles 12 à 14, sont réunies ; qu’ils relèvent ainsi que la décision de confiscation est définitive et exécutoire et que le bien confisqué est susceptible de l’être dans des circonstances analogues selon la loi française, en ses articles 131-21 et 324-7 du Code pénal ; qu’ils ajoutent enfin que l’exécution de la décision précitée ne peut porter atteinte à l’ordre public dès lors que la requête tend à la confiscation d’un immeuble acquis par le blanchiment de sommes issues d’une organisation criminelle ».
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National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal Yes (under condition same legal requirements are met)
Since non-conviction based confiscation orders can be issued in criminal proceedings in Hungary, a criminal non-conviction based confiscation order issued in another Member State will be enforced provided however that it is issued respecting the same legal requirements that apply for national non-conviction based orders. Thus if the non- conviction based confiscation order is issued pursuant to substantially different conditions in another Member State, the execution in Hungary may cause problems.
3.3.4.14. Ireland IE National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Civil Yes: No mutual legal assistance
Ireland cannot afford mutual legal assistance in relation to requests received arising from non-conviction based orders. However, it may be possible to take action using domestic law on the basis of information supplied. Information used in the foreign non- conviction based proceedings can be used to ground Irish proceedings under the Proceeds of Crime Act.
3.3.4.15. Italy IT National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Civil (Administrative) No
3.3.4.16. Lithuania LT National mechanism Obstacle to the enforcement of a criminal
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Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal Yes (recognition needed before enforcement)
In Lithuanian’s legal order the provisions of the European Convention on the International Validity of Criminal Judgments (The Hague, 28 May 1970) could be applied in order to recognise the non-conviction based orders issued by another Convention Party Member State whose legal system requires the link to a criminal proceedings.
Also, in January 2013, new provisions of CCP entered into force which implement the Framework decision n°2006/783/JHA. Article 365-3 deals with the recognition of Member’s State decision to confiscate in Lithuania and article 365-4 deals with the execution of such a recognised decision.
3.3.4.17. Luxembourg LU National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State NA No : if the measure is a judicial decision of a criminal nature
Art. 662 2) a) CIC states that a foreign decision must be either based on a conviction (“décision de condamnation”) or on a judicial decision of a criminal nature (“décision judiciaire de caractère pénal”).
3.3.4.18. Latvia LV National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal No
It would be possible to enforce a non-conviction-based confiscation order issued by another Member State in the course of criminal proceedings.
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3.3.4.19. Malta MT National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal No
Since it is not possible under Maltese law to issue non-conviction based confiscation orders, this deficiency also extends to foreign issued non-conviction based confiscation orders.
Subsidiary Legislation number 9.15, entitled Confiscation Orders (Execution in the European Union) Regulations, implementing Directive 2006/783, which deals with the execution of confiscation orders within the EU, limits the scope of execution to those orders issued by a court of criminal jurisdiction. The law in article 4(b) states that ‘for the purposes of these regulations, a court of criminal jurisdiction shall be competent to issue confiscation orders’.
Therefore, it follows that criminal non-conviction-based confiscation orders can be enforced by Malta’s authorities.
3.3.4.20. The Netherlands NL National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State NA Yes
The Dutch law does not have a provision for the enforcement of foreign criminal non- conviction based confiscation orders.
3.3.4.21. Poland PL National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal Yes : No legal framework
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A confiscation order is recognized in Poland if it was issued against a perpetrator of a crime318. Therefore strict interpretation leads to the conclusion, that it is not possible to recognize confiscation orders issued in relations to persons who were not declared as a perpetrator (found guilty) of a crime (the proceedings against them were discontinued because of death, passage of time, insanity, etc.
3.3.4.22. Portugal PT National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal Yes : No legal framework
According to article 13 of Law nr 88/2009, a Portuguese court can refuse to recognise and execute a confiscation order when: The rights of any party, including bona fide third parties, under Portuguese law, makes it impossible to execute the confiscation order and; Under the terms of the certificate, the person concerned was not present at the trial that gave rise to the confiscation order, with the exception of cases in which the certificate should attest that this person, in accordance with the law of the issuing State:
i) Was personally notified of the date and place of the trial or has actually received by other means to conclude unequivocally that he/she had knowledge of the trial, official information of the date and place of trial, having been informed that the confiscation order could be delivered in his/her absence; ii) Had knowledge of the judgment referred to in a timely manner, mandated a legal representative chosen by him or by the Member State in accordance with national legislation and was actually represented at the trial; or iii) Was timely notified of the confiscation order and expressly informed of the right to a retrial or appeal that permits review of the merits of the case, including new evidences, and stated expressly that he/she does not contest the confiscation order or decided not to appeal;
These facts can be obstacles to the enforcement of a criminal non-conviction-based confiscation order issued by another Member State.
318 Under the provisions of the CCP (art. 611fu)
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The Portuguese court can also refuse to recognise and execute the confiscation order when: a) the confiscation order concerns facts which do not constitute a criminal offence attaching confiscation, in accordance with Portuguese law; b) The decision concerns offences: i) committed in whole or in part, in Portuguese territory or in a place treated as such by Portuguese law; ii) committed outside the territory of the issuing State, provided that the Portuguese law does not apply to the same offences when committed outside national territory; or c) The time limits of prosecution or punishment have elapsed, in accordance with Portuguese law.
3.3.4.23. Romania RO National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal Yes : No legal framework
Currently, Law n° 302/2004 does not impede expressis verbis the enforcement of the so called non-conviction based confiscation orders, which have been issues abroad. However, there may be some constitutional issues with a confiscation not based on a conviction.
According to the information received by the Romanian judicial authorities no requests on recognition or execution of a criminal non-conviction-based confiscation order have been received as of this date.
3.3.4.24. Sweden SE National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal Yes
It is not possible under Swedish law to recognise and execute criminal non-conviction- based confiscation orders.
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3.3.4.25. Slovenia SI National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Civil No
3.3.4.26. Slovakia SK National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal Yes – Recognition is possible but not direct enforcement
In general, if a confiscation order was issued by the judicial authority and is based on a criminal procedure, there should be no obstacle for its enforcement. The procedure of its recognition and execution depends on the legal base – whether there is e.g. bilateral or multilateral treaty or not, etc. A general principle and procedure for recognition of foreign decision is regulated by the Criminal Procedure Code.
As any other order/judicial decision, the confiscation order must be recognised by appropriate judicial body – the Regional court on the proposal of a Ministry of Justice with the written opinion of a prosecutor. The Regional Court in whose districts the sentenced person has his residence, or in whose territory the property or the thing to which the foreign decision relates is located, shall have jurisdiction to proceed on such proposal.
The recognised foreign decision shall have the same legal effects as a judgement of a Slovak court.
3.3.4.27. The United Kingdom UK National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Civil No
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There are no obstacles.
3.3.4.28. Croatia HR National mechanism Obstacle to the enforcement of a criminal Criminal / Civil non-conviction-based confiscation order issued by another Member State Criminal Yes – Under certain conditions only
According to the article 27 of the Law on Confiscation of Proceeds of Crime and Offense, the decisions of foreign bodies related to the confiscation of the property of the defendant or other person connected to the criminal offense, are recognised and executed on Croatian territory in accordance with international agreements. If there is no international agreement, the decision of the foreign body will be recognized: if not contrary to the public policy of the Croatia, if the person concerned has had the possibility to participate in the proceeding ; if there is reciprocity.
There is no special mention concerning the non-conviction-based confiscation.
Summary
Only a small majority of Member States see some obstacles to the enforcement of criminal non-conviction based confiscations.
The basis for the refusal to enforce would be: The lack of double incrimination Public order Public interest Fundamental rights
However, all these viewpoints are for the most hypothetical since virtually no requests have even been made.
The proposed Directive, by harmonising substantial law, would facilitate the
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recognition on criminal non-conviction based orders. In particular it should resolve the fundamental rights issue, given that the Directive integrates in Article 8 the fundamental rights as affirmed in the Charter.
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4. CHAPTER 4: Remedies and procedural safeguards
The difficulty with confiscation is that it is truly a hybrid tool aimed at fighting against organized crime and can be used in varying settings. First, confiscation exists in civil, criminal and administrative proceedings in many countries. Second, it can be used as a tool to gather evidence, as a means to claw back on illegally obtained assets or as a penalty. Finally, it can concern existing assets or can be defined as an amount unrelated to specific assets but related to the benefit obtained from a criminal activity and can as a result be converted into a prison sentence where the individual target of the confiscation is unable to pay.
Hence depending on how confiscation is used and in which setting it operates, different fundamental rights may apply. Moreover, the applicable fundamental rights may not be the same as those that apply for the freezing of assets. For example, if it is clear that the freezing of assets is not a deprivation of property within the meaning of the first paragraph of Article 1 Protocol 1 of the Convention, it is also clear that confiscation is. The complexity is enhanced again when confiscation extends to third party assets. What are their rights and how and before which jurisdiction can they be protected?
Where mutual recognition is added to the mix the difficulties are multiplied. Enforcing Member States may not know the type of confiscation that is been implemented. They may believe that what they are enforcing is a penalty and that some fundamental rights have not been respected and should be so at least in their national setting. Does enforcing a foreign decision absolve them of the respect of fundamental rights? Should they enforce blindly a forfeiture order even where no final decision has been made in the issuing Country and all appeals have not been exhausted?
These are but some of the questions that occur in one of the most complex areas of modern civil/criminal/administrative law. There have been many ECHR cases involving confiscation and the jurisprudence is evolving as the nuances are better taken into consideration. Many Member States have recently enacted enhanced confiscation tools and the Courts are struggling on how to properly balance on the one hand the legitimate fight against criminal activities and on the other the protection of fundamental rights. Particular attention needs to be given to fundamental rights in this area as those enhanced confiscation tools can include the deprivation of property, prison terms, the reversal of the burden of proof, the non-applicability of the presumption of innocence and retrials post acquittal.
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The Study’s focus being the comparative study of mutual recognition in the Member States, the problem also relates to whether the harmonization proposed in the Draft Directive – or the Council General Approach – will not result in limiting fundamental rights and remedies or violating rights recognized by the ECHR or the Charter.
Of particular interest is if Member States’ restrictions based on international public order and principles can be maintained if the Draft Directive is adopted. It appears in particular that a number of Constitutional obstacles remain such as in Estonia.
Further, it seems that the protection of third parties against abusive or illegal freezings and confiscations should be carefully reviewed as mutual recognition raises issues of jurisdiction and applicable law. These could be resolved by reference to civil law principles and especially through the affirmation of the lex situs319.
Apart from jurisdictional issues a regular noted obstacle to the mutual recognition of freezing and confiscation orders pertains to the reversal of the presumption of innocence and the reversal of the burden of proof.
Some countries affirm that any measure that is of a coercive nature, involves forms of prosecution by the State or the exercise of State powers over individuals should afford the highest levels of protection regardless of the type of proceedings chosen by the State. As reported by local legal professionals following interviews with national authorities, decisions emanating from Member States where laws were adopted enabling prosecutions in a civil or administrative context rather than a criminal one may not be enforced by other Member States.
Mutual recognition requires a higher level of trust than mutual assistance. As a result, the affirmation of mutual recognition must be accompanied by tools that increase trust. Such tools lie in the degree of procedural information communicated by the issuing Member State. Two options can ensure that the information is provided. The first one consists in imposing on each Member States to describe precisely the procedures used to implement the Draft Directive and the guarantees afforded to the affected parties. The second option, if the first one is not practical, would involve the issuing Member State making a
319 Defined in P.Osborn’s A concise Law Dictionary (London: Sweet & Maxwell, 1954) as a “conflict of law rule that selects the applicable law based on the venue or location of something”.
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declaration at the time of the request that its procedures respect fundamental rights and the rights and remedies that protect affected parties in the Draft Directive.
4.1. Procedural safeguards
4.1.1. Procedural safeguards in national cases
4.1.1.1. The right to be involved in the process leading to a decision and to be advised of the reasons for the freezing and confiscation of their assets
4.1.1.1.1 Austria Usually decisions are taken ex parte, nevertheless if circumstances of a former decision change, decisions might be taken ex officio, as well.
Every decision of a court or an order of the public prosecutor has to be notified to all persons concerned.
The Austrian Criminal laws do not provide specific procedural safeguards for proceedings on confiscation, forfeiture, extended forfeiture and recovery. However, as these are seen as penalties, the same procedural safeguards have to be applied as guaranteed for other criminal proceedings.
The Austrian Code on Criminal Procedure guarantees a number of principles for criminal proceedings. The most important ones are as follows:
- Right to be heard : An accused person has the right to be involved in all states of the proceedings (Section 6 para 1 ACCP).
Every concerned party has the right to be involved [if it is reasonable] and to be informed (Section 6 para 2 ACCP)
- Right of defence : An accused person has the right defend himself in person or through legal assistance (Section 7 para 1 ACCP)
An accused person cannot be forced to incriminate himself (Section 7 para 2 ACCP)
- In dubio pro reo (Section 8 ACCP) - Right for a court decision within a reasonable time (Section 9 para 1 ACCP)
- Right for a fair and public hearing:
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The court may only include facts, which have been mentioned in the public hearing (Section 12 para 2 and Section 13 ACCP)
- Free consideration of evidence (Section 14 ACCP)
- Ne bis in idem (Section 17 para 1 ACCP).
4.1.1.1.2 Belgium Decisions are taken ex parte in the freezing phase. Decisions are not taken ex parte in the confiscation phase.
In the freezing phase, notification is provided to the owner of the assets. In the confiscation phase, the defendant may present his/her arguments in Court before any decision on confiscation is made.
4.1.1.1.3 Bulgaria Decisions can be taken ex parte in the freezing phase. Decisions are not taken ex parte in the confiscation phase.
4.1.1.1.4 Cyprus Freezing orders are obtained ex parte and are limited in duration. The affected person must be notified promptly and afforded the right to object. If the freezing order is confirmed after the hearing with the affected person, it becomes final until the trial.
According to the AML, persons affected by freezing or confiscation orders have the right to appear before the court and file objections to the orders.
4.1.1.1.5 The Czech Republic Both the accused (sentenced) person and the participants can see the files and lodge complaint or appeals against decision of a prosecutor or a court. A lawyer can represent both.
Under Sec 42 of CPC, the person whose thing or other asset value was forfeited or is due to be forfeited according to a proposal (party concerned) and must be given an opportunity to comment on the matter; the party concerned may be present at the trial and public session, make proposals, inspect documents, and submit appeals where admissible.
The authorities involved in criminal proceedings are obliged to instruct the party concerned of their rights and provide them with the full opportunity to exercise them.
If the court decides on forfeiture by a judgement in a trial, the party concerned can appeal the decision on forfeiture.
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If the court decides on forfeiture in special proceedings under Sec 239 and 239a, the party concerned can lodge a complaint against such decision.
All decisions on seizure and confiscation have to be justified - any decision has to contain not only description of facts, what crime it is, identify the suspect (if he/she is known) but also a reasoning on the decision about seizure or confiscation. The reasoning has to be supported by facts gathered during the investigation.
The decision on the freezing of assets is taken ex parte, enforced and then notified to the affected person. The affected person can lodge and appeal against the decision.
Since the Czech Republic applies forfeiture only in criminal proceedings (with the criminal standard and burden of proof), the presumption of innocence has to be respected.
4.1.1.1.6 Denmark Freezing orders are taken ex parte and then notified to the affected person.
The Danish courts are the authority competent to decide on the confiscation. The persons have the right to appear personally in the proceedings.
All decisions must be motivated and the right to contest them effective. This constitutes a fundamental principle of Danish public law.
In the case of extended confiscation (extending beyond the proceeds related to the specific crime for which there is a conviction), the suspected or accused person has an effective possibility to contest the probability on the basis of which the property concerned is considered to be proceeds and it is covered by the general right of appeal in the Criminal Code, to the extent that such extended confiscation is possible.
4.1.1.1.7 Estonia Decisions are taken ex parte pursuant to § 269 of the Code of Criminal Procedure. As an exception, a criminal matter may be heard in the absence of the accused.
A ruling on the seizure of property shall be immediately notified to the affected person.
If property is seized in the courses of performance of a procedural act, the representative of the local government shall be involved in the absence of the responsible person or representative.
Copy of a confiscation ruling shall be submitted to the convicted offender and any affected the third party. Upon adjudication of a confiscation request a copy of the ruling is sent to the participant in the proceedings who did not participate in the in the court hearing.
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If all the assets of someone have been frozen and they cannot buy food for themself or their family or even hire a lawyer, legal aid is provided by state.
Pursuant to § 508 of the Code of Criminal Procedure, a European freezing order issued to Estonia and the ruling of the competent judicial authority of the requesting state, which is the basis for the freezing order, cannot be contested in Estonia. If a person so requests, the Public Prosecutor's Office shall provide contact details, which allows the person to examine the procedure for contesting a European freezing order in the requesting state.
The persons affected by the measures have the right to an effective remedy and suspects have the right to a fair trial, in order to preserve their rights. The reasons are also given for any decision to confiscate and the decision is communicated to the person concerned. This is covered with provisions in the Code of Criminal Procedure which imposes notification of affected persons and gives them a right to contest rulings.
According to the Code of Criminal Procedure (§ 4037) the prosecutor, the accused or the convicted offender, his or her counsel and third party shall be summoned to a court hearing. The failure of a third party to appear in a court session shall hinder neither the court hearing nor the hearing on the confiscation request.
A confiscation order can be contested through an appeal and thereafter a cassation appeal.
4.1.1.1.8 Finland Decisions are not taken ex parte.
The Constitution of Finland (731/1999) contains a provision on the right to a fair trial (Section 21). The constitution, thus, guarantees that a fair trial is a right guaranteed for everyone. Fairness of a trial extends beyond court proceedings and covers the proceedings as a whole, including the fairness of the pre-trial investigations. Coercive measures and confiscation orders and the processes in which these are ordered are without doubt covered by the provision on fair trial.
The obligation to give reasons and to inform about the access to appeals constitutes a fundamental principle guaranteed by the Finnish constitution.
In relation to freezing of assets, according to the Coercive Measures Act (Chapter 3) sequestration and restraint on alienation are always ordered by a decisions made by a court.
This means that the persons concerned are immediately notified of the decision made by the court. Confiscation is also always ordered by a court, which also means that the persons concerned are practically immediately notified.
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The Court can summon the suspect/accused/the owner of property to the court proceedings where it decides on the request of the prosecutor to issue a freezing order. This is not mandatory and rarely used.
Notification of seizure:
Where the person in whose premises an object is seized or taken into possession is not present, he shall without delay be notified of the measure. If the address of the recipient or the sender of a postal shipment, a shipment of goods or a telegram is known, he shall be notified of the seizure as soon as this can no longer compromise the clearing up of the offence.
The deadline date for lodging of the appeal (to the court of appeal) is thirty days from the day when the decision of the District Court was handed down or made available to the parties. At the district court a judgment and a final order shall be issued within 30 days of the conclusions of the main hearing. Often the judgment is also issued immediately after the main hearing. In some complicated cases, if there are special reasons on the grounds of which the decision cannot be issued within the mentioned 30 days, it shall be issued as soon as possible.
4.1.1.1.9 France Regarding a confiscation order, the convicted person is informed by the usual means used during a criminal procedure (e.g. if the person attends the hearing, she will be informed when the decision is delivered). However, if the owner is not the convicted person, no specifics rules are laid down.
During all the stages of the procedure, a magistrate intervenes to ensure the respect of the rules and to protect the rights of every concerned person.
When the magistrate authorizes the seizure, its decision is notified to the public prosecutor, the owner of the confiscated asset and third parties who have rights over the asset in order for them to be able to contest the decision. In practice, depending on the procedure used, the persons affected by the seizure of an asset usually become aware of that fact either by being present at the time of the search during which the seizure is carried out or, in the case of the seizure of sums held in a bank account, as a result of the funds becoming unavailable.
4.1.1.1.10 Germany In general, German law allows for measures to be taken without a prior hearing in urgent cases or where this would put the measure at risk. In all other cases, notification/hearings take place.
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According to section 111 e (3) of the Code of Criminal Procedure the public prosecution office shall inform the person who is affected by the decision without delay, insofar as his identity is known or becomes known during the course of the proceedings. If the public prosecutor’s office has ordered seizure in exigent circumstances (section 111 e (1) Code of Criminal Procedure) it has to apply for court confirmation within one week (section 111 e (2) Code of Criminal Procedure).
According to section 111 e (2) of the Code of Criminal Procedure the person concerned by the order of seizure or attachment may apply for a court decision at any time.
In respect of measures taken in the course of enforcing the seizure or attachment the person concerned may also apply for a decision of the court at any time (section 111f (5) of the Code of Criminal Procedure). The success of the remedy cannot be considered in general. It depends on a case-by-case review and will take a few days or weeks, dependent on the volume and the complexity of the case. Statistical data are not available.
Before a provisional order is made the person concerned need not to be heard. The order is notified to the person concerned by execution of confiscation in exceptional circumstances. A specific declaration is not necessary. But the person concerned shall be instructed to his or hers rights in accordance with section 98 (2) 7TH sentence of the Code of Criminal Procedure.
If a provisional confiscation measure is ordered the person concerned has to be informed about the order before its execution. The person can lodge a complaint in accordance with section 304 of the Code of Criminal Procedure.
When the final judgment is given the convicted person cannot appeal the confiscation order alone but the judgement as a whole.
If a foreign confiscation order is to be executed the country court decides on its enforceability. According to section 55 AICCM the convicted person amongst others may appeal the order within one week.
If a freezing or confiscation order was wrongful and the order has caused damage to the person concerned such person may be compensated in accordance with the Law on Compensation for Wrongful Prosecution (“Gesetz über die Entschädigung für Strafverfolgungsmaßnahmen”).
According to section 111 e (2) of the Code of Criminal Procedure the public prosecution office shall apply for court confirmation within one week, if it has ordered seizure or attachment. The application has to be made to the court, which is competent for the decision. It is not necessary, when the seizure of a moveable asset has been ordered. In all cases the person concerned may apply for a court decision at any time.
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If there are no reasons to maintain it, the court will revoke the order of seizure or attachment in rem after a maximum period of six months. Where certain facts substantiate the suspicion of the offence and the time limit referred to in the first sentence is not sufficient given the particular difficulty or particular extent of the investigations or for another important reason, the court may, upon application by the public prosecutor’s office, extend the measure provided the grounds referred to justify that it be maintained. Unless grounds exist to justify maintaining the measure longer, the measure shall be revoked after a period of twelve months (section 111 b (3) of the Code of Criminal Procedure).
Third parties affected by the confiscation orders, should be notified about and participate in the proceedings in accordance with sections 431 et.sec. of the Code of Criminal Procedure. The affected persons can appeal the court decision under the provisions outlined in section 439 of the Code of Criminal procedure.
4.1.1.1.11 Greece Decisions are not taken ex parte regarding confiscation orders.
Decisions are taken ex parte regarding freezing orders.
The freezing order is served to the affected person. The confiscation order is pronounced publicly at the court hearing, and is served to the affected person if he/she is absent.
With respect to the freezing order, the person has a right to demand the revocation of the investigating judges or judicial council’s order, by an application addressed to the competent judicial council and filed with the investigating judge or the public prosecutor within the 20 days from service of the order (Art. 48 §4 Law 3691/2008).
With respect to the confiscation order, the affected persons have the right to appeal the relevant part of the court judgment, on points of fact and law, in accordance with Arts 310(2), 373, 492 and 504(3) of the Code of Criminal Procedure.
4.1.1.1.12 Hungary According to Article 43 (2)-(3) of the Criminal Procedure Act:
The defendant is entitled to: a) Receive information on the suspicion, on the charge and any changes therein; b) – Unless provided otherwise by this Act – be present for procedural actions and inspections of the documents affecting him/her; c) Be granted sufficient time and opportunity for preparing his/her defence;
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d) Present facts to his/her defence at any stage of the proceedings, and to make motions and comments; e) File for legal remedy; f) Receive information from the court, the prosecutor and the investigating authority concerning his/her right and obligations during the criminal proceedings.
The defendant in custody is entitled to: a) Contact his/her defence counsel, and in case of foreign citizens, the representative of the consulate of his/her country and communicate with them both in writing and verbally without control; b) Communicate with his/her relative or with any other person (based on the decision of the prosecutor or the court) verbally personally under supervision, and in writing under control. Communication with the relative shall only be restricted or prohibited in the interest of the criminal proceedings.
According to Article 7 of the Criminal Procedure Act, no one can be considered guilty until his/her culpability is established in a final court decision.
If the Hungarian competent authorities enforce a (criminal) non-conviction based confiscation order issued by another Member State, for the enforcement, Hungarian national law shall be applied, and thus during the criminal proceedings the principle of presumption of innocence shall also be taken into consideration.
According to Article 55 (1)-(2) of the Criminal Procedure Act:
Anyone whose right or lawful interest may be directly affected by the decision made in the course of criminal proceedings may make motions and comments in connection with the related issues affecting him/her, may submit an appeal against the provision of the decision concerning him/her and may attend the trial;
In proceedings involving a criminal act subject to confiscation or confiscation of assets, the rights of the victim shall apply [Article 51 (2)] to the rights of other interested parties whose object may be confiscated as well as to the rights of the owners of the assets, which may be ordered to be confiscated.
According to Paragraphs (1)-(4) and (6) of Article 262 of the Criminal Procedure Act:
(1) The decision shall be communicated to those whom it concerns; the decision communicated to the accused shall also be communicated to the defence counsel, and the conclusive decision to the victim as well;
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(2) The decision shall be communicated verbally to the persons present, a notification shall be sent;
(3) During the announcement of the decision, the operative part shall be read out, the substance of the justification shall be made known and explained if required;
(4) The extract of the conclusive decision containing the justification as well shall be delivered to the prosecutor, the accused, the defence counsel, the substitute private accuser and the victim even if they have been notified either by way of an announcement or delivery of the operative part of the decision; in other cases, the extract of the decision containing the justification as well shall be delivered – if the decision was appealed by a party other than those listed above – to the appealing party;
(6) If the accused does not understand the Hungarian language, after the announcement, the part of the judgment and the decisive ruling pertaining to such accused shall be translated into the native, regional or minority language of the accused, or at his/her request, into another language defined by the accused as a language spoken and formerly used in the proceedings, then the decision shall be delivered to the accused.
4.1.1.1.13 Ireland Anybody affected by a freezing order has the right to contest it under section 24 of the Criminal Justice Act 1994. Spouses may be able to reclaim any property jointly held by the Defendants with them. Only Defendants have an automatic right of audience in confiscation hearings. They have a right to make representations in relation to any information furnished to the Court by the Prosecution, and they have a right of appeal to the Court of Criminal Appeal if a confiscation order is granted. The Court can find for the defendants on the balance of probabilities in relation to any freezing or confiscation application. The High Court may vary or discharge an order.
Applications for freezing orders are made ex parte. Notification of freezing orders granted must be made to the parties affected by them who have a right to seek their variation or discharge. Confiscation enquiries are conducted post sentence, and on full notice to the Defendants
The Central Authority is not a party to seeking an order and cannot respond.
Instructions as the notification of parties affected by freezing orders can be obtained from the High Court, which will take cognisance of the need to prevent the dissipation of assets. In confiscation enquiries the defendants are normally notified of the Prosecutions confiscation case in relation to assets post sentencing, and have a right to challenge such applications.
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The Central Authority has no function in informing parties affected by an order. Generally speaking, under mutual assistance law, obligations rest on the executing state in relation to procedural rights arising from action taken on foot of a request for assistance.
If your Member State either harbours a mechanism of non-conviction-based confiscation order or without harbouring one would allow for the enforcement of orders issued in other Member State, how would this be reconciled with the presumption of innocence?
The Supreme Court has held that the proceedings under the Proceeds of Crime Act are proceedings in rem and accordingly the question regarding presumption of innocence does not arise.
4.1.1.1.14 Italy Freezing orders are taken ex parte.
During the investigation the order of seizure is communicated to the person concerned. The order includes the reasons for the decision and the procedures for appeal to it.
4.1.1.1.15 Latvia
Under Section 628 of the Criminal Procedure code the person directing the proceedings shall immediately send a copy of the decision to Initiate Proceedings regarding Criminally Acquired Property to a suspect or accused and the person by whom property has been seized or an attachment has been imposed on property, if such persons exist in the relevant criminal proceedings, or to another person who has the right to concrete property, simultaneously indicating the right to. 1) participate in proceedings regarding criminally acquired property personally or through the intermediation of a defence counsel or representative; 2) express his or her attitude in court, orally or in writing, toward the taken decision; submit applications to the court.
4.1.1.1.16 Lithuania The decisions are taken ex parte.
In accordance with the procedure prescribed, the resolution to impose temporal limitation of the ownership rights shall be announced promptly but not later than on the following working day to the person whose ownership rights to the property are temporarily limited
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and to all owners/co-owners of the property subject to temporary limitation of ownership rights.
Copy of the resolution on a temporary limitation of the ownership rights shall be delivered to the owners/co-owners of the property subject to temporary limitation of ownership rights. Where there is no possibility to announce the resolution without delay, it shall be considered that such resolution was properly announced upon its registration in the registry of property seizure orders (Art. 152 part 2 of the CCP).
4.1.1.1.17 Luxembourg The seizing order is a unilateral decision of the investigation magistrate, which is brought to the knowledge of the defendants at the moment of its execution.
The confiscation is the result of an adversarial procedure.
4.1.1.1.18 Malta The decisions are taken ex parte.
The Criminal Court is obliged to accede to a request made by the prosecution to freeze the assets of the accused. In the case of confiscation, this is the automatic consequence of a conviction.
As per article 22A(2) of the DDO, the order issued by the Court shall become operative and binding with immediate effect. The Registrar of the Court is to cause a notice to be published without delay in the Government Gazzette, and shall cause a copy thereof to be registered in the Public Registry with respect to immovable property.
With particular reference to financial crime offences, sub-article 1B to article 23B holds that article 7 of the Money Laundering Act shall mutatis mutandis apply to the Criminal Code.
Article 7 of the said Act provides the special court proceedings in the event that following an order for the forfeiture or confiscation as per article 23B(1A) above, the person convicted or any other person interested may file an action before the Civil Court, First Hall, to prove that the proceeds or property in question were superfluous to the offence. The action in question must be brought before the Court within three months from the date of the definite judgment.
Article 7 holds that the ‘the applicant shall attach to the application all such documents in support of his claim as it may be in his power to produce and shall indicate in his application the names of all the witnesses he intends to produce, stating in respect of each the proof which he intends to make’. The emphasis on expediency of this procedure is
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evident in sub-article 4, which states that ‘the court shall, without delay, set down the application for hearing at an early date, which date shall in no case be later than thirty days from the date of the filing of the application’.
Once this is done, both the application and the notice of the date of hearing shall be served on the Commissioner of Police without delay. The Commissioner of Police must in turn file his reply within fifteen days from service.
The Court must decide on the case within twenty days from the first date of the hearing. There shall be no adjournment to be granted, except with the consent of both parties or for exceptional reasons, to be recorded by the court. Sub-article 6 goes on to state that ‘such adjourned date shall not be later than that justified by any such reason’.
Article 7(8) holds that ‘any decision revoking the forfeiture of immovable property shall be deemed to transfer the title of such property back from the Government to the party in favor of whom it is given, and such party may obtain the registration of such transfer in the Public Registry’.
Article 8 of the same Act holds that in the case where the Court accepts the demand, the property shall cease to be forfeited and shall revert to the applicant upon the judgment becoming definite. The applicant shall also be entitled to the recovery of the income received by the Government from such property during the period of forfeiture.
4.1.1.1.19 The Netherlands The initial decision on seizure is made ex parte. All other decisions are not.
The person is directly or as soon as possible informed about the seizure.
Because they are informed about the court dates when the confiscation procedure is handled, they are able to be present and participate.
4.1.1.1.20 Poland According to CCP reasons must be given to decisions to confiscate.
The person may hire a lawyer or if the person cannot afford a lawyer, may apply to a court for granting legal aid.
Confiscation regulated in the CC is regarded in Poland as a penal measure. The legal remedies for persons whose rights may be breached in relation to execution of freezing and confiscation orders are the most important procedural safeguards. As it was mentioned (see 4.1), the lack of relevant procedural guarantees in European mutual recognition of confiscation orders is one of the most important weaknesses of the current system.
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While executing a freezing orders, the Polish authorities are obliged to apply special provisions indicated by the requesting authority if they are not contrary to the principles of the Polish legal system (art. 589r § 1 CCP).
Where the execution of a confiscation order is requesting by another Member State, a Polish court is taking the decision in chamber with the presence of a public prosecutor, the perpetrator and his lawyer if he appears (art. 611fs).
All parties, including affected third parties are notified of the hearing. They may take part in the hearing and present their positions. If the perpetrator is not present on the Polish territory and does not have a lawyer, the president of the court can designate ex officio a lawyer for him (article 611 fx § 1 CCP).
4.1.1.1.21 Portugal Decisions are not taken ex parte.
A person will be informed only after the execution because the procedure for executing a freezing order follows those provided for a criminal procedural law.
Concerning confiscation orders, the implementation of the decision follows the criminal procedural law, having the competent court in criminal matters exclusive competences to decide on the modalities of implementation and to determine all the measures relating thereto. The person will be informed after the confiscation decision is taken.
In Portugal, confiscation of proceeds and instrumentalities of crime is ordered by a criminal court in the context of a criminal proceeding based solely by the needs of prevention. It is not an accessory penalty, because it has no relation with the fault of the suspect or accused person, nor an effect of the conviction, because does not depend on the existence of a conviction and not even a security measure, because it is not based on the dangerousness of the suspect or accused.
With respect to extended powers of confiscation, as part of the non-conviction based confiscation system, notwithstanding the statutory reversal of burden of proof in Portugal, the presumption of innocence of the accused is respected due to a range of safeguards provided by law and described by the Supreme Court. "First, it operates only within a list of crimes, then the presumption, supposes the prior conviction for one of those crimes; on the other hand, it is steerable, only to the product and advantages, and finally, not less essential, the defendant may move away the presumption by demonstrating the lawful origin of the assets or benefits.
4.1.1.1.22 Romania According to the provisions of Art. 168 of the Criminal Procedural Code, the suspect, the defendant or the person civil responsible can formulate a complaint in any phase of the
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criminal file. During criminal investigation the complaint is forwarded to the hierarchically superior prosecutor. This solution is final. The complaint does not suspend though the execution of the measure (Art. 275 of the Criminal Procedural Code). The complaint is solved in a period of maximum 20 days and the solution is communicated to the person who filed the complaint.
After the first hearing, during the trial, the defendants can contest the measure. The case is tried in public session, the parties being present and assisted by legal attorneys (Art. 168 and 171 of the Criminal Procedural Code).
After the decision is final, an appeal can be lodged in accordance with civil law (Art. 168 paragraph 3 of the Criminal Procedural Code).
Also extraordinary legal remedies can be lodged if the legal conditions are fulfilled (contestation in annulment and review).
During the criminal trial, the prosecutors can decide on a freezing order without summoning the suspected persons or the defendants (therefore, in their absence).
During trial, the defendants are summoned; therefore there is an oral and contradictory procedure.
According to the provisions of the Romanian Criminal Procedural Code (art. 165 and 166) after the issuing of the freezing order it is necessary to identify and evaluate the property. During the written procedure it is necessary to put into writing the objections of the parties and any other interested parties, if any. A copy of the written of the protocol is left to person who was subject to the freezing procedures, so the person is informed during this procedure.
As regards the confiscation measure disposed in court, the procedure is oral and contradictory as previously mentioned.
4.1.1.1.23 Slovenia
In accordance with Article 21 and Article 24 of the ZOPNI, the decisions on the temporary securement of confiscation of assets and decisions on the temporary confiscation of assets of illicit origin must contain the statement of reasons. The person against whom the temporary securement or confiscation has been ordered is notified after seizure and may file an objection against the decision on the temporary securement of confiscation of assets or against the decision on the temporary confiscation of assets of illicit origin.
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4.1.1.1.24 Slovakia In general, an owner (designated owner) of assets is always a party to the proceedings before the confiscation order is issued and has a right to appeal against it. During the procedure, the judicial body is responsible to prove the illegal origin of an assets as well as knowledge (aware) of third person of this origin. Of course, bona fide principle should be considered before the final decision.
There are a number of remedies and/or procedural safeguards incl. e.g. the principle that a freezing order “shall not include the financial assets which are necessary to satisfy the minimum needs of the accused person or their dependents”- article 95 section 4, Criminal Procedure Code.
The prosecutor can also set aside a freezing order if the order is not necessary anymore for the purposes of the criminal proceedings.
The person, whose assets were frozen, is allowed to ask for setting aside (review) or reduction of the seizure. The presiding judge during the trail and prosecutor in the preliminary proceedings shall decide on such application without delay. Against any decision a complaint may be lodged within 3 days after delivery of such decision.
In a case of a confiscation order an involved person is always party of the proceedings and he or she can file any motions against order, incl. appeal.
Decisions are taken ex parte for freezing orders. In a case of freezing order, the people involved are informed only after the issuing and/or executing of such order.
Decisions are not taken ex parte for confiscation orders.
Under Slovak law, the person affected by the measures has a right to contest it (including appeal and complaint as described above).
Under Section 2 (7) of the Code of Criminal Procedure, everyone has a right to a fair hearing of his criminal case by an independent and impartial tribunal in reasonable time and in his presence, and to have an opportunity to comment on any evidence, unless the Code of Criminal Procedure states otherwise.
Under Section 2 (10) of the Code of Criminal procedure, the authorities involved in the criminal proceeding shall proceed so as to properly establish the facts of the case following the standard of proof of “beyond a reasonable doubt”. They shall thoroughly clarify circumstances regardless of whether they prejudice or benefit the accused, and they shall take the evidence in either direction so as to enable the court to make a fair decision.
An appeal against decision on confiscation is admissible under Slovak law.
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Under Section 45(5) of the Code of Criminal Procedure, the judge in the pre-trial proceeding and the court shall appoint to such person an attorney in case it is necessary in order to protect the interests of such person.
Under Section 45 of the Code of Criminal Procedure, the person affected by the confiscation (person concerned) has the following rights:
- once the petition for imposition of protective measure is filed, he/she has a right to give a statements in relation to the circumstances and evidences presented in the petition;
- to be present at the main hearing and public session, to submit petitions and evidences and review the court file;
- to file remedies under Code of Criminal Procedure.
4.1.1.1.25 Spain The confiscation needs to be specifically requested. The defendant will be informed of the decision to freeze and confiscate criminal assets during a stage between the prosecutorial phase and trial phase.
Excessive response times to orders to freeze criminal assets have already impeded the effective enforcement of such orders, in particular, transfer time lapse on bank accounts.
The registered owner of the assets whose confiscation is requested has the right to appear and to be defended assimilating his position to the one of the third party responsible civically (articles 615 and following of the Criminal Procedure Code). The third party has the right to a lawyer. A confiscation order can be appealed within 10 days of the notification. Article 846 bis f) of the Criminal Procedure Code establishes that the court should make a decision on appeal within 5 days after the hearing. Article 846 bis b) sets that the 10 days delay is a right of the Public Prosecutor, the convicted person and the other parties, including third parties.
Confiscation is limited to the proceeds gained by the offences and is not extended to all the properties of the accused. Article 127.1 of the Criminal Code establish that “All penalties imposed for a malicious felony or misdemeanour shall lead to loss of the assets obtained therefrom and of the goods, means or instruments with which they were prepared or executed, as well as the gains obtained from the felony or misdemeanour, whatever the transformations these may have undergone.” However, Spain has a system of extended confiscation in specifics cases regulated in article 127.1 paragraph 2 “The Judge or Court of Law shall extend the seizure of assets, goods, instruments and gains for criminal activities committed within the setting of a criminal or terrorist organisation or group, or for an offence of terrorism. For these purposes, the property of each and every
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one of the persons found guilty of felonies committed within the criminal or terrorist organisation or group or for an offence of terrorism that is disproportionate in relation to the revenue lawfully obtained by each one of those persons shall be deemed to have been obtained by the criminal activity.”
If all the assets of the defendant are proceeds of crime and he is left with nothing so he can’t even hire a lawyer, in application of the principle of the right to defense sets out in article 24 of the Spanish Constitution and article 119 of the Spanish Constitution, an accused person who is able to demonstrate that his resources are insufficient may request a court-appointed lawyer and attorney. Articles 118 and following of the Criminal Procedure Code also set out the right to defense. In case of lack of resource the defendant must submit an application for legal aid.
“Article 24 of the Spanish Constitution
1. All persons have the right to the effective protection of the judges and courts in the exercise of their rights and legitimate interests, and in no case may there be a lack of defence.
2. Likewise, all have the right to the ordinary judge predetermined by law, to defence and assistance of an attorney, to be informed of the accusation made against them, to a public trial without delays and with all the guarantees, to utilize the means of proof pertinent to their defence, to refrain from self-incrimination, to refrain from pleading guilty, and to the presumption of innocence.
The law shall regulate the cases in which for reasons of family relationship or professional secrecy it shall not be obligatory to make declarations concerning allegedly criminal actions.”
“Article119 of the Spanish Constitution
Justice shall be free of charge when the law so provides and in any case for those who have insufficient means to litigate.”
Article 24 of Spanish Constitution establishes the right to a defence.
“1. All persons have the right to the effective protection of the judges and courts in the exercise of their rights and legitimate interests, and in no case may there be a lack of defence.
2. Likewise, all have the right to the ordinary judge predetermined by law, to
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defence and assistance of an attorney, to be informed of the accusation made against them, to a public trial without delays and with all the guarantees, to utilize the means of proof pertinent to their defence, to refrain from self-incrimination, to refrain from pleading guilty, and to the presumption of innocence.
The law shall regulate the cases in which for reasons of family relationship or professional secrecy it shall not be obligatory to make declarations concerning allegedly criminal actions.”
Article 129.1 of the Criminal Code establishes the obligation for the judge to issue a reasoned decision. And article 19.1.e) of Act 4/2010 states the obligation to communicate to the accused person the existence of a judicial proceeding against him.
Article 23 of Act 4/2010 establishes the rules for remedies for the persons affected by a confiscation order.
Article 23 establishes that decisions given by the competent judge on recognition and execution of orders issued by another Member State may be subject to a right of appeal. Public Prosecutor, the convicted and legitimate rights and interest’s holders shall file reconsideration and appeal remedies, which do not suspend the execution.
Article 23 refers to article 795 of the Criminal Procedure Code.
4.1.1.1.26 Sweden The rules of the Code of Judicial Procedure require that the parties are duly notified of the measures directed at them, the motives behind the measures and the means of appeal.
Persons affected by the measure are informed in writing by the police/prosecutor (serving). One procedural safeguard afforded to a suspect is that a decision on provisional attachment or seizure has to be proportional. This means that property may be seized (or subject to provisional attachment) only if the reasons for seizure (or provisional attachment) outweigh the consequent intrusion or other detriment to the suspect or to another adverse interest.
One procedural safeguard afforded to the suspects is that a decision on provisional attachment or seizure has to be proportional which means that property may be seized (or subject to provisional attachment) only if the reasons for seizure (or provisional attachment) outweigh the consequent intrusion or other detriment to the suspect or to another adverse interest.
As regards provisional attachment, a hearing is held prior to the courts decision. The suspect (and his legal counsel) will be summoned to a court hearing.
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As regards seizure, the prosecutor will not inform the suspect beforehand. As regards decisions on seizures, the person from whom seizure is made shall promptly be notified of the seizure and of the disposal of the seized property. When a dispatch in the possession of a transport undertaking is seized, the addressee, and also the sender if known, shall be notified as soon as notice can be given without impairing the inquiry.
Decisions on provisional attachment and seizure can be appealed. As regards provisional attachment, a hearing is held prior to the court’s decision. As regards seizure, the suspect will not be informed by the prosecutor beforehand, but shall promptly be notified of the seizure and of the disposal of the seized property. It may also be possible to seek compensation (damages) from the Chancellor of Justice. There is no time limit to appeal seizure or provisional attachment decisions prior to main hearing. Appeal against provisional attachment or seizure does not suspend the decision. One of the procedural safeguards afforded to a suspect is that a decision on provisional attachment or seizure has to be proportional. This means that property may be seized (or subject to provisional attachment) only if the reasons for seizure (or provisional attachment) outweigh the consequent intrusion or other detriment to the suspect or to another adverse interest.
4.1.1.1.27 United Kingdom Defendants would have the right to challenge any court decision. Specific remedies and safeguards for conviction based and non-conviction based freezing and confiscation orders made in England and Wales are detailed below. Similar powers exist for Scotland and Northern Ireland.
Conviction-based (Part 2 POCA) restraint orders:
• Section 42 of POCA gives the defendant the right to seek the discharge (cancellation) or variation of a restraint order.
• Appeal rights against a restraint order are found in sections 43 and 44 of POCA.
• Section 63 of POCA gives the defendant the right to seek the discharge or variation of court orders about management receivers.
• Appeal rights against court orders about management receivers are found in section 65 and 66 of POCA.
Conviction-based (Part 2 POCA) confiscation orders:
• Defendants have a general right of appeal against conviction and sentencing (as per the Criminal Appeal Act 1968), and a confiscation order would be included within the appeal against sentencing.
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Articles 6(1) and 7 of the European Convention on Human Rights (ECHR) apply to all Part 2 POCA restraint and confiscation orders.
Non-conviction based (Part 5 POCA) freezing orders:
• Under section 245B POCA defendants may apply for the discharge or variation of a freezing order made against them.
• Under section 245G POCA defendants may apply for the discharge or variation of a court order about management receivers.
• Under section 251 POCA defendants may apply for the discharge or variation of an interim receiving order.
Non-conviction based (Part 5 POCA) confiscation orders
• Under section 243 of POCA the defendant in a civil recovery case may contest the making of the order.
Article 6(1) of the ECHR applies to all Part 5 freezing and confiscation orders.
Freezing orders (both under Part 2 and Part 5 of POCA) can be (and usually are) made ex parte.
Part 2 POCA confiscation and Part 5 POCA civil recovery orders are not made ex parte.
Defendants will be served with notice of the order as per the criminal or civil procedural rules.
Participation in proceedings
Restraint orders may be made where the provisions of section 40 POCA are satisfied and the direct involvement of the defendant is not envisaged save in relation to any application under section 42(3) to discharge or vary the order.
Confiscation orders may be made under the provisions of section 6 SOCA, which do envisage the involvement of the defendant in proceedings before the Magistrates Court or the Crown Court. We therefore submit that the defendant will have an opportunity of making representations to the Court. This view is supported by the provisions of sections 16 of POCA which require that a Statement of Information must be given to the court by the prosecutor or Director. Section 17 provides that where this is served on the defendant the court may order him to indicate his response.
Notice of orders made will be served in accordance with rules applicable to criminal proceedings.
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In relation to non-conviction based civil recovery, section 243(2) POCA requires service of the proceedings on the respondent and unless the court dispenses with service, on any other person who the authority thinks holds any associated property which the authority wishes to be subject to a recovery order, wherever domiciled, resident or present. Under the Civil Procedure Rules, the parties would have the right to participate in the proceedings and to be served with applications and orders.
4.1.1.1.28 Croatia The freezing order is taken ex parte. While the confiscation order, as a part of the judgment establishing that accused is found guilty, is issued after the hearing in the presence of the accused. But there the Act on criminal procedure provides the possibility of rendering judgment in absentia.
The judicial decision shall be served to them in accordance with the Act on criminal procedure (Art. 169-177).
Freezing decision – article 11 of the Act on proceeding of confiscation of proceeds of crime regulates the freezing of property (ordering of provisional measures of securing the confiscation of proceeds of crime) as an ex parte procedure. This decision is adopted either by the instructing judge (before the presentation of the indictment), either by the State Attorney (after presentation of the indictment until its confirmation) or the Judge of the Court of the main proceeding (after the confirmation of the indictment). In case of a non-conviction-based confiscation, these measures are adopted by the investigating judge (before the starting of the proceedings) and after the starting of the proceeding, by the Judge of the Competent Court in front of which the proceeding is going on. In any case, the decision should specify the duration of these temporary measures. An appeal is possible against this decision within three days of its adoption. The procedure for appealing against the ruling on the freezing property is regulated by the Criminal Procedure Act (Art. 491-496). The Judge of the Higher Court decides on the appeal. This appeal does not suspend the execution of the Court decision. The execution of this decision will be done by the competent Court or by another competent authority as foreseen by the Law.
Confiscation order
Regarding the confiscation of the property, the above mentioned Act regulates the procedure under its articles 4 and 5. The decision on the confiscation of the property is part of the judgment. All interested parties have right on appeal before the higher Court.
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The opponent to the confiscation order can submit the request for the reopening the procedure against the confiscation order in accordance with the article 562 of the Criminal Procedure Act.
The procedure for appealing the judgment, containing confiscation order, is proscribed by the Criminal Procedure Act (art 472-496). The appeal against the judgment can be submitted in the term of 15 days (this term can be prolonged under the conditions proscribed by the Article 463 of the Criminal Procedure Act). The appeal will suspend the execution of the Verdict.
The right to appeal is proscribed by the above mentioned acts, so the Court decides on each appeal that is submitted in the proscribed term by the authorized person, in accordance with the Criminal Procedure Act.
The procedure on the request for the reopening of the procedure related to the decision on the confiscation of the property contained in the Verdict of judgment, is regulated by the Criminal Procedure Act (art 497-509). The Criminal Procedure Act does not proscribe the delay for submitting the request for the reopening the criminal procedure.
Summary In all countries freezing orders exist and can be taken ex parte where the circumstances warrant prompt action or aim at preventing the transfer of the assets. Common features in the Member States are: After being taken the affected persons are notified Affected persons have a right to contest the freezing order both as such or with respect to its scope Freezing orders can be taken at different stages of the proceedings` Freezing orders have to be motivated and proportionate to the objectives pursued Freezing orders have to be confirmed by a court or a judge at one point Freezing orders are time-limited Not all the assets of an affected person can be frozen. An amount equivalent to minimum subsistence cannot be frozen. An appeal lodge against a freezing order does not suspend it.
In some countries freezing orders lapse automatically after a certain time unless renewed. In order countries the freezing order once confirmed by a judge may remain in force
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until trial. In some countries the time limit to appeal a freezing order is extremely short. In others such as Sweden there is no time limit prior to trial. Courts have an obligation to decide promptly on appeals.
In all countries confiscation orders exist and are taken after the affected person has had a chance to be heard. Common features in the Member States are: Final confiscation orders are taken by judges Confiscations can be appealed. The right to legal aid where appropriate is guaranteed except in in rem proceedings Time to lodge appeals is generally short Courts should make decisions on appeals within a few days Not all the assets of an affected person can be confiscated. An amount equivalent to minimum subsistence cannot be confiscated.
In some countries confiscation is a part of the final judgement and the appeal lodged against the confiscation order is also an appeal against the whole judgment.
In the countries that have extended confiscation systems, these are usually applied under exceptional circumstances. A test of proportionality is often applied. In some countries the burden of proof may be reversed in certain circumstances and in particular in the case of prior convictions. In some countries the standard of proof is “one the balance of probabilities” rather than the more stringent standard of “beyond the reasonable doubt”.
Non conviction based confiscations are also take under exceptional circumstances and always involve a decision by a court.
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4.1.1.2. Decisions to freeze asset absent a conviction and non-conviction based confiscation absent a decision on the substance
4.1.1.2.1. Austria The public prosecutor can apply for an independent Court decision on forfeiture, extended forfeiture or recovery, where there is sufficient reason to believe that the requirements for the sanctions are satisfied and a decision in a criminal proceeding is not possible. In this case the competent court has to adjudicate on the prosecutor’s application in independent proceedings after a public and an oral hearing. The competent court is the district court of the district where the criminal act took place or if the venue of the criminal act is unknown or abroad the district court with the jurisdiction for the location of the property at the time of the proceedings has to decide.
Additionally to the provisions, the Austrian Criminal Code mentions the possibility of a non- conviction based recovery. Accordingly assets used in order to commit a punishable act or designated therefore or which are proceeds of such an act may be subject to recovery, if the specific nature of the asset is dangerous and it is likely that other criminal acts will be carried out with the asset. It is possible to recover assets due to their specific nature, even if no individual may be prosecuted or adjudged for a related punishable act.
4.1.1.2.2. Belgium Non-conviction-based confiscation does not exist in Belgium.
Confiscation is a considered a sanction and must follow a criminal conviction.
4.1.1.2.3. Bulgaria The new 2012 law on the forfeiture of criminal assets provides for the first time in 25 years a non-conviction based confiscation regime in Bulgaria. Under the new law the Commission for the Identification and Forfeiture of Criminal Assets (CEPACA) may initiate asset probes for each person against whom a criminal investigation has been initiated. If CEPACA finds inconsistencies between the declared income or income derived from sources found to be legitimate and the assets held, it may confiscate the assets for which no apparent legitimate source exists.
4.1.1.2.4. Cyprus In Cyprus, the non-conviction-based freezing and confiscation orders can be enforced in cases where a suspect has fled the jurisdiction or has died, and if certain conditions are satisfied. The AML Law provides the non-conviction-based freezing and confiscation order.
Cyprus has no provision allowing civil forfeiture of assets.
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4.1.1.2.5. The Czech Republic The Czech Republic has no system of non-conviction based confiscation of proceeds of crime at the moment. The Czech authorities have prepared new legislation with possible added taxation on such property, but this is still under development
This mechanism is based only in criminal law.
According to the criminal code, a court can decide about forfeiture:
If a court cannot impose a punishment to a perpetrator (i.e. he/she is under aged, insane, …) or decided not to punish a perpetrator in petty crimes, or if an item is dangerous for the public or items are proceeds of crime that were transferred to other persons, Forfeiture (zabrání) is one of protective measures (non-conviction based confiscation).
4.1.1.2.6. Denmark The non-conviction-based confiscation does not exist in Denmark.
However, confiscation may take place for preventive purposes without obtaining the conviction of the perpetrator. Confiscation, proceeds from criminal acts, can take place even if the perpetrator is deceased.
Denmark has no experience in international co-operation regarding civil and criminal non- conviction-based confiscation orders.
In this connection it should be noted that no specific time-limit applies to duration of a freezing order, apart from the norms of the European Convention on Human Rights in relation to the duration of criminal law procedures. The same applies to non-conviction based confiscation.
4.1.1.2.7. Estonia Estonia does not have mechanisms to apply a non-conviction based confiscation.
4.1.1.2.8. Finland A general condition for confiscation is an act criminalised by law.
However, it is not necessarily required that the person has been convicted for a crime, but it has to be proven that a crime has been committed. In this sense, legislation allows for non-conviction based confiscation. The Criminal Code lists situations where confiscation is possible even if an act criminalised by law does not contain all elements of a criminal offence.
These situations are:
Where the perpetrator has not attained the age of fifteen years at the material time, or is without criminal capacity. Page 324 of 477
Where the perpetrator is exempt from criminal liability pursuant (e.g. mistake as to the unlawfulness of the act under certain conditions, self-defence etc.);
Where a corporation may be sentenced to a punishment even if the individual committing the offence cannot be identified or for some other reason cannot be sentenced to a punishment.
Civil law based confiscation is not possible in Finland.
4.1.1.2.9. France Currently there is no mechanism for non-conviction-based confiscation in France.
Confiscation orders are based on a criminal conviction. Recently however, the confiscation has been extended to assets that are not strictly the product of the crime while a new law has authorized the freezing of the assets from the beginning of the investigation.
Furthermore, the confiscation is foreseen as a complementary sentence for offences concerning anyone who is in relation with the person well-known for committing criminal offences and who is not able to justify his/her income.
4.1.1.2.10. Germany A civil seizure or confiscation is theoretically possible in line with German legislation. However, a practical case proceedings is still required in order to define how the relevant courts will act upon a foreign non-conviction-based seizure, forfeiture or confiscation
According to the Criminal Code, the forfeiture or confiscation of the object may be independently ordered if:
• For factual reasons no particular person may be prosecuted or convicted for the crime, or
• Prosecution of the crime is barred by the statute of limitations, or
• For legal reasons no particular person may be prosecuted and the law does not provide otherwise, or
• The court dispenses with punishment or if the proceeding is terminated pursuant to a provision which permits this in the discretion of the public prosecution office or the court or with the agreement of both, and
• If the preconditions under which the measure is prescribed or permitted otherwise exist.
4.1.1.2.11. Greece In Greece, the confiscation can be ordered as a security (protective) measure against whoever is in possession of instrumentality, proceeds etc provided that they pose a threat
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to public order and irrespective of whether a certain person has been convicted for the relevant offence.
It is generally possible to confiscate proceeds of crime without a conviction in case of money laundering and of financing of terrorism. Non-conviction-based confiscation may be ordered when the reasons for not obtaining a conviction are other than insufficiency of evidence and more specifically where no criminal proceedings have been initiated because of the death of the offender or where prosecution was terminated or declared inadmissible (e.g. due to statute of limitations). There have been few – if any – such cases, due among others to the restrictive requirements for the application of the main provision allowing such confiscation.
4.1.1.2.12. Hungary In Hungary, the non-conviction-based confiscation is possible in some exceptional cases as foreseen by the law:
According to the Criminal Code, the confiscation of objects or assets may be ordered, even if the perpetrator cannot be punished due to:
• Being a minor,
• Mental disorder (note: in these cases, the accused will be acquitted),
• If the perpetrator has been reprimanded by the prosecutor or the court.
Hungarian law differentiates between the termination and preclusion of criminality, but both can give grounds to non-conviction based confiscation. The new Criminal Code also establishes termination of criminality as an exception, e.g. death, statute of limitations or pardon. Preclusion is included in the Criminal Procedure Act.
According to the Criminal Procedure Act, non-conviction based confiscation can be ordered, if criminality was precluded by incapacity, lawful self-defense or other grounds as defined in the Criminal Code.
The Criminal Procedure Act also empowers the court to order confiscation, if the procedure itself (and not criminality) was terminated, or because there was no private motion, report or request.
The Criminal Procedure Act further broadens this power by introducing a special criminal procedure: upon the motion of the prosecutor, if no criminal proceedings have been launched, or the proceedings have been terminated or suspended, the court shall decide on confiscation, confiscation of assets of any seized items.
There is no expiry for the duration of a freezing order absent a conviction, but there are other guarantees against the possibility of “permanent freezing”.
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First of all, if criminal proceedings are terminated and the court does not order (non- conviction based) confiscation, freezing will be terminated too. If not, legal remedies are available: protest or appeal.
If non-conviction based confiscation is ordered, freezing will cease, but the confiscation will be carried out (the probability of an acquittal during the criminal procedure has no effect on freezing decisions, precisely because of the possibility of non-conviction based confiscation).
Secondly, Section 354 of the CPA states that if the court of first instance does not order the confiscation of objects or assets, even though the law prescribed it: a) the court of second instance may order confiscation itself (even in the absence of appeal), provided the all the relevant facts of the case have been cleared before the court of first instance, or b) the court of second instance shall order the court of first instance to initiate the special procedure for confiscation that is Section 596 of CPA; please see QUESTION 3.1 point c) under point 2) for more details.
The time-limit for the duration of a non-conviction based confiscation before it expires absent a substantive decision
Confiscation – including non-conviction based confiscation – can only be ordered by a court: there is no “conditional or precautionary confiscation” ordered by other authorities. That role is fulfilled by the instruments of seizure, sequestration and precautionary measure. Therefore, confiscation orders by the court are substantive and final (except for the possibility of legal remedies, of course).
The duration of a decision to freeze assets before it expires absent a conviction
There is no expiry for the duration of freezing absent a conviction, but there are other guarantees against the possibility of “permanent freezing”.
First of all, if criminal proceedings are terminated and the court does not order (non- conviction based) confiscation, freezing will be terminated too. If not, legal remedies are available: protest or appeal.
If non-conviction based confiscation is ordered, freezing will cease, but the confiscation will be carried out (the probability of an acquittal during the criminal procedure has no effect on freezing decisions, precisely because of the possibility of non-conviction based confiscation).
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4.1.1.2.13. Ireland The national mechanism for non-conviction based confiscation orders is governed by the Proceeds of Crime Act, 1996.
The application taken under is in rem, rather in personam. Procedures are set out which allow for an application to be brought to the High Court to have assets, which are believed to be (either directly or indirectly) proceeds of criminal activity. Because the application is in rem it is the assets that are to object of the action and not the holders.
4.1.1.2.14. Italy
The courts have sometimes allowed the confiscation of profits even in the event of termination of the offense pursuant to art. 240 C.C., with an interpretation that would adapt the rules on the evolution of the institution of forfeiture, but that violates the principle of legality, so much so that the United Chambers of the Supreme Court have established that the extinction of the offense preclude the confiscation of the things that make up the price, pursuant to art. 240, paragraph 2, no. 1 C.C. while stressing the need for reform legislation to prevent the patently unreasonable consequences of the limitation of the current legislation.
4.1.1.2.15. Latvia According to the Latvia Criminal Procedure Law, the confiscation of property to be executed in Latvia should be determined in criminal proceedings taking place in Latvia.
Non-conviction-based orders are foreseen by the Criminal Procedure Law and can be issued within a criminal proceeding.
The Criminal Procedure Law provides that a person directing the proceedings has the right, in the interests of solving the financial matters, which have come about in pre-trial criminal proceedings, in a timely manner and in the interests of the economy of proceedings, to separate the materials from a criminal case regarding criminally acquired property and to initiate proceedings, if the following conditions exist:
• The totality of evidence provides a basis for believing that the property that has been seized or upon which an attachment has been imposed is of a criminal origin or related to a criminal offence;
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• Due to objective reasons, the transfer of criminal case to court is not possible in the near future (in a reasonable term), or such transfer may cause substantial unjustified expenses.
If the conditions referred to in the previous paragraph exist, a person directing the proceedings shall take a decision to initiate proceedings regarding criminally acquired property and transfer the criminal case regarding the criminally acquired property to a court.
In adjudicating materials regarding criminally acquired property, a court shall decide:
• Whether the property is related to a criminal offence or is of criminal origin;
• Whether there is information regarding the owner or lawful possessor of the property;
• Whether a person has lawful rights to the property;
• Actions with the criminally acquired property.
If a court finds that the connection of property with a criminal offence has not been proven or the property is not of criminal origin, such court shall take a decision to terminate proceedings regarding the criminally acquired property.
There is a reversed burden of proof for criminally acquired property.
4.1.1.2.16. Lithuania Confiscation of criminal assets is applicable only in criminal proceedings.
The Criminal Code defines confiscation of property as the compulsory uncompensated taking into the ownership of the State of any form of property subject to confiscation and held by the offender or other persons.
According to Lithuanian laws, confiscation of property is a penal sanction, not a penalty, therefore it is applied not only after convicting a person, but also while releasing a person from punishment or from criminal responsibility.
Moreover, according to the Criminal Code confiscation of property could be applied while terminating the pre-trial investigation on the certain basis.
According to the Criminal Code confiscation of property is a penal sanction, which may be imposed on an adult person released from criminal liability. Confiscation of property may also be imposed on juveniles and legal persons. Moreover, confiscation of property may be imposed in conjunction with a penalty. Thus confiscation of property is possible only in criminal proceedings.
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Confiscation of property may be applied in respect of a person who is not a party in the criminal case (confiscation from a third party). The property which belongs to another natural or legal person and which is subject to confiscation shall be confiscated irrespective of whether that person has been sentenced for the commission of the act prohibited by this Code or not, if:
• When transferring the property to the offender or other persons, he was or ought to and could have been aware that such property would be used for the commission of the act prohibited by this Code;
• This property has been transferred to him in a fake transaction;
• This property has been transferred to him as to a family member or close relative of the offender;
• This property has been transferred to him as to a legal person where the offender, his family members or close relatives hold a managerial position, membership in its management body or hold not less than fifty per cent of the shares (interest, contribution, etc.);
When acquiring this property, he or the persons who held the managerial position and had the right of representation of and decision making on behalf of or the control over the performance of the legal person were or ought to and could have been aware that this property is an instrument, means or result of the act prohibited by the Criminal Code.
4.1.1.2.17. Luxembourg Currently there is no mechanism for non-conviction-based confiscation in Luxembourg.
Nevertheless, there is a limited possibility of non-conviction-based confiscation but only for proceeds generated by money laundering or terrorism. Confiscation of the object, direct or indirect proceeds or any patrimonial advantage of these crimes including revenues generated by the proceeds can be confiscated even in case of an acquittal, penalty exemption, extinction or prescription of public prosecution.
4.1.1.2.18. Malta Currently there is no mechanism for non-conviction-based confiscation in Malta.
The applicability of the procedure of civil forfeiture of assets is restricted to a very limited number of laws: the Exportation of Certain Articles (Prohibition) Ordinance, the Customs Ordinance, and the Industrial Property Protection Ordinance, amongst others.
Under the Customs Ordinance the forfeiture occurs automatically, and independently of whether the proprietor is the defendant or a third party who is not involved in the offence.
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In addition, the forfeiture takes place independently of the knowledge of the commission of the offence in question.
4.1.1.2.19. The Netherlands Non-conviction-based confiscation does not exist in Netherlands.
4.1.1.2.20. Poland Non-conviction-based confiscation orders may be issued in criminal proceedings.
In criminal proceedings non – conviction orders may be issued in following situations:
• Discontinuance of proceedings due to the insanity at the moment the forbidden act was committed.
• Discontinuance of proceedings because the social danger of the criminal act is trifling
Conditional discontinuance of the proceedings.
• There is a circumstance which precludes punishing of the perpetrator of the criminal act.
• The proceedings are discontinued because the perpetrator of the crime was not identified if there is a regulation allowing forfeiture.
According to the Code of Contraventions, confiscation of objects can be ordered even if there is a circumstance excluding punishment of the perpetrator.
Non conviction based confiscation order in civil proceedings may be issued on the base of the of the Civil Code but in case of forfeiture of a performance to State Treasure if the performance was knowingly made in exchange for perpetrating an act forbidden by statue or for vile purpose.
4.1.1.2.21. Portugal Portugal has provisions allowing for the confiscation of the direct proceeds of crime and instrumentalities of crime without a criminal conviction. On the contrary, there are no provisions allowing for the confiscation of the indirect proceeds of crime without a criminal conviction.
The mechanism is implemented through a criminal law based order.
In Portugal, confiscation of proceeds and instrumentalities of crime is ordered by a criminal court in the context of a criminal proceeding based solely by the needs of prevention. It is not an accessory penalty, because it has no relation with the fault of the suspect or accused person, nor an effect of the conviction, because does not depend on the existence of a conviction and not even a security measure. The objects used or
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intended to be used for the commission of a typical unlawful act, or which have been produced thereby, are confiscated when, by virtue of their nature or of the circumstances of the case, they endanger the safety of the persons, the morality or the public order, or seriously risk to be used for the commission of new typical unlawful acts. It is possible to confiscate even if no specific person may be punished for the act.
4.1.1.2.22. Romania At this moment, there is no special mechanism in Romania regulating non-conviction based confiscation.
In spite of this, it has to be stressed that confiscation can be disposed even though no punishment has been imposed upon a person, since confiscation is a safety measure and not a punishment.
For example, the prosecutor when the criminal investigation has been stopped, or when the prosecutors have dropped the charges upon the person can dispose the confiscation.
The court can also solve the case through a civil action if situations such as amnesty, limitation statutes, death of the defendant, mediation between the parties occur, and if the victim does not become a civil party, the confiscation can be disposed.
4.1.1.2.23. Slovakia The Code of Criminal Procedure regulates a non-conviction based confiscation and the enforcement of such orders.
The Criminal Code permits confiscation in absence of prior conviction. If the punishment of the forfeiture was not imposed, the court shall impose the confiscation of items if:
• It belongs to a person who may not be prosecuted or convicted,
• It belongs to an offender whose punishment the court waived or to an offender against whom criminal prosecution was terminated or to an offender against whom criminal prosecution was conditionally suspended or to an offender against whom criminal prosecution was terminated due to the approval of a settlement,
• It is in regard to goods without control stamps or without other technical control measures required by generally binding legal regulations for its identification for tax purposes,
• The circumstances of the case justify the assumption that the matter could be a source of financing terrorism, or
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• The safety of persons or assets, or another similar public interest requires it.
It applies in case of criminally liable person able to be perpetrator of a criminal act who accomplished all elements of a criminal act and who must be prosecuted for other grounds than absence of criminal liability (age, insanity). For these reasons, a protective measure such as confiscation of an asset may not be imposed where a person was not criminally responsible at the time of commission of a crime due to his/her insanity. However, even these cases it is not excluded that a thing will be confiscated on grounds of public interest. But it results from wording of this provision that thing may be confiscated after final meritorious decision at least within pre-trial proceedings.
Death of suspected or accused person represents grounds of inadmissibility of further criminal prosecution. In such cases, criminal prosecution is discontinued and grounds for confiscation of an asset disappear because as a consequence of death, the person loses his/her capacity to have rights and duties and his/her property rights are transferred to inheritors and taxed.
If accused person is ill or has fled, this is not ground for discontinuance of criminal prosecution but only for suspension thereof because during suspension, the limitation period is also suspended. In such cases, confiscation of an asset under Criminal Code not possible.
4.1.1.2.24. Slovenia The non-conviction-based confiscation in Slovenia has been adopted recently.
This mechanism is implemented through a civil law based order.
In accordance with Article 27 of the ZOPNI, the legal presumption that the assets are of illicit origin may be disproved if the defendant is able to prove that it is likely that the assets were obtained from his incomes and/or by legal means. The legal presumption that the assets were transferred without remuneration may be disproved if the defendant is able to prove that it is likely that the assets were paid for in accordance with their actual market value (Article 27 of the ZOPNI).
4.1.1.2.25. Spain Non-conviction-based confiscation does not exist in Spain.
4.1.1.2.26. Sweden National non-conviction based confiscation orders are only possible in very specific cases.
This provision makes it possible to confiscate property as a result of a crime if the offender has died or if, for some other reason, a criminal sanction cannot be dealt out. This is,
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furthermore, only possible if, in proceedings pertaining thereto, a summons has been served within five years from the time when the crime was committed.
There is, however, no possibility to confiscate property in cases where conviction cannot take place due to long-term sickness of the suspect or in cases where conviction is not possible within reasonable time limits because the suspect is absconding and there is a risk that conviction will not be possible due to prescription.
4.1.1.2.27. United Kingdom The proceeds of Crime Act include a non-conviction based confiscation scheme known domestically as ‘civil recovery’.
The principal criteria for civil recovery are:
• Such proceedings are essentially in rem civil proceedings
• The enforcement agency must prove to the High Court that particular kinds of criminal conduct have occurred and that the property was obtained through unlawful conduct;
• There are protections for bona fide purchasers of property and victims of crime;
• There is explicit provision that courts may not make recovery orders which are incompatible with Convention rights;
• Functions must be exercised in a way to best reduce crime and that Guidance must indicate that the reduction of crime is in general best secured by criminal investigations and criminal proceedings.
• Criminal prosecution would ordinarily have been considered and either was not pursued for evidential or resourcing reasons, could not be instigated or successfully completed (i.e. the defendant fled the jurisdiction/died), or was successful but there was no subsequent criminal confiscation proceedings;
• Recoverable property must have been identified and have an estimated value of at least £1,000;
• Proceedings must ordinarily be brought within 20 years of when the property was obtained;
• Recoverable property must include property other than cash or negotiable instruments (although cash is recoverable if it is in addition to other property);
Duration of orders
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In relation to conviction based restraint orders, we refer to our comments made in section 4.1 under the heading C. Suspension or Cancellation of Orders in relation to the provisions of section 42 POCA.
Rights of appeal Defendants (and respondents in civil proceedings) would have the right to challenge any court decision. Specific remedies and safeguards for conviction based and non-conviction based freezing and confiscation orders made in England and Wales are detailed below. Similar powers exist for Scotland and Northern Ireland.
Conviction-based (Part 2 POCA) restraint orders
Section 42 of POCA gives the defendant the right to seek the discharge (cancellation) or variation of a restraint order.
Appeal rights against a restraint order are found in sections 43 and 44 of POCA.
Section 63 of POCA gives the defendant the right to seek the discharge or variation of court orders about management receivers.
Appeal rights against court orders about management receivers are found in section 65 and 66 of POCA.
Conviction-based (Part 2 POCA) confiscation orders
Defendants have a general right of appeal against conviction and sentencing (as per the Criminal Appeal Act 1968), and a confiscation order would be included within the appeal against sentencing.
Articles 6(1) and 7 of the European Convention on Human Rights (ECHR) apply to all Part 2 POCA restraint and confiscation orders.
Non-conviction based (Part 5 POCA) freezing orders
Under section 245B POCA defendants may apply for the discharge or variation of a freezing order made against them. Under section 245G POCA defendants may apply for the discharge or variation of a court order about the appointment of an interim receiver.
Under section 251 POCA defendants may apply for the discharge or variation of an interim receiving order.
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We would like to mention that the above mentioned sections 245B and 245G POCA do not appear on the linked copy of the POCA as the changes have yet to be made by the government editorial team.
Non-conviction based (Part 5 POCA) confiscation orders
Under section 243 of POCA the defendant in a civil recovery case may contest the making of the order.
Article 6(1) of the ECHR applies to all Part 5 freezing and confiscation orders.
Suspension or cancellation of orders
Conviction-based (Part 2 POCA) restraint orders
Under section 40 POCA a restraint order may only be made where certain conditions are satisfied. Section 42 POCA provides in particular:
(6) If the condition in section 40 which was satisfied was that proceedings were started or an application was made, the court must discharge the order on the conclusion of the proceedings or of the application (as the case may be).
(7) If the condition in section 40 which was satisfied was that an investigation was started or an application was to be made, the court must discharge the order if within a reasonable time proceedings for the offence are not started or the application is not made (as the case may be).
Under section 48 POCA the Court may appoint a Management Receiver where it makes a restraint Order and section 63(3) provides similarly:
(a) if the condition in section 40 which was satisfied was that proceedings were started or an application was made, the court must discharge the order on the conclusion of the proceedings or of the application (as the case may be);
(b) if the condition which was satisfied was that an investigation was started or an application was to be made, the court must discharge the order if within a reasonable time proceedings for the offence are not started or the application is not made (as the case may be).
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An application in respect of restraint order would not have the effect of suspending the order. Conviction-based (Part 2 POCA) confiscation orders
Defendants have a general right of appeal against conviction and sentencing (as per the Criminal Appeal Act 1968), and a confiscation order would be included within the appeal against sentencing.
Section 14 POCA (dealing with postponement of confiscation proceedings) provides that where the defendant appeals against conviction then the permitted period of postponement is three months from the day the appeal was disposed of or determined (if this ends after two years from conviction). On an application in respect of a confiscation order, the court may decide to suspend the order. Section 31 POCA enables an appeal by the prosecutor or Director in which case the Court of Appeal may decide to quash the order (inter alia).
Non-conviction based (Part 5 POCA) freezing orders
We refer to our comments made above in relation to sections 245B and 245G POCA.
Under section 251 POCA defendants may apply for the discharge or variation of an interim receiving order.
Non-conviction based (Part 5 POCA) confiscation orders
Under section 243 of POCA the respondent in a civil recovery case may contest the making of the order.
4.1.1.2.28. Croatia Croatia has adopted in 2011, a new Law on Confiscation of Proceeds of Crime and Offence which governs the procedure for determining, ordering confiscation of the proceeds of crime, the enforcement, handling of seized property and assets, compensation of a person injured by the offense and the protection of the rights of third parties. The Court will act according to the provisions of the criminal procedure law, unless otherwise required by this Law.
In case the criminal proceedings is interrupted prior to the confirmation of the indictment or during the proceedings, and there is there a probability that the property is gain of crime, the confiscation procedure will continue upon the prosecutor’s proposal. Which means that the Court shall decide, upon the motion of the State attorney, the injured
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party or the prosecutor, the confiscation of the property that is probably a proceeds of crime, under the condition that its value is at least 5000 000 HRK.
Confiscation order
Regarding the confiscation of the property, the above mentioned Act regulates the procedure in its article 4 and 5. All interested parties have right on appeal before the higher Court. As the decision on the confiscation of the property is part of the judgment, the decision on appeal it is brought after the hearing of the accused.
The opponent to the confiscation order can submit the request for the reopening the procedure against the confiscation order in accordance with the article 562 of the Criminal Procedure Act.
The procedure for appealing the judgment, containing confiscation order, is proscribed by the Criminal Procedure Act (art 472-496). The appeal against the judgment can be submitted in the term of 15 days (this term can be prolonged under the conditions proscribed by the Article 463 of the Criminal Procedure Act). The appeal will suspend the execution of the Verdict.
The right on the appeal is proscribed by afore mentioned acts, so the Court decides on each appeal that is submitted in the proscribed term by the authorized person, in accordance with the Criminal Procedure Act.
The procedure on the request for the reopening of the procedure related to the decision on the confiscation of the property contained in the Verdict of judgment, is regulated by the Criminal Procedure Act (art 497-509). The Criminal Procedure Act does not proscribe the delay for submitting the request for the reopening the criminal procedure.
Non-conviction based confiscation
Article 2 § 2 of the Act on Proceedings of Confiscation of Proceeds of Crime or Misdemeanours provides that confiscation of proceed of crime is possible without conviction of the offender in special cases when because of the death of the accused or for any other reasons the prosecution is not possible. The decision to start this procedure will be taken by the single judge of the Court that would be competent for the criminal proceedings. Against this decision, the appeal is possible within a three days deadline.
The proposal for non-conviction-based confiscation might be presented until the expiry of deadline for prescription of the criminal proceeding foreseen by the Criminal Law for the concerned crime. In any case the prescription for the presentation of this proposal and the conduction of the procedure under this Law cannot be before 5 years deadline starting from the day of perpetration of the criminal offense. The presentation of the proposal under article 2 § 2 of this Law will interrupt the prescription deadline. If the Court doesn’t
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confirm that the defendant has committed the criminal act and has acquired a property advantage or if that advantage is entirely covered by the property claim of the injured party, the Court will reject the proposal for confiscation.
According to article 6 § 1 of the Act on Proceedings of Confiscation of Proceeds of Crime or Misdemeanours, when the above mentioned decision became enforceable, the Competent Court will held a hearing where the opposite Party will be interrogated and other proves will be presented, regarding the establishment of the criminal offence and the determination of proceeds and instrumentalities. We notice that the law does not precise that a lawyer will be assigned ex-officio to represent the interested person while a representation by a lawyer designed by the interested party himself/herself is not excluded by this formulation.
If the Court confirms that the defendant has committed the criminal offence and has obtained a benefit from it, the Court will decide the confiscation.
4.1.1.3. Right to appeal decisions The right to appeal includes related issues such as:
Time given to appeal; In cases of cross-border decisions whether the affected person is limited in his/her right to appeal to the requesting country or whether he/she can appeal in either the requesting/receiving country; Procedure for appealing a decision or obtaining a review of the decision; Delays to appeal a decision or review the decision; Guiding principles and fundamental rights taken into account in accessing the admissibility of appeals and availability of remedies; Does an appeal against or a request to review a decision to freeze or confiscate criminal assets suspend the freezing, confiscation or transfer or assets? 4.1.1.3.1. Austria Decisions of a court during the investigation procedure are subject to an appeal, which has to be filed with the court, which rendered the decision, within 14 days after notification. However if the person concerned wishes to appeal against an order of the public prosecution service, which has been authorised by a court she/he must file the appeal with the competent public prosecution service within the same time period (Section 52a para. 1 subpara. 7 EU-JZG implementing Article 8 para. 2 d of FD 2006/783/JHA).
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The public prosecutor, the accused and any other person whose interests are concerned can make appeals during the investigation proceedings.
Confiscation orders are usually part of the final verdict of the court, which is also subject to an appeal and has to be filed with the court of first instance within four weeks.
Beforehand the person concerned has to express within three days after notification of the verdict whether she/he wishes to appeal.
There are no legal provisions about a delay, i.e. suspension of notification etc.
The court of appeal has to assess whether the prerequisites for seizure are met or not. The courts are careful to ensure that the constitution and human rights principles enshrined in international agreements such as the European Convention of Human Rights and Law of the EU are respected.
During the investigation, proceeding an appeal concerning seizure has no suspensive effect. An appeal against a confiscation decision (or decision of forfeiture etc.), which is part of the final verdict will, of course, have suspensive effect.
In the state of investigation the person concerned has the possibility to appeal against the decision after notification. A successful appeal would have effect. Nevertheless the seizure in Member State B might be subject to an appeal in Member State B, as well. In case of a verdict only the final decision may be sent to Member State B
Final decisions of a court in the main trial are subject to a very comprehensive and complex procedure of appeal.
The grounds for appeal range from wrong consideration of evidence by the court to wrong application of the law etc. Of course, the person concerned might only appeal against the penalty. Even investigative measures carried out or collected unlawfully can be raised in the main trial and be a ground for an appeal against the verdict of a court.
Legal aid is possible for persons with insufficient means or where the case is particularly complex.
If an appeal were to limit the scope of the confiscation order or invalidate it, the public prosecution service would submit the decision of the Court of Appeal with the request to execute it.
Section 106 ACCP (Einspruch wegen Rechtsverletzung) states the right to file an appeal with the court if an individual’s subjective rights have been infringed by the public prosecutor. This is applicable for seizures. If the public prosecutor determines that the mentioned infringement of a right is possible, the appeal has to be followed. Additionally
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the person concerned has to be informed about how the appeal will be pursued. If necessary this may lead to an annulment of a seizure.
As the decisions about confiscation, forfeiture and recovery are part of the penal judgment, an appeal can be filed with the court within 4 weeks. Sections 280 – 296a ACCP regulate the procedure for remedies. Either an appeal to cancel the order or an appeal to the appellate court is possible.
An appeal can be filed against a court decision in an independent proceeding according to Section 445 ACCP (Section 445 para 4 ACCP). An appeal has to be filed with the court of first instance within four weeks. Beforehand the person concerned has to express within three days after notification of the verdict whether she/he wishes to appeal (Section 466 – 467 ACCP).
Against the court decision on sequestration a complaint may be filed with the appellate court. Those entitled to file the complaint are (i) the public prosecutor, (ii) the accused and (iii) every other person affected by the court decision.
It is very hard to say how long it takes to obtain a decision on a remedy. It depends on the specific case.
During the investigation proceedings an appeal concerning seizure does not lead to suspension of the freezing order. An appeal against a confiscation order (or against an order for forfeiture), which are usually part of the final judgement, do lead to suspension of the judgement and therefore of the order.
The grounds for appeals range from evidential errors by the court to wrong application of the law. Furthermore, investigative measures carried our unlawfully may be raised in the main trial and can be invoked as ground for an appeal against the final judgement.
A wrongful freezing or confiscation decision would lead to government liability (Amtshaftung). A compensation claim would for this reason need to be filed according to the Amtshaftungsgesetz. The claimant would need to prove that the decision was wrong and the amount of the damage which occurred due to the wrong decision.
4.1.1.3.2. Belgium Every person can appeal the decision or obtain a review of the decision in front of the Court of Appeal of the Court of Cassation.
Delays to appeal the decision or review the decision:
15 days after the decision’s notification.
For freezing phase:
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Article 15 of the Law of 5 August 2006 on the application of the principle of mutual recognition of judicial decisions in criminal matters between Member States of the European Union. The application of Article 61quater of Criminal procedure Code remains possible: recourse against the decision of the prosecutor/investigative judge to keep assets under seizure.
For confiscation phase:
Article 30 of the Law of 5 August 2006 on the application of the principle of mutual recognition of judicial decisions in criminal matters between Member States of the European Union: appeal of the decision of the first instance judge in front of the Court of Appeal.
An appeal against a freezing order does not suspend the freezing, the assets remain under seizure
An appeal against a confiscation order suspends the confiscation or the transfer of assets till it is a final decision
The appeal affects orders sent to another Member State in case of a confiscation (suspension of the procedure), but it is hypothetic situation because the request from Member State A must specify that the confiscation order is a final decision
But the appeal does not affect orders sent to another Member State in case of a freezing (the assets remain under seizure)
Circumstances leading an appeal to invalidation or a limitation of the scope of an order to freeze/confiscate criminal assets:
It depends of the elements of the file and the appeal judge’s appreciation.
In certain circumstances, the judge will compare his national legislation with the foreign legislation (e.g. extended confiscation in organised crime).
4.1.1.3.3. Bulgaria Appeals are possible against decisions to freeze or confiscate assets.
4.1.1.3.4. Cyprus Every person has the right to appeal or obtain a review of the decision.
Procedure for appealing the decision or obtaining a review of the decision: before District Court first, and on appeal before Supreme Court.
The review of these decisions due to their nature does not usually delay.
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Guiding principles and fundamental rights taken into account in assessing the admissibility of appeals and availability of remedies:
Depending on the case, usually is the right to appear before the Court.
An appeal against a request to review a decision to freeze/confiscate criminal assets suspends the freezing/confiscation or transfer of assets.
If an appeal were to limit the scope of the order or invalidate it, Member State A would inform immediately the other Member State.
The affected person has the right of appeal and for review of the decision.
The appeal against a decision or a request to review a decision to freeze or confiscate criminal assets temporarily suspends the actual process of the freezing or confiscation or transfer of assets – the suspension does not mean the assets can be used or moved, it simply means that the situation is suspended whilst the request for review of the decision is dealt with. It is very much dependent upon the circumstances of the actual case as to whether an appeal could lead to an invalidation or limitation of the scope of an order to freeze and or confiscate criminal assets. In the event that an appeal successfully limited the scope of the order or even invalidated it, the authorities in Cyprus would immediately inform any other Member State authorities involved if the case were a cross border case.
4.1.1.3.5. The Czech Republic Every person has the right to appeal or obtain a review of the decision.
Only a court can decide about complaint against decision about seizure even if it was issued in pre-trial proceedings – see Sec 146a (1)(c-l) of the CPC:
Section 146a Decision on a Complaint against Decisions on Seizure of Persons, Property and on Imposition of Disciplinary Fines:
(1) A complaint against a decision, by which the public prosecutor c) seized funds in a bank account or at a savings and loan association or other institution that manages accounts for other persons, decided on blocking of funds from pension supplementary insurance with a State contribution, blocking of financial credit drawing, and blocking of financial lease, decided to restrict such seizure or blocking or did not grant a request for a repeal or restriction of such seizure or blocking (Section 79a (1), (3), (4) and Section 79b), d) seized booked securities, decided on restriction of such seizure, or did not grant a request for repeal or restriction of seizure of booked securities (Section 79c (4)),
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e) impounded real estate, decided to restrict the impoundage of the real estate, or did not grant the request for the revocation or reduction of such impoundage (Section 79d (1), (7) and (8)), f) seized other asset values, decided to restrict seizure of other asset values, or did not grant a request for repeal or restriction of such seizure (Section 79e (1) and (7)), g) seized an equivalent value, decided to restrict seizure of an equivalent value, or did not grant a request for repeal or restriction of such seizure (Section 79f), h) issued an order for seizure of assets in another Member State of the European Union, decided on the recognition of an order for seizure of assets located in the Czech Republic, or decided to restrict such seizure (Section 460b, 460f and Section 460 (2)), i) seized assets of the accused person to secure a claim of the aggrieved person or decided to restrict the seizure (Section 47 and Section 48 (2)), j) seized assets of the accused person (Section 347), k) decided to impose a disciplinary fine (Section 66 (1)) or l) decided on destruction of a thing threatening the safety of people or property (Section 81b (1)), shall be generally decided within five days from expiration of the time limit for filing a complaint for all entitled persons by the court, in jurisdiction of which is operating the public prosecutor, who issued the challenged decision.
Delays to appeal the decision or review the decision:
Three days of announcement of the resolution – see Sec 143 of the CPC:
Section 143 Time Limit and Place to File:
(1) A complaint shall be filed at the authority, against the resolution of which is the complaint made, within three days of announcement of the resolution (Section 137); if the resolution is announced to both the accused person and his statutory representative or defence counsel, the time limit starts from the announcement that was performed last.
(2) The time limit to file a complaint for persons, who may file a complaint according to Section 142 (2) in favour of the accused person, shall end on the same date as for the accused person; however, the time limit for the public prosecutor always runs separately.
Guiding principles and fundamental rights taken into account in assessing the admissibility of appeals and availability of remedies:
Court will consider if a person making a complaint is entitled to do so. Page 344 of 477
Section 142 Entitled Persons
(1) Unless the law provides otherwise, a complaint may be filed by a person, who is directly affected by the resolution or who instigated the resolution by his petition, for which the law authorizes him; the public prosecutor, also for the benefit of the accused, may also submit a complaint against a court resolution.
(2) A complaint against a resolution on custody, protective treatment, and security detention may also be filed for the benefit of the accused by persons who were permitted to file an appeal for his benefit.
The court will also consider if a complaint was lodged in time and if there are grounds for a complaint.
Section 145 Grounds for a Complaint:
(1) A resolution may be challenged a) for any incorrectness in its verdict, or b) for the violation of provisions relating to the proceedings that preceded the resolution, if such a violation could result in incorrectness of any verdict of the resolution.
(2) A complaint may be based on new facts and evidence.
The complaint has a dilatory effect only if the law explicitly provides stipulates so (Sec 141 (4) of the CPC). There is no a dilatory effect as far as decision of seizure (freezing). On the other hand assets are confiscated or transferred only after a full force of the final decision of a court.
Under Sec 146a (1)(c-l) of the CPC a court shall generally decide about a complaint within five days from expiration of the time limit for filing a complaint for all entitled persons.
The appeal affects orders sent to another Member State if a judicial authority forward to another Member State a freezing order certificate. The freezing order is delivered to a person concerned once a judicial authority learns from an execution state that a freezing order has been executed.
Sec 460c of the CPC:
… The order shall be delivered to the person directly affected by the order for freezing property or evidence as late as the competent judicial authority of the executing State secures execution of this order in the executing State.
If a freezing order would be cancelled in a procedure about complaint, there is obligation of an issuing judicial authority to inform execution state.
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Section 460d:
The presiding judge and in pre-trial proceedings the public prosecutor, who issued the order for freezing property or evidence, is obliged to immediately notify the competent judicial authority of the executing State about cancelling the order.
If a judicial authority forwards to another Member State a MLA request, no domestic order is issued (if it is no required so by a requested state). The person directly affected by the order of requested states can complain only in a requested state.
Any decision about seizure has to be justified. If a person affected by a decision about a seizure brings new evidence that give reasons to limit the scope of a seizure or cancel it, a court that decides about such a complaint can limit or cancel such a decision on seizure.
If an appeal were to limit the scope of the order or invalidate it, there is an obligation to inform (anytime) requested/execution state about any change in a requesting/issuing state.
Both the accused (sentenced) person and the party concerned can see the files and lodge complaint or appeal against decision of a prosecutor or a court on seizure or confiscation/forfeiture. Both can be represented by a lawyer.
All decisions about seizure and confiscation have to be justified ñ any decision has to contain not only description of facts, what crime it is, a suspect (if he/she is known) but also a reasoning of the decision about seizure or confiscation. The reasoning has to be supported by facts gathered in a criminal file.
The decision about seizure is delivered the relevant institution (i.e. to a bank) and after that to persons whose thing or other asset value ware seized. These persons can lodge complaint against a decision about a seizure. Only a court can decide about complaint against decision about seizure even if it was issued in pre-trial proceedings.
The complaint against the decision on seizure has not a dilatory effect. The appeal against the court decision on confiscation of assets has dilatory effect and the assets are confiscated or transferred only after a full force of the final decision of a court.
4.1.1.3.6. Denmark The seizure order may be appealed against pursuant to the general rules set out in the Administration of Justice Act on appeals against orders in criminal cases. This means the lawyers have 14 days to decide whether or not to appeal the order.
Normally, the appeal of the seizure order does not suspend the seizure. However, in some cases the court decides that the appeal suspends the seizure. If so – Member State B will
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be informed about such suspension. The courts decide from case to case, whether the appeal should suspend the seizure (and only if the defendant’s lawyer requests the court to decide).
A confiscation ruling may be appealed against pursuant to the general rules set out in the Administration of Justice Act on appeals against judgments in criminal cases. This means the affecter person has 14 days to decide whether or not to appeal the confiscation order.
4.1.1.3.7. Estonia Every person has the right to appeal or obtain a review of the decision
Delays to appeal the decision or review the decision:
Pursuant to § 387 (1) and (2) of the Code of Criminal Procedure, an appeal against a ruling is filed with the court which made the contested court ruling within ten days as of the date when the person became or should have become aware of the contested court ruling, through the court which made the contested court ruling, with a court which is superior to the court which made the contested court.
Appeal can be filed against a court ruling for the confiscation of property. Pursuant to § 319 (1) of the Code of Criminal Procedure, the court, which issued the decision, shall be notified in writing of a wish to exercise the right of appeal within seven days as of the date of the decision. Pursuant to § 319 (2) of the Code of Criminal Procedure, an appeal against a court judgment shall be filed with the court which made the judgment in writing within fifteen days as of the date when the party to the court proceeding had the opportunity to examine the decision.
A cassation appeal can be filed in case of denying an appeal. Pursuant to § 345 (1) of the Code of Criminal Procedure, a circuit court shall be notified in writing of a wish to exercise the right of appeal in cassation within seven days after a court judgment or the conclusion thereof is pronounced or communicated through the court office. Pursuant to § 345 (2) of the Code of Criminal Procedure, an appeal in cassation shall be filed with the circuit court, which made the judgment in writing within thirty days as of the date when the party to the court proceeding had the opportunity to examine the judgment of the circuit court.
An appeal can be filed against a ruling made in confiscation proceedings: pursuant to § 387 (1) of the Code of Criminal Procedure, an appeal against a ruling shall be filed with the court which made the contested court ruling within ten days as of the date when the person became or should have become aware of the contested court ruling.
Guiding principles and fundamental rights taken into account in assessing the admissibility of appeals and availability of remedies: Page 347 of 477
§ 22 of the Constitution states: no one shall be presumed guilty of a criminal offence until a conviction by a court against him or her enters into force.
§ 24 of the Constitution states: Everyone has the right of appeal to a higher court against the judgment in his or her case pursuant to procedure provided by law.
Pursuant to § 392 of the Code of Criminal Procedure, a court, which receives an appeal against a court ruling, may suspend the execution of the contested ruling if the further execution of the ruling may result in grave and irreversible violation of the rights of the person.
Pursuant to § 410 (1) of the Code of Criminal Procedure a court judgment or ruling shall be enforced when it has entered into force unless otherwise provided by law. Pursuant to § 410 (2) of the Code of Criminal Procedure, if an appeal or appeal in cassation is filed against a court judgment with regard to only one of the accused persons, the court judgment shall not be enforced with regard to the other accused persons either before the entry into force of the judgment.
The appeal affects orders sent to another Member State, pursuant to § 50811 (3) of the Code of Criminal Procedure if a European freezing order issued for execution is annulled, the competent judicial authority of the requested state shall be notified thereof immediately.
Pursuant to § 50810 (2) of the Code of Criminal Procedure, a European freezing order issued to Estonia and the ruling of the competent judicial authority of the requesting state, which is the basis for the freezing order, cannot be contested in Estonia. If a person so requests, the Public Prosecutor's Office shall provide contact details, which allow the person to examine the procedure for contesting a European freezing order in the issuing state. Pursuant to § 50810 (3) of the Code of Criminal Procedure, filing of an appeal shall not suspend the execution of the contested order unless otherwise decided by the person resolving the dispute.
Pursuant to § 344 (21) of the Code of Criminal Procedure, a third party has the same right in cassation proceedings.
4.1.1.3.8. Finland First it must be noted that the principle of legality prescribed in Section 8 of the Finnish Constitution (731/1999) applies to freezing and confiscation orders. Generally Chapter 10 of the Penal Code fulfils this requirement. In addition, the principle of legality requires that penal legislation is precise. This also applies to legal rules concerning freezing and confiscation.
Section 3 of the EU Freezing Act contains provisions on appeal.
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According to Section 16 (appeal against execution of a freezing order) the person concerned by the freezing order can refer to the district court a decision of a prosecutor as referred to in Section 9(1) and 12(1). The district court shall deal with the matter without delay. When considering the matter the provisions of Section 9(2) of Chapter 1 and Section 13 of Chapter 4 of the Coercive Measures Act are also observed, where applicable. When the decision order is executed in the manner laid down for restraint on alienation and sequestration, execution acts of an execution officer can be appealed as provided in the Enforcement Code.
The following district courts have competence:
(1) The Helsinki District Court, if the property or evidence, which is the subject of the freezing order, is situated in the territorial ambit of the Helsinki Court of Appeal or the Kouvola Court of Appeal;
(2) The Oulu District Court, if the property or evidence, which is the subject of the freezing order, is situated in the territorial ambit of the Rovaniemi Court of Appeal;
(3) The Pirkanmaa District Court, if the property or evidence, which is the subject of the freezing order is situated in the territorial ambit of the Turku Court of Appeal or the Vaasa Court of Appeal;
(4) The Northern Savo District Court (Pohjois-Savon käräjäoikeus), if the property or evidence which is the subject of the freezing order is situated in the territorial ambit of the Court of Appeal of Eastern Finland.
Decisions of the district courts referred to in points 1 and 2 can be appealed to the court of appeals. Appealing does not prevent execution of the freezing order unless the court dealing with the matter orders otherwise.
According to Section 17 of the EU Freezing Act (examination of the substantive justifications) the substantive basis of a freezing order issued by a judicial authority of another member state cannot be examined in Finland. The competent prosecutor shall inform the person concerned on how the freezing order is appealed in the member state that issued the freezing order and shall give him/her the contact details of the authority of the issuing member state that can give additional information on appealing.
According to Section 18 of the EU Freezing Act (notifications to other member states in consequence of the appeal) the competent prosecutor shall inform the judicial authority of the issuing member state of the appeal and of the grounds of the claim. As a result, that member state can submit additional information to the prosecutor. The judicial authority issuing the freezing order shall be informed of the outcome of the appeal.
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What comes to coercive measures under Coercive Measures Act, Chapter 3 (restraint orders and freezing of property) of the Coercive Measures Act contains the provisions providing legal prerequisites and remedies for a person affected by such measure. In addition, Coercive Measures Act contains a provision on principle of proportionality (Coercive Measures Act, Chapter 7, Section 1 a) according to which the coercive measures used always needs to be proportionate to the aims pursued. The New Coercive Measures Act (New Coercive Measures Act, Chapter 1, Section 3) will also contain a provision on minimizing the harm according to which a coercive measures act may never entail unnecessary harm to individual affected by measure.
A request is to be sent to Court.
No delays are fixed for the appeal the decision or review the decision, if the Court does not issue a suspension of enforcement order.
An appeal does not affect orders sent to another Member State.
Under which circumstances would an appeal lead to invalidation or a limitation of the scope of an order to freeze and confiscate criminal assets?
If the requirements for an order are not met, an appeal would lead to an invalidation or a limitation of the scope of an order to freeze/confiscate criminal assets.
If an appeal were to limit the scope of the order or invalidate it, what would be the procedure followed in Member State A to update Member State B?
If an appeal were to limit the scope of the order or invalidate it, the prosecutor in charge shall inform authorities in Member State B without a delay.
Remedies for wrongful freeze/confiscation orders:
Claim for damages (civil procedure) or action against an official (criminal procedure).
4.1.1.3.9. France Every person has the right to appeal or obtain a review of the decision of the prosecutor or the examining magistrate on the decision of seizing the assets.
The appeal is formed (in the Member State of emission) in front of the Chamber of instruction of the Court of Appeal. Ways of appeal on the execution of the freezing decision is possible in the Member State of execution.
The appeal must be formed in 10 days following the notification of the decision of seizure.
The appeal against or a request to review a decision to freeze/confiscate criminal assets does not suspend its effect.
No delay is fixed by law for the decision on the appeal to be taken.
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Circumstances leading to the invalidation of an appeal:
- The forms of the transmission of the decision were not respected (absent or incomplete certificate).
- Motivations having based the decision are erroneous (the properties aimed by the decision of seizure are not the object/the product/the instrument or their value is disproportionate compared to the estimated value of the product of the breach)
If an appeal were to limit the scope of the order or invalidate it, the judicial authority of the State A has to inform the B state of the invalidation of the seizure and order the withdrawal
The appeal regarding the authorization of the seizure The order authorizing the seizure is notified to the public prosecutor, the owner of the confiscated asset and the third parties who have rights over the asset. These persons can lodge an appeal before the investigating chamber within ten days following the notification. The owner and the third parties may be heard by the investigating chamber. Nonetheless, the third parties cannot have a complete access to the details of the proceeding. The appeal against the seizure order does not suspend the execution of the order.
The appeal regarding the execution of the seizure The petition regarding the execution of the seizure should be addressed to the magistrate who has ordered the seizure. When the petition is not addressed to the public prosecutor, he has to give his opinion previously. If the magistrate decides to transform, to substantially modify the asset or to reduce its value, the decision has to be authorized by the magistrate for custody and release (le Juge des libertés et de la détention) at the request of the public prosecutor who ordered the seizure.
The applicant and the public prosecutor can lodge an appeal before the investigating chamber within ten days following the notification of the decision. In this case, the appeal suspends the execution of the new order. Consequently, the initial decision is still producing its effect.
The appeal regarding the confiscation order Regarding the confiscation order, as the confiscation is a criminal penalty pronounced by a criminal court, the convicted person would have to appeal the decision under the usual
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rules applicable in criminal procedure. However, if the confiscation is not the only penalty for which the concerned person has been sentenced to, the convicted person cannot appeal against the confiscation penalty alone.
4.1.1.3.10. Germany Every person can appeal the provisional measures and/or the final decisions in accordance with the general law of criminal procedure, as modified by the particularities of the governing MLA schemes (such the principle of mutual recognition between Member States).
Guiding principles and fundamental rights taken into account in assessing the admissibility of appeals and availability of remedies320:
An appeal against or a request to review a decision to freeze or confiscate criminal assets will not automatically suspend the freezing, confiscation or transfer of assets.
If an appeal were to limit the scope of the order or invalidate it, the other Member State will be notified using the applicable channels and will, if appropriate, be requested to lift measures.
According to section 111 e (2) of the Code of Criminal Procedure the person concerned by the order of seizure or attachment may apply for a court decision at any time.
In respect of measures taken in the course of enforcing the seizure or attachment the person concerned may also apply for a decision of the court at any time (section 111f (5) of the Code of Criminal Procedure). The success of the remedy cannot be considered in general. It depends on a case-by-case review and will take a few days or weeks, dependent on the volume and the complexity of the case. Statistical data are not available.
Before a provisional order the person concerned need not to be heard. The order is notified to the person concerned by execution of confiscation in exigent circumstances. A specific declaration is not necessary. But the person concerned shall be instructed to his or hers rights in accordance with section 98 (2) 7TH sentence of the Code of Criminal Procedure.
If a provisional confiscation measure is ordered by the court before the final judgement is passed, the person concerned has to be informed about the order before its execution. The person can lodge a complaint in accordance with section 304 of the Code of Criminal Procedure.
320 See also pages 60, 64 of the EVALUATION REPORT ON THE FIFTH ROUND OF MUTUAL EVALUATIONS "FINANCIAL CRIME AND FINANCIAL INVESTIGATIONS" REPORT ON GERMANY and the decision “Council Doc. 16269/2/11 REV 2 GENVAL 114, 19 January 2012”
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When the final judgment is given the convicted person cannot appeal the confiscation order within the judgement exclusively but the judgement on the whole.
If a foreign confiscation order is to be executed the country court decides about its enforceability. According to section 55 AICCM the convicted person among others may appeal the order within one week.
If a freezing or confiscation order was wrongful and the order has caused damage to the person concerned it has to be compensated in accordance with the Law on Compensation for Wrongful Prosecution (“Gesetz über die Entschädigung für Strafverfolgungsmaßnahmen”). Compensation means that the person concerned gets full substitution for the financial damage.
4.1.1.3.11. Greece Every person has the right to appeal or obtain a review of the decision.
The person files an application/appeal before the secretariat of the competent authority.
Regarding the freezing order, it is twenty days from the serving of the order. The submission of the application and the relevant time limit does not suspend the enforcement of the order.
Regarding the confiscation order, the delay to appeal the decision is ten days from publication of the relevant decision. If the person that has the right to appeal was not present at the publication of the decision and he/she lives abroad or is of unknown residence, the delay is thirty days from the serving of the decision.
The delay to appeal on points of law before the Supreme Court is twenty days from the inclusion of the final text of the decision in the special book kept for this reason at the court secretariat.
The submission of an appeal against the freezing order and the relevant time limit do not suspend the enforcement of the order.
The time limit to file an appeal does not suspend the enforcement of a confiscation order. The filing of an appeal may suspend the enforcement, if the court does not decide otherwise.
Neither the time limit nor the filing of an appeal on points of law before the Supreme Court suspends the enforcement of a confiscation order.
There are no delays for the decision on the appeal to be taken.
The appeal affects orders sent to another Member State, in so far as its filing may involve suspension of the enforcement of the order, and its acceptance may lead to the invalidation of the order.
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The appeal would need to be accepted, meaning that the formal and substantial requirements for its acceptance would need to be fulfilled.
If an appeal were to limit the scope of the order or invalidate it, the decision would be transmitted to the competent Public Prosecutor of the Court of Appeal, who would formally inform the authorities of Member State B. a.Freezing.
With respect to the freezing order art. 48 (4) of the L. 3691/2008 provides that the accused, the person suspected of committing the offences of laundering money as well as the predicate offences referred in article 3 (see above under 1.1. p. ) and third parties have a right to demand the revocation of the investigating judge’s order or of the judicial council’s indictment by an application addressed to the competent judicial council and filed with the investigating judge or the public prosecutor within 20 days from service of the order or indictment. The investigating judge’s order or of the judicial council’s indictment are revoked only if new evidence emerge that can justify the lifting of the freezing order. The decision on the appeal can be taken ex parte.
Appeal against the indictment deciding on the revocation or not of the investigating judge’s order or of the judicial council’s indictment should be filed with judicial council of appeals which decides finally for the preservation or not of the freezing. The right of appeal is open to the person suspected of committing the offences, third parties and the public prosecutor.
The submission of the application and the relevant time limit does not suspend the enforcement of the order.
b. Confiscation
With respect to the confiscation order, the perpetrator has a right to appeal the relevant part of the court judgment, on both points of fact and law, in accordance with Arts 310(2), 373, 492 and 504(3) of the Code of Criminal Procedure.
The confiscation order is pronounced publicly at the court hearing, and is served to the affected person if he/she is absent during the trial.
Regarding the confiscation order, the delay to appeal the decision is ten days from publication of the relevant decision. If the person that has the right to appeal was not present at the publication of the decision and he/she lives abroad or is of unknown residence, the delay is thirty days from the serving of the decision. The decision on the appeal can be taken ex parte.
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The delay to appeal on points of law before the Supreme Court is twenty days from the inclusion of the final text of the decision in the special book kept for this reason at the court secretariat.
The time limit to file an appeal does not suspend the enforcement of a confiscation order. The filing of an appeal may suspend the enforcement, if the court does not decide otherwise. In case that the appeal meets the formal and substantial requirements for its acceptance the order to freeze and confiscate criminal assets either is limited or is lifted. Then if the order had been transmitted to another member state the competent public prosecutor of the court of appeal should inform the authorities of the other Member State.
Neither the time limit nor the filing of an appeal on points of law before the Supreme Court suspends the enforcement of a confiscation order.
The Greek law does not provide delays for the decision on the appeal or review that have to be taken. c. Guiding principles taken into account in assessing the admissibility of appeals.
The proportionality principle based on art 2 (1) of Greek Constitution should be applied in the enforcement of the freezing and confiscation of criminal assets. This means that the person whose property has been confiscated can argue that the confiscation as an accessory penalty should be considered as onerous in relation with the offence e.g. the court of appeal could judge that the confiscation of the vehicle transferring a small quantity of smuggled cigarettes violates the proportionality principle. Furthermore the proportionality principle guarantees the hierarchical relation between the principle penalty and the confiscation. In other words the latter should always be less onerous than the former. The same principle is applied in case of the confiscation as a security measure. So, the Court of appeal should estimate if the criminal assets are truly dangerous for the public order. The quality of the danger should be judged in accordance with the proportionality principle.
The violation of the proportionality principle or if new evidence are proved after filing the appeal may lead to the invalidation of the freezing or confiscation order transmitted in another member state which is informed by the Public Prosecutor of the Court of Appeal.
In Greece there is no systemic law network fixing the cooperation with member states on the freezing and the confiscation of criminal assets.
4.1.1.3.12. Hungary Appealing the decision on freezing is possible (freezing can be ordered by the court, the prosecutor or the investigating authority) Page 355 of 477
Article 195 of the Criminal Procedure Act
(1) Anyone directly affected by the decision of the prosecutor or the investigating authority on the refusal of the complaint, disregarding, suspending or terminating the investigation, ordering coercive measures, restricting further financial rights and interests or establishing financial obligations (e.g.: ordering the freezing) may lodge an appeal against it within eight days following its communication.
(3) Unless an exception is provided for in this Act, the appeal shall have no suspensory effect. Exceptionally, the prosecutor or the investigating authority making the decision or judging on appeal may suspend the execution of the decision until the appeal is decided.
(4) If the prosecutor or the investigating authority adopting the decision does not sustain the appeal within three days, it is obliged to refer it without delay to the party who is entitled to judge it. The superior prosecutor shall decide on appeal against the decision of the prosecutor.
Article 326 of the Criminal Procedure Act
If the court of first instance communicates the non-decisive ruling (note: the court orders the freezing in a non-decisive ruling) by way of an announcement, the appeal shall be announced at the time when the ruling is being announced. Otherwise the provisions set forth in Article 325 Paragraph (2)-(4) shall govern the announcement of appeals against a non-decisive ruling.
In accordance with these above-mentioned Paragraphs, a non-decisive ruling communicated by way of delivery may be appealed within eight days. If the appeal is not made at the time of the announcement, it shall be either submitted to the court of first instance in writing, by way fax or computer system or through recording in the minutes.
Appealing the decision on confiscation
Confiscation is a kind of measure according to the Hungarian national law, which shall be ordered by the court decision.
The provisions set forth in Article 325 Paragraph (1)-(3) of the Criminal Procedure Act govern appeals against decisions.
Section 325
(1) Those to whom the court of first instance communicates the judgment by way of an announcement can submit their appeal immediately, or may request a three-day deadline. No justification can be submitted for missing this deadline.
(2) Judgments communicated by way of delivery may be appealed within eight days. Page 356 of 477
(3) If the appeal is not made at the time of the announcement, it shall be either submitted to the court of first instance in writing, by fax or computer system or through recording in the minutes.
Guiding principles and fundamental rights taken into account in assessing the admissibility of appeals and availability of remedies:
If the decision on freezing is made by the prosecutor or the investigating authority, Article 195 Paragraph (1) of the Criminal Procedure Act shall apply. For the text of this provision, please see the answer 5.1.6.
If the decision on freezing is made by the court, Article 347 Paragraph (1) of the Criminal Procedure Act shall apply, according to which the non-decisive ruling of the court of first instance may be appealed, unless prohibited by this Act.
The decision on confiscation is included in the judgment. According to Article 324 of Criminal Procedure Act, the following parties shall be entitled to submit an appeal against the judgment of the court of first instance: a) the accused, b) the prosecutor, c) the substitute private accuser, d) the defence counsel – even without the consent of the accused, e) the heir of the accused, against the provision granting a civil claim, f) the legal representative, the spouse or common-law spouse of an accused of legal age – even without the consent of the accused – against ordering involuntary treatment in a mental institution, g) a private party, against a provision adjudicating the civil claim in its merit, h) a person affected by a decision.
For further rules on the announcement of the appeal against the judgment, please see Article 325 (1)-(3) of the Criminal Procedure Act in answer 5.1.6.
According to Article 341 Paragraph (1) of the Criminal Procedure Act, appeals not permitted by law or submitted by a non-authorised person or belated shall be rejected by the court of first instance. No further legal remedy shall apply to a ruling rejecting an appeal not permitted by law or submitted by a non-authorised person.
Does an appeal against or a request to review a decision to freeze or confiscate criminal assets suspend the freezing, confiscation or transfer or assets?
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The question is regulated by Article 195 Paragraph (3), Article 347 Paragraph (3) and Article 346 Paragraph (4) of the Criminal procedure Act.
According to Article 347 Paragraph (3):
(3) The ruling may be enforced regardless of an appeal, unless this Act stipulates that the appeal has a suspensory effect. In exceptionally justified cases, both the court of first instance and the court of second instance may suspend the enforcement of the ruling.
According to Article 346 Paragraph (1) and (4):
(1) The judgement of the court of first instance may be appealed at the court of second instance. The appeal against the decisive ruling of the court of first instance shall be governed by the rules of the appeal against a judgement.
(4) The appeal suspends the decision.
Appealing the decision on freezing a) According to Section 195, anyone directly affected by the decision of the prosecutor or the investigating authority on establishing financial obligations (e.g. ordering freezing) may protest it within eight days. If the authority adopting the decision does not sustain the protest, it is obliged to refer it to the authority that is entitled to judge it. The protest against the decision of the investigating authority shall be judged by the prosecutor, the protest against the decision of the prosecutor shall be judged by the superior prosecutor. In exceptionally justified cases, the authority making the decision or judging the protest may suspend its execution. b) Section 347 states that the non-decisive ruling of the court of first instance (i.e. the court ordering the freezing) may be appealed, unless prohibited by the CPA itself. If the court of first instance communicates the non-decisive ruling by way of an announcement, the appeal can only be put forward at the time when the ruling is being announced. A ruling communicated by way of delivery may be appealed within eight days (Section 326), but it may be enforced regardless, except if the CPA gives the appeal a suspensory effect. In exceptional and justified cases, the court may suspend the enforcement (Section 347).
If the protest or appeal is successful, the authority shall cancel the freezing and order a refund with interest for the proprietor.
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4.1.1.3.13. Ireland Defendants have a right of appeal to the Court of Criminal Appeal if a confiscation order is granted.
The Court can find for the defendants on the balance of probabilities in relation to any freezing or confiscation application. The High Court may vary or discharge an order made by any person affected by it.
Central Authority has no information on the delays to appeal the decision or review the decision.
Guiding principles and fundamental rights taken into account in assessing the admissibility of appeals and availability of remedies:
Outgoing freezing orders in Ireland have to be accompanied by a certificate signed by the Court which sets out the legal remedies against the freezing order for interested parties, including bona fide third parties available in Ireland In relation to outgoing confiscation orders the certificate shall state that the prescribed time for lodging an appeal has expired, as well as a copy of the confiscation order. The Central Authority will also transmit a document signed by the DPP that the confiscation order is still in force, and has not been satisfied, that the Defendant appeared and was represented at the confiscation inquiry, and details of notification of the proceedings to him if he was not present. We have not sought to enforce any confiscation orders in designated states.
Primary function of Central Authority is execution of incoming requests. As regards outgoing requests, the Authority’s main function is to transmit the order to requested state. Central Authority has no function in matters giving rise to original domestic proceedings or investigation. It should be noted that the Irish Central Authority is not part of police or prosecution service.
An appeal against or a request to review a decision to freeze/confiscate criminal assets does not suspend the freezing/confiscation or transfer of assets but Court can vary order.
An appeal affects orders sent to another Member State only if Court varies order.
If an appeal were to limit the scope of the order or invalidate it, Central Authority would inform the other Member State.
4.1.1.3.14. Italy Pursuant to Articles. 582 and 583 Code of Criminal Procedure, the appeal against the measures in the field of preventive measures should be submitted first to the judge who issued the warrant.
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Appeals against this decision may be made to the Court of Appeal. The decision of the Court of Appeal may itself be appealed to the Court of Cassation "for violation of the law", within the period of ten days of communication or service of the notice of filing of the decision.
The appeals do not suspend the effect of the freezing order.
4.1.1.3.15. Latvia
Under Section 15 of the Criminal Procedure Code titled Rights to the Adjudication of a Matter in Court, each person has a right to the adjudication of a matter in a fair, objective, and independent court.
In pre-trial proceedings, an attachment may be imposed on property based on the decision of the person directing the proceedings provided this is approved by the investigating judge. The decision to confiscate is taken by the court. All court decision can be appealed in accordance with the Criminal Procedure Law.
Section 550. Terms for the Submission of an Appellate Complaint and Protest
(1) An appellate complaint or protest shall be submitted not later than within 10 days or, if the court has extended the term for appeal, not later than within 20 days after the day when a full court adjudication became available.
(2) After a specific term, a judge may refuse to accept a submitted appellate complaint or protest with a decision that may be written in the manner of a resolution, if the submitter has not requested the renewal of the term. The submitter shall be notified regarding the taken decision, but the submitted complaint or protest shall be appended to the case.
(3) A decision of a judge with which the acceptance of an appellate complaint or protest has been refused may be appealed within 10 days in a court of appeals, whose decision shall not be subject to appeal.
Section 551. Content of an Appellate Complaint and Protest
(1) The following shall be indicated in an appellate complaint or protest:
1) the court adjudication regarding which the complaint or protest is being submitted;
2) the amount in which the adjudication is being appealed or protested;
3) the way in which the error in the adjudication has been expressed; Page 360 of 477
4) evidence that must be examined in a court of appeals;
5) whether new evidence is being submitted, what new evidence is being submitted, regarding which circumstances, and why such evidence was not submitted or examined in a court of first instance;
6) the request of the submitter;
7) a list of the documents appended to the complaint or protest.
(2) An appellate complaint or protest shall be signed by the submitter thereof.
(3) An appellate complaint or protest shall indicate the given name, surname, and address of the person the interrogation of whom in a court of appeals the submitter of the complaint or protest requests, as well as whether a defence counsel will be necessary in the court of appeals, and whether or not the court must invite for such defence counsel.
(4) A victim and his or her representatives may not request more in an appellate complaint than what he or she had requested in adjudication in a court of first instance.
(5) A public prosecutor has a duty to submit a protest regarding an unlawful or unjustified court adjudication. However, a public prosecutor who has participated in a court of first instance is entitled to submit a protest only regarding judgments in which the court has not taken into account his or her views in the trial of the case, or also has allowed violations that he or she was unable to prevent in the course of the trial of the case. Such restrictions do not apply to higher-ranking public prosecutors.
Section 552. Procedures for the Submission of an Appellate Complaint and Protest
(1) An appellate complaint or protest shall be addressed to a court that is one level higher – a court of appeals.
(2) An appellate complaint or protest shall be submitted to the court that rendered the adjudication.
Section 553. Leaving an Appellate Complaint and Protest Without Advancement or Adjudication
(1) If an appellate complaint or protest does not comply with the requirements of Section 551, Paragraphs one, two and three of CPL, a judge shall take a decision on leaving of an appellate complaint or protest without advancement, indicating the deficiencies of the
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complaint or protest, and shall determine 10 days for the submitter to eliminate the deficiencies. The decision shall not be subject to appeal.
(2) If a submitter does not eliminate deficiencies within the specified term, a judge shall take a decision on leaving of the appellate complaint or protest without adjudication notifying the recipient thereof. This decision may be appealed within 10 days in a court of appeals the decision of which shall not be subject to appeal.
Section 554. Consequences of the Submission of an Appellate Complaint and Protest
(1) The submission of an appellate complaint or protest shall suspend the entering into effect of a judgment in relation to all the accused in such case.
(2) The submission of an appellate complaint or protest regarding a court judgment of acquittal shall not suspend the entering into effect of a judgment in the part regarding the releasing of an accused from arrest, house arrest, or a social correctional educational institution.
Section 555.
After the end of the term for the submission of an appellate complaint or protest, the court that rendered the judgment shall send the case to a court of appeals, and shall send a copy of the submitted appellate complaint or protest to the persons whose interests and rights have been infringed upon by the appellate complaint or protest, and shall also inform such persons regarding the sending of the case to the court of appeals.
Persons whose interests and rights have been infringed upon by an appellate complaint or protest have the right, until the day when the case will be adjudicated in a court of appeals, submit their written objections against an appellate complaint or protest and explanations regarding such objections. Objections to an appellate complaint or protests and explanations regarding such objects shall be appended to the case.
Persons who have submitted an appellate complaint or protest are entitled to submit additions to the complaint or protest to a court of appeals not later than within 10 days after the end of the appeal term, yet such persons shall not be permitted to modify the essence of the initial request.
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Section 556. Withdrawal of Appellate Complaints or Protests
(1) A person who has submitted an appellate complaint or protest is entitled to withdraw his or her complaint or protest up to the moment when a court of appeals retires to deliberate for the rendering of an adjudication.
The court of first instance together with a criminal case the received withdrawal of an appellate complaint shall send to a court of appeals. If a withdrawal of an appellate protest is received, a court of first instance may take a decision on termination of court proceedings.
The court of appeals or the judge of the court of appeals shall, upon the receipt of withdrawal of an appellate complaint or protest, take a decision on termination of court proceedings. If the court proceedings are terminated, the submitter of a complaint or protest, as well as the persons whose interests or rights the withdrawn complaint or protest has infringed shall be notified thereof. The court shall notify regarding the taken decision the persons who submitted the appellate complaint or protest. If a complaint or protest is withdrawn in writing, a decision may be taken in a manner of resolution.
The decision on termination of court proceedings shall not be subject to appeal.
A case shall be tried in a court of first instance by a panel of three judges, of whom one is the chairperson of the court session.
A public prosecutor, the persons who have appealed a court judgment, the persons in relation to whom a court judgment has been appealed or protested, and the defence counsel and representatives thereof shall be summoned to a session of a court of appeals.
4.1.1.3.16. Lithuania The persons whose property is subject to the temporal limitation of the ownership rights have a right to appeal the decision on imposing this kind of procedural measure of constraint following the order prescribed by the CCP.
A person whose property is subject to a temporal limitation of the ownership rights shall be entitled to appeal against the resolution of a prosecutor to the pre-trial investigation judge.
The investigating judge must examine such an appeal within seven days from the receipt of the appeal. The resolution of the investigating judge may be appealed against to a higher court. The resolution of the higher court shall be final and not subject to appeal (Art 151 Part 5 of the CCP).
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Appeals against the prosecutor’s decisions may be lodged during the whole course of the pre-trial investigation (Art 64 Part 1 of the CCP).
The examination of an appeal on the decision to impose temporal limitations of ownership shall comply with the general requirements; the CCP does not foresee any special requirements that would be applied only to the appeals on the prosecutor’s resolution to impose temporal limitation of the ownership rights.
The appeal against or a request to review the decision to freeze or confiscate criminal assets does not suspend the freezing, confiscation or transfer of assets.
The appeal does not affect orders sent to another Member State
Upon the establishment that the prosecutor’s decision is unlawful and ungrounded and that the procedural measure of constraint – temporal limitation of the ownership rights has been imposed in the absence of any of the grounds set forth in Art 151 Part 1 of the CCP (The decision to impose temporal limitation of the ownership rights may be recognized unlawful and ungrounded if it contradicts its intended goal set forth in Art 151 Part 1).
The EU Member State, who is executing the Order to freeze Property or Evidence shall be informed immediately about the decision made.
4.1.1.3.17. Luxembourg Seizing orders
The interested parties who hold seized accounts or are beneficial owner of these accounts can either (i) contest the formal regularity of the acts of the investigating magistrate or (ii) ask for the seized goods to be handed back to them.
(i) Any decision of an investigation magistrate such as a seizing order can be objected to by the defendant or an interested party under the provisions of article 126 of code d’instruction criminelle within 5 days of the knowledge of the decision. The chambre du conseil, which is a specialised jurisdiction at the district court, is competent to deal with these claims. If the decision of the investigating magistrate is cancelled because of a formal mistake the seizure resulting of the void act is void as well. ii) At any stage of a procedure the defendant or an interested party may request the competent jurisdiction to order the seized goods to be handed back under the provisions of article 68 of the code “d’instruction criminelle”. The seized property shall not be handed back if it is necessary as evidence, potentially harmful to persons or property or if the property might be confiscated.
Confiscation orders
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The judgment ordering the confiscation can be appealed by any decision of a jurisdiction of first instance within 40 days of the judgment if it is contradictory or within 40 days of the notification to the parties not being represented at the trial.
What are the guiding principles and fundamental rights taken into account in assessing the admissibility of appeals and availability of remedies?
No restrictions on fundamental rights in assessing the admissibility of appeals and availability of remedies.
An appeal against or a request to review a decision to freeze/confiscate criminal assets does not suspend the freezing/confiscation or transfer of assets as long as a decision of first instance is not definitive the property remains seized under the decision of the investigation magistrate.
No delays taken applied for the decision on the appeal to be taken.
The appeal affects the orders sent to the other Member State indirectly. The definitive decision substitutes to the provisional seizing order but must be enforced in the other State Member.
An appeal would lead to invalidation if the seized property is not a crime related or equivalent to proceeds of crime
4.1.1.3.18. Malta Every person has the right to appeal or obtain a review of the decision in the case of confiscation order. But not in the case of a freezing order.
There is no procedure in place for appealing the decision or obtaining a review of the decision with respect to freezing orders.
With reference to confiscation orders, sub-article 1B to article 23B holds that article 7 of the Money Laundering Act shall mutatis mutandis apply to the Criminal Code.
Article 7 of the said Act provides the special court proceedings in the event that following an order for the forfeiture or confiscation as per article 23B(1A) above, the person convicted or any other person interested may file an action before the Civil Court, First Hall, to prove that the proceeds or property in question were superfluous to the offence. The action in question must be brought before the Court within three months from the date of the definite judgment.
Article 7(3) holds that the ‘the applicant shall attach to the application all such documents in support of his claim as it may be in his power to produce and shall indicate in his application the names of all the witnesses he intends to produce. The emphasis on expediency of this procedure is evident in sub-article 4, which states that ‘the court shall,
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without delay, set down the application for hearing at an early date, which date shall in no case be later than thirty days from the date of the filing of the application’.
Once this is done, both the application and the notice of the date of hearing shall be served on the Commissioner of Police without delay. The Commissioner of Police must in turn file his reply within fifteen days from service.
The Court must decide on the case within twenty days from the first date of the hearing. There shall be no adjournment to be granted, except with the consent of both parties or for exceptional reasons, to be recorded by the court. Sub-article 6 goes on to state that ‘such adjourned date shall not be later than that justified by any such reason’.
With respect to the procedure relating to these proceedings, the provisions of the Code of Organization and Civil Procedure, with respect to proceedings before the Civil Court, First Hall, are to apply.
Article 7(8) holds that ‘any decision revoking the forfeiture of immovable property shall be deemed to transfer the title of such property back from the Government to the party in favour of whom it is given, and such party may obtain the registration of such transfer in the Public Registry’.
Article 8 of the same Act holds that in the case where the Court accepts the demand, the property shall cease to be forfeited and shall revert to the applicant upon the judgment becoming definite. The applicant shall also be entitled to the recovery of the income received by the Government from such property during the period of forfeiture.
An appeal against an order to confiscate does not impede the process for the confiscation of the assets.
As stated above, the action to appeal the confiscation order must take place within 3 months of the date of the final judgment. The application is to be served on the Commissioner of Police, who in turn shall have 15 days within which to reply. The Court shall decide on the case within a period of 20 days, which is to start running from the date of the first hearing.
The scope of the appeal process is limited by virtue of the wording of the law, which holds that the person convicted or any interested third party may bring an action for a declaration that any or all of the movable or immovable property so forfeited is not profits or proceeds from the commission of an offence under article 3 or is otherwise involved in the offence of money laundering, nor property acquired or obtained, directly or indirectly, by or through any such profits or proceeds.
Therefore, the court will only invalidate or limit the order if it accepts the pleas of the appellant.
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Remedies and safeguards of persons in another Member State against the orders to freeze/confiscate the assets emanating from the Member State:
Article 11 of the rules relating to the execution of a confiscation order within the EU, holds that no action can be brought before the Maltese courts challenging the substantial reasons accounting for the issue of a confiscation order.
However, the procedure contemplated in the law provides that once the AG receives a request by the foreign authority to enforce a confiscation order made by a foreign competent court, the AG may bring an action in the First Hall Civil Court to enforce that said order.
Following this, the application will be served on the person whose property the confiscation order purports to, and such person shall have 15 days to file his reply. Therefore, the respondent shall have the opportunity to contest such order in Court.
In the event of a unfavourable result, the individual would have the opportunity to appeal from such decision of the Court, by virtue of the ordinary appeal procedure.
Generally speaking, Maltese law provides for several remedies in view of wrongful judgment. These are the Court of Criminal Appeal, the Constitutional Court (original jurisdiction and appellate jurisdiction), and the European Court of Human Rights. The procedure of appeal or reference to the said Court applies to offences of any nature, without distinction.
Remedies in view of orders issued by the Courts
With respect to the issuing a freezing order, the Criminal Code provides for a remedy under article 23A(5). This provision holds that the person charged may within three working days from the date of the making of the order apply to the Criminal Court for the revocation of the order, provided that the order shall remain in force unless revoked by the Criminal Court.
With particular reference to confiscation orders, sub-article 1B to article 23B holds that article 7 of the Money Laundering Act shall mutatis mutandis apply to the Criminal Code.
Article 7 of the said Act provides for special court proceedings in the event that following an order for the forfeiture or confiscation as per article 23B(1A) above, the person convicted or any other person interested files an action before the Civil Court, First Hall, to prove that the proceeds or property in question were superfluous to the offence. The action in question must be brought before the Court within three months from the date of the definite judgment.
Article 7(3) holds that the ‘the applicant shall attach to the application all such documents in support of his claim as it may be in his power to produce and shall indicate Page 367 of 477
in his application the names of all the witnesses he intends to produce, stating in respect of each the proof which he intends to make’. The emphasis on expediency of this procedure is evident in sub-article 4, which states that ‘the court shall, without delay, set down the application for hearing at an early date, which date shall in no case be later than thirty days from the date of the filing of the application’.
Once this is done, both the application and the notice of the date of hearing shall be served on the Commissioner of Police without delay. The Commissioner of Police must in turn file his reply within fifteen days from service.321
The Court must decide on the case within twenty days from the first date of the hearing. There shall be no adjournment to be granted, except with the consent of both parties or for exceptional reasons, to be recorded by the court. Sub-article 6 goes on to state that ‘such adjourned date shall not be later than that justified by any such reason’.
With respect to the procedure relating to these proceedings, the provisions of the Code of Organization and Civil Procedure, with respect to proceedings before the Civil Court, First Hall, are to apply.
Article 7(8) holds that ‘any decision revoking the forfeiture of immovable property shall be deemed to transfer the title of such property back from the Government to the party in favour of whom it is given, and such party may obtain the registration of such transfer in the Public Registry’.
Article 8 of the same Act holds that in the case where the Court accepts the demand, the property shall cease to be forfeited and shall revert to the applicant upon the judgment becoming definite. The applicant shall also be entitled to the recovery of the income received by the Government from such property during the period of forfeiture.
In addition, article 22C of the DDO refers to the special court proceedings following an order for the forfeiture or confiscation as per article 22(3A)(d) of the DDO. This remedy is possible in relation to the confiscation of criminal assets upon conviction of a money- laundering offence against the PMLA or a drug offence against the drug laws (DDO and MKPO). The PMLA makes a direct reference to article 22(3A)(b) and (d) of the DDO, which shall apply mutatis mutandis to the provisions of the PMLA. The remedy is in view of the request made by the prosecution for a confiscation order to be made by the Court under article 22(3A) of the DDO, (and the analogous provision of the MKPO) of all moneys or other movable property, and of the entire immovable property of the person so found guilty even if the immovable property has since the offender was charged passed into the
321 Article 7(5).
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hands of third parties, and even if the said monies, movable property or immovable property are situated in any place outside Malta. The Court shall accede to this request and shall order such forfeiture without distinction between the assets of the accused, as to which are a result of the offence and which aren’t. The law contemplates a remedy to this end. The person convicted or the third party mentioned in the order, may file an action before the Civil Court, First Hall, to prove that the proceeds or property in question were superfluous to the offence. The action in question must be brought before the Court within three months from the date of the definite judgment. The same conditions relating to the provisions of the PMLA mentioned above are the same as those applying to these special court proceedings.
It is important to note that an appeal against an order to confiscate does not impede the process for the confiscation of the assets.
When the Maltese authorities receive a request from a foreign authority to execute a confiscation order in Malta, Article 11 of the SL 15/09 relating to the execution of a confiscation order within the EU, holds that no action can be brought before the Maltese courts challenging the substantial reasons accounting for the issue of a confiscation order.
However, the procedure contemplated in the law provides that once the AG receives a request by the foreign authority to enforce a confiscation order made by a foreign competent court, the AG may bring an action in the First Hall Civil Court to enforce that said order.
Following this, the application will be served on the person whose property the confiscation order purports to, and such person shall have 15 days to file his reply. Therefore, the respondent shall have the opportunity to contest such order in Court. In the event of an unfavourable result, the individual would have the opportunity to appeal from such decision of the Court, by virtue of the ordinary appeal procedure.
4.1.1.3.19. Netherlands Every person has the right to appeal or obtain a review of the decision of the prosecutor or the examining magistrate on the decision of seizing the assets (art. 552a Code of Criminal Procedure)
They also have the possibility to appeal against the decision on confiscation.
To appeal the decision or obtain a review of the decision, they can start a procedure with the court.
Appeal is possible against the decision by the court of first instance and the court of appeal who decided on the confiscation order. The appeal against the seizure is possible for everyone who has an interest in the seized assets. Finally, it is possible to start a
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procedure after the decision became irrevocable in those cases the person obliged to pay the order is not capable of paying the order. He can then ask the court to lower the amount het needs to pay to the state.
An appeal against or a request to review a decision to freeze/confiscate assets does not suspend the freezing/confiscation or transfer of assets, but usually the selling of the seized assets before there is a irrevocable decision is postponed.
The Dutch law does not have a fixed term for the decision on the appeal to be taken.
4.1.1.3.20. Poland The article 11 of the framework decision 2003/577/JHA obliges the MS to introduce remedies in relation to freezing orders. The article 589j CCP stipulates, that the decision on freezing issued by a public prosecutor may be appealed to a regional court. If the decision was taken by a court, an interlocutory appeal can be lodged with the upper court. The deadline for an interlocutory appeal is 7 days. There is no time limit for the court of appeal to make its decision. Filling the interlocutory appeal do not suspend freezing but the court may decide on suspension (article 462 § 1). The remedies allow for the cancellation of freezing and confiscation orders. There are no case reported concerning remedies. The most important grounds for remedies are breach of substantive law, breach of procedural law or mistake as to the facts (see art. 438 CCP).
In the event the order on retention of evidence or securing the property has been reversed, the competent court or the state prosecutor shall inform the competent agency of the European Union Member State about its contents without delay (article 589i CCP).
In case a Polish judicial authority is executing a freezing order issued by other MS, the decision to execute the freezing order may be appealed by the persons whose rights were violated. The persons may also appeal the procedural acts related to securing of the property, which does not limit the rights of the persons under the law of the issuing state. In the appeal against the procedural acts the appellant may only request verification of the regularity of the acts (art. 589n § 3). From this regulation it is visible, that the persons claiming violation of their rights may appeal the material grounds of issuing the freezing order only in the issuing state. This is a solution typical for mutual recognition mechanisms. The decision on freezing property is send to the persons involved with an information about the rights under the law of the issuing state (art. 589n § 2).
It is questionable whether Poland has implemented the provisions of the article 11 (4) and (5) of the framework decision 2003/577/JHA which were meant to make the right to legal remedy effective. The only facilitation in the meaning of the article 11 (4) is by providing an information about the rights in the issuing state.
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Polish implementation of framework decision 2003/577/JHA provides that if under the law of the executing state, the state is responsible for a damage done in relation to the execution of a confiscation order issued by a Polish court, at a request of competent court or other authority of state, the Polish State Treasure pays back the financial amount equivalent to the damages paid. This provision is not applied if the damage occurred as an exclusive result of action or omission of the authority of the executing state (art. 589k). If the State Treasure is responsible for a damage caused in relation to execution of confiscation order issued by a judicial authority of the issuing state, the State Treasure send a request for paying back the amount equivalent to damages (art. 589u). In case of wrongful decision adopted in Poland, it is possible to claim return of the object or compensation on the base of the domestic civil law.
The decision to request another MS for execution of a confiscation order cannot be appealed (art. 611fs). On the contrary, an appeal against the decision on execution of a foreign confiscation order in Poland may be filed by the parties of the proceedings and a third party, whose rights may be breached by the execution of order (art. 611 fx § 2 CCP). The same subjects may also appeal the decision of the court to suspend the proceedings for execution of the order (art. 611fy § 2). The legal remedy shall be filed within 7 days.
In the event the decision has been reversed as a result of cassation or re-opening of the proceedings, remission of the penalty, limitation of the penalty execution or in the event of occurrence of other circumstances resulting in the impossibility of execution of the decision referred to in Article 611fn § 1, the court shall immediately inform the competent court or other agency of the decision executing state (article 611fr § 1 CCP).
In case of freezing in domestic proceedings, the decision is taken by a public prosecutor or by court (the session is without audience). The decision describes the extent and the mean of freezing and includes reasons. The decision is sent to the parties and can be appealed by them (decision taken by a public prosecutor is appealed to a court) within 7 days. Freezing may be maintained up to the final judgment ordering forfeiture. If the forfeiture is not ordered, freezing ends.
All persons whose rights were breached (not only parties) may fill a legal remedy against seizure of objects done with a view of subsequent confiscation (article 236 CCP). After the decision on confiscation third parties may also claim compensation in civil proceedings. Compensation may include damages for lost income.
4.1.1.3.21. Portugal Every person has the right to appeal or obtain a review of the decision.
An appeal against an order freezing property located in another Member State, issued by a Portuguese judicial authority, as well as the requirement to modify or revoke such Page 371 of 477
measure is carried out in accordance with the provisions set out in the Criminal Procedure Code.
All procedural actors, including third parties in good faith, can appeal the decision on the recognition or enforcement of a confiscation order, with the purpose of safeguarding their rights.
The appeal is governed by the general rules of criminal procedural law and has a suspending effect on the process.
If an appeal is brought against a decision of recognition or enforcement of a confiscation order issued by a Portuguese court, the court informs the competent authority of the issuing State of that fact.
Appeals in cases where Portugal is the executing State are not admitted.
The appeal is always reasoned, under penalty of non-acceptance of the appeal, which reasoning, in the case of an appeal filed by statement in the minutes, may be submitted within 20 days, from the date of the decision.
The reasoning specifically states the grounds of the appeal and ends with the conclusions, stated by articles, in which the appellant summarises the reasons of the request.
Concerning points of law, the conclusions also state: a) The legal rules breached; b) The way in which, in the appellant’s understanding, the court under appeal has construed each rule or has applied it and the way in which it should have been construed or applied; and c) In the event of error in the determination of the rule applicable, the legal rule which, in the appellant’s understanding, must be applicable thereof.
When challenging the decision issued on points of fact, the appellant must specify: a) The concrete points of fact that he considers incorrectly tried; b) The concrete evidence, which points to a different decision from the decision appealed; c) The evidences, which must be renewed.
The term to file an appeal is of 20 days.
An appeal is not accepted when the decision is not subject to appeal, when it is filed beyond the due time, when the appellant does not have the necessary conditions to appeal or upon lack of reasoning.
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In the event of imprisoned defendants, such circumstance must be mentioned, with indication of the date of deprivation of liberty and of the penitentiary institution where they are.
The appeal of the decision of the recognition or enforcement of a confiscation order is governed by the general rules of criminal procedural law and suspends its effect.
The appeals against an order freezing property do not suspend its effect.
There are no delays imposed by law for the decision on the appeal to be taken.
The appeal affects orders sent to another Member State.
If an appeal is brought against a decision of recognition or enforcement of a confiscation order issued by a Portuguese court, the court informs the competent authority of the issuing State of that fact.
The Portuguese judicial authorities shall forthwith notify the competent judicial authority that the freezing order has been lifted.
All procedural actors, including third parties in good faith, can appeal the decision of the recognition or enforcement of a confiscation order, with the purpose of safeguarding their rights. The breach of rights can lead to invalidation or a limitation of the scope of an order.
If an appeal were to limit the scope of the order or invalidate it, what would be the procedure followed in issuing Member State A to update enforcing Member State B?
If an appeal were to limit the scope of the order, the judicial authorities of the issuing State shall forthwith notify the competent judicial authority that the freezing order has been lifted.
The transmissions between judicial authorities are conducted by any means capable of producing a written record under conditions that may allow establishing its authenticity.
The transmissions are translated into one of the official languages of the executing State or in another official language of the institutions of the European Communities that such State accepts through a declaration deposited with the General Secretariat of the Council.
Concerning confiscation orders, the Portuguese court immediately informs the competent authority of the executing state of any decision or measure that would annul the enforceability of the decision or the withdrawn from the executing State, for any other reason, of the responsibility for such execution.
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Such communication is made directly between the competent authorities of the issuing and the executing State by any means capable of obtaining a written record of such communications and under conditions that allow the verification of its authenticity.
The communication is translated into one of the official languages of the executing State or in another official language of the institutions of the European communities accepted by that Member State in a declaration deposited with the General Secretariat of the Council.
Remedies and safeguards of persons in another Member State against the orders to freeze/confiscate the assets emanating from the Member State:
The persons can appeal against an order freezing property, recognised and executed in Portugal submitting the appeal before Portuguese courts on the terms set out in the Criminal Procedure Code.
The appeal submitted in Portugal as well as its legal grounds are notified to the judicial authority of the issuing State in order to enable this State to respond within 10 days.
The case shall be immediately sent to the competent court once the answer from the judicial authority of the issuing State is annexed or whenever the deadline for its submission ends.
The judicial authority of the issuing State is informed of the outcome of the appeal.
An appeal against the legal grounds underlying the issue of a freezing order can only be submitted before Portuguese courts if Portugal is the issuing State.
Appeals relating to foundations underlying the issue of confiscation in cases where Portugal is the executing State are not admitted.
An appeal against an order freezing property or evidence located in another Member State, issued by a Portuguese judicial authority, as well as the requirement to modify or revoke such measure is carried out in accordance with the provisions set out in the Criminal Procedure Code.
An appeal against an order freezing property or evidence, recognised and executed in Portugal under the provisions set forth in the law may be submitted before Portuguese courts on the terms set out in the Criminal Procedure Code.
The appeal submitted in Portugal as well as its legal grounds are notified to the judicial authority of the issuing State in order to enable this State to respond within 10 days.
The case shall be immediately sent to the competent court once the answer from the judicial authority of the issuing State is annexed or whenever the deadline for its submission ends. Page 374 of 477
The judicial authority of the issuing State is informed of the outcome of the appeal.
An appeal against the legal grounds underlying the issue of a freezing order can only be submitted before Portuguese courts if Portugal is the issuing State.
The appeals do not suspend the orders’ effect.
All procedural actors, including third parties in good faith, can appeal the decision enforcing a confiscation order, with the purpose of safeguarding their rights.
The appeal is governed by the general rules of criminal procedural law and has a suspending effect of the process.
If an appeal is brought against a decision enforcing a confiscation order issued by a Portuguese court, the court informs the competent authority of the issuing State of that fact.
Appeals relating to foundations underlying the issue of confiscation in cases where Portugal is the executing State are not admitted.
4.1.1.3.22. Romania Every person has the right to appeal or obtain a review of the decision.
The ordinary legal remedies appeal in first and second degree does suspend the execution. The time to appeal is 10 days from the pronouncement of the criminal judgment if the person was present and from the communication of the criminal judgment if the person was not present to the debate phase and the pronouncement of the judgment.
Also an appeal over term can be lodged in accordance with the provisions of Art. 364 and Art. 365 of the Criminal Procedural Code.
Also, the contestation in annulment can be introduced within 10 days from the moment the execution started, or at any time, when res judicata issues are invoked.
A review request in favor of the sentenced person can be lodged any time.
During criminal investigations or the trial, the freezing measure is executable. The appeal does not suspend the execution.
Usually these types of requests are resolved in a speedy manner, although there is no imperative deadline.
The appeal does not affect orders sent to another Member State.
If an appeal were to limit the scope of an order, in accordance with Art. 224 paragraphs 7 of Law no. 302/2004, in case the competent Romanian judicial authority revokes the freezing measure, the executing foreign authority is informed immediately about this, Page 375 of 477
through any mean able to produce a written form. The same applies with regard to confiscation orders (Art. 257 of Law 302/2004).
Several general remedies are provided in the Code of Criminal Procedure, and described below. These general rules, complete with the rules related to criminal trial and appeals or special remedies, as well with civil law dispositions.
Art 168 Code Criminal Procedure (The Contestation of Precautionary Measures)
Para (1). Against the precautionary measure taken and of its enforcement, the accused person or the defendant, the civil responsibly party, as well as any other interested person can complain to the prosecutor or to the court, at any stage of the criminal trial.
(2) The decision of the court may be attacked separately by recourse. The recourse does not suspend the execution.
(3) After the final settlement of the criminal trial, if no complaint has been filed against the enforcement of the precautionary measure, a contestation could be made against this measure, under the civil law
(Art. 168 Code of Criminal Procedure, as it was modified by the Law no. 281/2003, published in the Official Gazette of Romania no. 468 of July 1, 2003)
Art. 169 Code Criminal Procedure (Restitution of things)
Para (1). If the prosecutor or the court finds out that the things removed from the accused person or defendant, or from any other person who received them in custody, are the property of the injured person or have been unjustly taken away from the victim, it orders the return of the respective things to the injured person. Any other person who claims a right over the things removed may ask, under art. 168, the establishment of this right and the return of the things removed.
(2) The things removed are returned only if the return does not impede on the discovery of the truth and the just settlement of the case and with the imposition of an obligation upon the person to whom the things are returned to keep them until the decision is declared final.
(As modified by the Law no. 281/2003, published in the Official Gazette of Romania no. 468 of 1 July 2003)
Art. 170 (Reestablishment of the precedent situation)
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The prosecutor or the court may take measures for the reestablishment of the situation prior to the offence, when the change of that situation was clearly the result of the offence, and the reestablishment is possible.
(As modified by the Law no. 281/2003, published in the Official Gazette of Romania no. 468 of July 1, 2003)
4.1.1.3.23. Slovakia Every person has the right to appeal or obtain a review of a decision affecting their rights.
A request for the review of a freezing order can be filed anytime until the final decision; An appeal against confiscation order has to be filed only within the 3-days or 15-days limit after the delivery of such order (depending on the nature of the order).
In general, only appeals against confiscation order suspends the freezing, confiscation or transfer of assets.
Decisions on the appeal or review should be taken “without delay”.
The appeal does not affect orders sent to another Member State.
In general, an appellate judicial body, either court or prosecutor, should review all the process before the order and a compliance with the legal preconditions for issuing of the order; if a first instance judicial body failed to follow all the conditions, the order has to be cancelled or limited.
If an appeal were to limit the scope of the order, an appropriate judicial body has to inform foreign judicial body without any delay.
Delivery of decisions In case of freezing of property, the decisions are taken ex parte. In case of confiscation of property, the decisions are not taken ex parte.
The decisions related to confiscation of criminal assets shall be delivered as follows:
- in case of freezing order, the Slovak authority may decide that it will be delivered to the person affected by the order only after its execution (Section 7 of the Act on Execution of Freezing Order) - in case of confiscation order the person involved will be informed even about the petition for issuance of such order. Legal remedies in case of freezing the criminal assets
An affected person may file a reasoned motion to reverse the freezing measure. The presiding judge and the prosecutor in a pre-trial proceeding shall decide on such motion
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without undue delay. The complaint against such decision is admissible. In case the motion is denied, such motion may be filed repeatedly with identical reasoning not sooner than 30 days after the decision on the previous motion became effective.
Please note that only final and binding decision may be used for the subsequent procedure for recognition and enforcement of the decision.
Legal remedies in case of confiscation of the criminal assets
The person affected by confiscation may use the following legal remedies:
(a) appeal against a judgment
The appeal is a legal remedy which may be filed against the judgment (in Slovak rozsudok). It shall be filed within 15 days following the day of its notification.
Filing of an appeal against the decision has suspension effect.
An appeal may be filed also against the judgment on recognition of foreign decision. The appeal may be filed by the convicted person, prosecutor and the Minister.
(b) complaint against a decision
The complaint is a legal remedy which may be filed against the decision (in Slovak uznesenie). The complaint shall be filed within 3 days following its notification.
Filing of a complaint has suspension effect only if expressly stated by Code of Criminal Procedure.
(c) resistance against a penal order
The resistance is a legal remedy against the penal order. It shall be filed within 8 days following its delivery.
(d) extraordinary appeal
The extraordinary appeal may be filed against final and binding decision within 3 years following its delivery (in case it is filed in favour of convicted person) or within 6 months (in case it is filed against the convicted person).
4.1.1.3.24. Spain Every person involved in a criminal proceeding has the right to appeal.
The delay to appeal the decision or review the decision is of five days since the Judge decision is known.
The appeal does not suspend the provisional measures (freezing, seize, restrain etc.). The appeal suspends the final confiscation and the transfer of assets until the Court decides on the merits.
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The decision on the appeal or review has to be taken within two months maximum.
An appeal would lead to an invalidation/limitation of the scope of the confiscation if there is no sufficient evidence of the participation of the person involved or evidence about the assets belong to him or her.
If an appeal were to limit the scope of the order, the issuing Member State would immediately communicate the information to the enforcing Member State.
Both Acts, Act 18/2006 and Act 4/2010, provide for the remedies in case of wrongful decisions. Act 18/2006 in articles 9 and 16; and Act 4/2010 in articles 13 and 23.
1. - Act 18/2006:
a) Article 9: Article 9 of Act 18/2006 is applicable in cases of transmission by Spanish authorities of a freezing order for its enforcement in another Member State of European Union and stipulates that against the decisions of a Spanish judicial authority, the remedies available are those of Spanish Legal System. Article 216 of Criminal Procedure Code sets three judicial remedies “reforma, apelación, queja”.
Article 217 of Criminal Procedure Code sets that the remedy of reconsideration may be invoked against all the orders of the investigating judge; appeal may only be made in the cases set forth in legislation.
Article 218 of Criminal Procedure Code establishes that the complaint may be invoked against all the judicial orders that are not subject to appeal and against the decisions which deny the application for leave to appeal.
Reconsideration and appeal remedies must be brought before the same judge who rendered the order. Complaint shall be submitted before the competent High Court. (Article 219 of Criminal Procedure Code).
Those remedies must always be filled in writing by a lawyer (article 221 of Criminal Procedure Code).
b) Article 16: Article 16 of Act 18/2006 is applicable in cases of enforcement in Spain of freezing orders issued of another European Union member State.
Public Prosecutor, the defendant or the person who is the legal owner of or has a legal interest that may be affected, can lodge an application for reconsideration or an appeal against orders handed down by the investigating judge on recognition and enforcement of freezing orders issued by a judicial authority in another Member State.
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A remedy does not suspend enforcement and shall be processed in accordance with the Criminal Procedure Code. As soon as the Examining Judge receives the remedy, he must inform the competent judicial authority of the issuing Member State to formulate, where appropriate, whatever considerations which might appear relevant, within five days after receipt of the certificate. The examining Judge shall inform the issuing judicial authority of the result of the remedy.
2. - Act 4/2010:
1. Article 13: Article 13 is applicable in cases of transmission by Spanish authorities of a confiscation order for its enforcement in another Member State of the European Union. In the event of a successful appeal against a confiscation order, the Spanish judicial authority shall immediately inform the executing State.
2. Article 23: Article 23 is applicable in cases of enforcement in Spain of confiscation orders issued by a judicial authority in another Member State.
The Public Prosecutor, the sentenced person or the person who is the legal owner of or has a legal interest in the affected assets, can lodge an application for reconsideration or an appeal against orders handed down by the Criminal Judge on recognition and enforcement of confiscation orders issued by a judicial authority in another Member State.
Those remedies don’t suspend enforcement and shall be processed in accordance with the Criminal Procedure Code.
The appeal must be founded on any of the following grounds (article 846 bis c):
- The proceedings or the judgment was made in violation of procedural rights and guarantees.
- The judgment was made in violation of a constitutional or legal precept in the legal assessment of the facts or in the determination of the penalty, safety measures or civil liability.
- There was a violation of the right to be presumed innocent, on the ground that on the basis of the evidence given in the court oral proceedings, the sentence imposed lacks any reasonable basis.
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Articles 121 of the Spanish Constitution and 292 and following of the Organic Act of Judicial Power regulate judicial errors.
“Article 121of the Spanish Constitution
Damages maybe caused by judicial error and those which result from the abnormal operation of the Administration of Justice ought to provide the right to an indemnification by the State, in accordance with the law.”
In case of judicial error, the injured party may ask for an indemnification if the following requisites are met:
- It should arise from a judicial decision. - The active subjects must be judges and magistrates. - The errors have to be gross, patent and manifest. - The responsibility is objective, it is not necessary to prove that the Judge or Magistrate acted fraudulently or wilfully. - It is necessary to prove an effective damage, economically assessable. - Finally the declaration of judicial error must be adopted by the Supreme Court prior to the exhaustion of domestic remedies. The compensation amount will be calculated by the injured party and submitted to the Ministry of Justice. The Supreme Court does not decide on the compensation amount. It is actually an administrative competence of the Ministry of Justice, whose decision is open to challenge before the courts. As reiterated by the Third Chamber of the Supreme Court in its decision dated 09/10/2012, the constant judicial criterion sets out that the determination of the assessment of compensation is a question of fact.
4.1.1.3.25. Slovenia In accordance with Article 333 of the ZPP, the appeal against the decision on the confiscation of assets of illicit origin must be filed within 15 days from the date that the party was served with the decision. The filing of the appeal against the decision on the confiscation of assets of illicit origin suspends the execution of the decision.
An appeal of the judgment of the court of first instance may be filed in case of: (i) a significant violation of the provisions of civil procedure; (ii) erroneous or incomplete findings concerning the facts of the case; or (iii) erroneous use of the material law.
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An appeal based upon erroneous or incomplete findings concerning the facts of the case cannot be invoked in the case of a default judgment. In addition, in cases where a judgment was entered because (i) a party acknowledges the claim of the other party, (ii) the complaining party renounces its claim, or (iii) the court issued an intermediary judgment regarding a particular issue, such decisions may be appealable only if such decision resulted from a significant violation of the rules of civil procedure or if such decision was given as a result of threat, force and so on.
4.1.1.3.26. Sweden Decisions on provisional attachment and seizure can be appealed. An appeal against provisional attachment is made to a court of appeals. A person subjected to a seizure (executed without a court order) may request a court decision. The district court’s decision can then be appealed to a court of appeals. Individuals also have a possibility to appeal the execution of a foreign freezing decision, whereas the substantive reasons for issuing the freezing decision in the first place may only be challenged before a court in the issuing state. As described above, a court always examines the prosecutor's decision to execute a freezing order (declaration of execution). The judicial review concerning freezing decisions is stated in Chapter 3 Section 16-17 of the Act (2005:500) on Recognition and Execution of European Union Freezing Decisions. When the freezing order has been executed, the Prosecutor shall promptly request the Court's examination of the declaration of enforceability. The district court shall, as soon as possible hold a hearing on the matter, if a hearing is not manifestly unrelated to examination of the issue of execution. If the court accepts the prosecutor's declaration of enforceability, the court then determines for how long the execution of the freezing order should be maintained. The court may extend the time appointed in the original decision. When the Court decides for how long the execution of the freezing order shall be made, the court may impose conditions that are called for in the interests of an individual's right or that are considered necessary in the public interest.
If there is no sufficient ground for the execution of the freezing order, the declaration of enforceability is not accepted by the court. In such a case, the enforcement actions undertaken should be revoked.
An appeal against the district court's decision may then be made in accordance with the rules in the Swedish Code of Judicial Procedure which apply to equivalent national measures.
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Concerning foreign confiscation decisions according to chapter 3 Section 14 of the Act (2011:423) on Recognition and Execution of Confiscation Orders in the European Union, the declaration of enforceability made by the Enforcement Agency may be appealed by the party against whom the declaration applies. The appeal must be in writing and filed with the Enforcement Authority within three weeks from the date that the declaration was made. If appeal is not made in this time-frame, the Enforcement Authority must reject it.
A declaration of enforceability must be set aside if :
1. it is found that the confiscation order cannot be enforced in Sweden, 2. If the confiscation order relates to assets, which are not found in this country, 3. if property that can be used for enforcement is not found or if for any other reason it is not possible to execute the confiscation order
4. pardon has been granted or other order under Chapter 12 Section 9 Form of Government has been announced,
5. the confiscation order has been enforced in another state, or
6. request for enforcement of the confiscation order is revoked.
If a declaration of enforceability is not accepted, the enforcement measures taken are to be revoked.
According to Chapter 18, Section 1 of the Enforcement Code, the Enforcement Authority's decision may be appealed by the person it affects, if it is not in his favour. The applicant or the respondent may also complain that the decision infringes on third party rights. The general rule on the time limit of appeal in these cases, is three weeks. How long time it takes to appeal and gain a final decision (e.g. revoke the confiscation/freezing decision) depends on each individual case, such as how fast an appeal is made, etc., but the general rule is that these cases are to be handled promptly, since they affect the rights of the individuals.
Grounds for appeal might, e.g., be that the suspect needs the property for work purposes, that the property is not worth much money, 322 or that (mostly in foreign cases), the requirements stated with regard to the declaration of enforceability were not met (e.g., the suspect was not informed of the criminal proceedings against him, the decision was made in his absence, etc.).
It may also be possible to seek compensation (damages) from the Chancellor of Justice. According to Chapter 3 Section 2 of the Tort Liability Act (1972:207)323 the state is to
322 See a case from Supreme Court (NJA 1982, p. 59), where the person affected by confiscation claimed that he needed the confiscated property (car) to go to work. Accessed at https://lagen.nu/dom/nja/1982s59.
323 Accessed at http://www.notisum.se/rnp/sls/lag/19720207.htm. Page 383 of 477
compensate individuals for personal, material and pure financial damage that has been caused by fault or negligence of the state when acting in its authority in such activities as the state is responsible for. However, if the state is to become liable with regard to questions pertaining to the application of law and evaluation of evidence it is not enough that an authority has made a decision that has been changed after a reconsideration or appeal, or that the decision can otherwise be questioned. In cases of errors in application of law more substantial mistakes are required if negligence is to be presumed.324 This is also illustrated in a case decided by the Swedish Chancellor of Justice concerning a foreign decision on attachment.325 This decision was executed in Sweden and subsequently prolonged, lasting in total nine months. Even if the issuing state eventually revoked the decision, and it was, thus, not followed by a confiscation order, the Chancellor of Justice declared the actions of the Swedish state to be in accordance with law. Also, it might take some time to receive such a decision, and, thus, compensation.
Summary:
Decisions on provisional attachment and seizure can be appealed. As regards provisional attachment, a hearing is held prior to the court’s decision. As regards seizure, the suspect will not be informed by the prosecutor beforehand, but shall promptly be notified of the seizure and of the disposal of the seized property. It may also be possible to seek compensation (damages) from the Chancellor of Justice. There is no time limit to appeal seizure or provisional attachment decisions prior to main hearing. Appeal against provisional attachment or seizure does not suspend the decision. One of the procedural safeguards afforded to a suspect is that a decision on provisional attachment or seizure has to be proportional. This means that property may be seized (or subject to provisional attachment) only if the reasons for seizure (or provisional attachment) outweigh the consequent intrusion or other detriment to the suspect or to another adverse interest.
4.1.1.3.27. United Kingdom
The parties have rights on appeal.
The defendant would file notice of appeal to the court and side copy to the enforcement authority (CPS, SFO or SOCA) that applied for the order.
324 See for instance the cases from the Supreme Court NJA 1994 p. 654, acccessed at https://lagen.nu/dom/nja/1994s654 and NJA 2003 p. 285, accessed at https://lagen.nu/dom/nja/2003s285.
325 Diarienummer 5978-05-40, 2007-12-17, accessed at : http://www.jk.se/sv-SE/Beslut/Skadestandsarenden/5978-05-40.aspx.
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The timetable for appeals is dictated by court management decisions (made by the judge). There are time limits on when an appeal may be lodged. Out-of-time appeals may be lodged on an exceptional basis. It would be for the judge to decide whether or not to accept an out-of-time appeal on a case-by-case basis.
The making of freezing and confiscation orders is subject to judicial oversight. Defendants have appeal rights as described above. The ECHR applies.
An appeal against or a request to review a decision to freeze/confiscate criminal assets does not suspend the freezing/confiscation/transfer of assets in respect of freezing (unless of course the appeal is successful). The Court may decide to stay (i.e. suspend) orders to confiscate or transfer assets pending appeals.
An appeal affects orders sent to another Member State.
In respect of criminal restraint orders, which relate to value-based confiscation, the UK asks other Member States to give effect to (enforce) its restraint orders by way of Letter of Request.
In respect of NCB freezing orders, the UK does seek enforcement of its freezing orders in other Member States.
Final (that is, beyond the point when they can be appealed) confiscation orders are sent under a Letter of Request to requested jurisdictions for enforcement.
In respect of all orders transmitted, if the domestic order were stayed the UK Central Authority (UKCA) would contact its counterpart in the requested jurisdiction and ask for the Letter of Request to be suspended until the outcome of the appeal was determined.
If an appeal were to limit the scope of the order, UKCA would forward a letter from the UK prosecuting authority to its counterpart in the requested jurisdiction.
About the remedies and safeguards of people in another State member against the orders to freeze/confiscate the assets emanating from Member State A:
The 2005 Order gives a right of appeal against (Part 2 POCA) freezing orders, because in such cases the UK applies for a restraint order under POCA rather than enforcing an overseas request. There is no right of appeal in the UK against overseas confiscation orders. However, there is a right of appeal in respect of the registration of the overseas confiscation order and against the decision of a court to appoint an Enforcement Receiver (appointed to realise assets to pay the overseas confiscation order) by anyone affected by the registration of the order or the appointment of the Enforcement Receiver.
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Freezing orders made under Part 5 POCA also give the defendant a right of appeal (again, the UK would not enforce an overseas civil order but would apply to court for one under domestic legislation at the request of an overseas jurisdiction).
In cases of civil confiscation orders, the defendant would be served a notice of the hearing and can contest the order in court.
Rights of appeal
Defendants (and respondents in civil proceedings) would have the right to challenge any court decision. Specific remedies and safeguards for conviction based and non-conviction based freezing and confiscation orders made in England and Wales are detailed below. Similar powers exist for Scotland and Northern Ireland.
Conviction-based (Part 2 POCA) restraint orders
Section 42 of POCA gives the defendant the right to seek the discharge (cancellation) or variation of a restraint order.
Appeal rights against a restraint order are found in sections 43 and 44 of POCA.
Section 63 of POCA gives the defendant the right to seek the discharge or variation of court orders about management receivers.
Appeal rights against court orders about management receivers are found in section 65 and 66 of POCA.
Conviction-based (Part 2 POCA) confiscation orders
Defendants have a general right of appeal against conviction and sentencing (as per the Criminal Appeal Act 1968), and a confiscation order would be included within the appeal against sentencing.
Articles 6(1) and 7 of the European Convention on Human Rights (ECHR) apply to all Part 2 POCA restraint and confiscation orders.
Non-conviction based (Part 5 POCA) freezing orders
Under section 245B POCA defendants may apply for the discharge or variation of a freezing order made against them. Under section 245G POCA defendants may apply for the discharge or variation of a court order about the appointment of an interim receiver.
Under section 251 POCA defendants may apply for the discharge or variation of an interim receiving order.
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We would like to mention that the above mentioned sections 245B and 245G POCA do not appear on the linked copy of the POCA as the changes have yet to be made by the government editorial team.
Non-conviction based (Part 5 POCA) confiscation orders
Under section 243 of POCA the defendant in a civil recovery case may contest the making of the order.
Article 6(1) of the ECHR applies to all Part 5 freezing and confiscation orders.
4.1.1.3.28. Croatia Article 11 of the Act on proceeding of confiscation of proceeds of crime or misdemeanour regulates freezing of property (ordering of provisional measures of securing the confiscation of proceeds of crime) as ex parte procedure, providing the possibility of submitting the appeal against the judicial decision (paragraph 5).
This appeal does not suspend the execution of the judicial decision. Regarding the confiscation of the property, mentioned Act regulates the procedure in the Article 4 and 5.
The parties have a right to appeal.
The higher Court brings the decision on the appeal.
As the decision on the confiscation of the property is part of the judgment, it is made at the end of the trial. Please note that the Act on criminal procedure proscribes the judgments in absentia (Article 402). So the judgment according to which the accused is found guilty and that contains in its dictum decision of confiscation of property, can be brought after the hearing held without the presence of the accused.
The appellant can submit the request for the reopening the procedure against the confiscation order in accordance with the art. 562. of the Criminal procedure act.
The procedure for appealing the judgment, containing a confiscation order, is proscribed by the Criminal Procedure Act (art 472-496). The procedure for appealing against the ruling on the freezing property is regulated by the Criminal Procedure Act (Art. 491-496.).
The procedure on the request for the reopening the procedure against the decision on the confiscation of the property contained in the judgment is regulated by the Criminal Procedure Act (art 497-509). The same provisions are applied requests for the reopening the procedure submitted against the judgment by which the accused has been found guilty.
The Criminal Procedure Act does not proscribe the delay for submitting the request for the reopening the criminal procedure. The appeal against the judgment can be submitted Page 387 of 477
within 15 days of the communication of the decision (this term can be prolong under the conditions proscribed by the Article 463 of the Criminal Procedure Act). The appeal against the ruling ordering the freezing of property can be submitted in the term of three days (art 11 of the Act on procedure of the confiscation of the proceeds of crime and misdemeanour).
The right on the appeal is proscribed by afore mentioned acts, so the court decides on each appeal that is submitted in the proscribed term by the authorized person, in accordance with the Criminal Procedure Act.
The appeal against the ruling on freezing of property does not suspend the execution of the ruling. The appeal against the judgment that contains the confiscation order, suspend the execution of the judgment. Please note that the request for the reopening of the procedure is extraordinary legal remedy that is being submitted against the final and enforceable judicial decision.
The law does not proscribe the term in which the mentioned decision must be taken.
Article 482
When it establishes that the reasons for an appeal are lacking and that the violations of law referred to in Article 469 of this Act do not exist, the court at second instance shall by a judgment reject the appeal as unfounded and affirm the judgment of the first instance.
Article 483
(1) When satisfying an appeal or by virtue of the office, a court at second instance shall vacate the judgment of first instance by a ruling and remand the case for retrial to the court of first instance if it establishes a substantial violation of the criminal procedure provisions, except in cases referred to in Article 486 paragraph 1 of this Act, or if it considers that, for reasons of an erroneously and incompletely determined factual situation, a new trial should be held before the court of first instance;
(2) The judgment before the court of first instance may not be vacated to the prejudice of the accused for reasons referred to in Article 468 paragraph 1 item 8 of this Act;
(3) The court of second instance shall, by virtue of the office, vacate the judgment at first instance finding the accused guilty rendered under Article 402 paragraph 3 of this Act if he is deprived of freedom.
Article 484
(1) A court at second instance may order that a new trial before the court at first instance be held before a completely different panel. If very important reasons exist, a court at
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second instance may send the case to another court at first instance having the subject matter jurisdiction;
(2) A court of second instance may only partially revise the judgment of first instance if certain parts of the judgment may be separated without causing prejudice to correct adjudication;
(3) If the accused is in detention, a court of second instance shall review whether the reasons for detention still exist and render a ruling on the prolongation or vacation of detention and immediately send it to the court of first instance. This ruling is not subject to appellate review.
Article 485
If, while reviewing an appeal, the court of second instance determines that it has subject matter jurisdiction over the case as a court of first instance, it shall vacate the judgment of first instance, remand the case to its panel having jurisdiction and notify the court of first instance thereof.
Article 486
(1) When satisfying an appeal or by virtue of the office, the court of second instance shall revise the judgment of first instance by a judgment if it establishes that the relevant facts were correctly determined in the judgment of first instance and that, regarding the factual situation determined and by the correct application of law, a different judgment should have been rendered and, taking the state of the matter into consideration, in the case of violations referred to in Article 468 paragraph 1 items 5, 9 and 10 of this Act;
(2) If, due to the reversal of the judgment of first instance, conditions are met for ordering or vacating detention, the court of second instance shall render a separate ruling thereon, which is not subject to appellate review, unless otherwise prescribed by this Act.˝
If an appeal limits the scope of the order or invalidates it, competent judicial authorities shall inform the foreign authorities competent for the execution of the MLA request for the freezing /confiscation of property.
Summary
Appeals are possible against freezing and confiscation orders except in Malta, where there is no possible appeal against a freezing order.
In general, appeals against freezing orders do not suspend the freezing of the assets.
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In some Member States, the court may, in certain circumstances, order that the freezing be suspended pending the appeal.
Appeals against confiscation orders do have a suspending effect in some countries. In some countries the appeal against a confiscation order may only be made if the appeal is lodged against the whole decision. In others, an appeal is possible against the confiscation only.
In most countries proportionality principles apply in cases of freezing and confiscation orders. The proportionality principles can vary. In some countries the proportionality principle used makes an obligation to ensure that the measure taken is proportionate to the general objective. Deprivation of property should only occur in cases of serious crimes. In other countries, the proportionality principle is applied to the value of the frozen or confiscated assets by reference to the value of the proceeds of the crime. Finally, in others still the main penalty for the offence should always be proportionally more important than the confiscation. Where confiscation is ordered as a precautionary or security measure, the principle applies again to help determine if the assets are truly likely to present a danger for public order.
Compensation for wrongful confiscations is possible in all Member States. Civil actions are generally available. Complaints of a criminal nature against officials are also possible. It is unclear however how effective this is and whether the damages offered to the persons that suffered the harm are based on economic principles of evaluation that would include such notions as lost opportunity, moral and reputational damage and lost profits or follow a system set by law and disconnected from economic reality.
In some Member States, the delay to appeal a decision is extended when the affected person lives abroad (i.e. Greece).
In cases of confiscations orders, in most Member States, the courts are not time constrained to make decisions on appeal.
In general, when an appeal against a decision is lodged, it is notified to any Member State that is a recipient of that decision. If the appeal is successful and the freezing order or confiscation order is cancelled or limited in scope, this is notified to any Member State that is a recipient of the decision.
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In most Member States, the appeal against a freezing or confiscation order must be filed with the court that decided on the order, which is the issuing Member State’s court. In most Member States, information will be provided to the affected person on how to appeal a freezing or confiscation order.
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4.1.2. Third party rights Third parties’ assets may be confiscated where they are somehow associated with the crime or it is alleged that their assets are the proceeds of a crime. In general in Member States bona fide third parties are protected against confiscation.
4.1.2.1. Austria Every decision of a court or an order of the public prosecutor has to be notified to all persons concerned.
4.1.2.2. Belgium For freezing phase:
Article 15 of the Law of 5 August 2006 on the application of the principle of mutual recognition of judicial decisions in criminal matters between Member States of the European Union.
The application of Article 61quater of Criminal procedure Code remains possible: recourse against the decision of the prosecutor/investigative judge to keep assets under seizure.
For confiscation phase:
Article 30 of the Law of 5 August 2006 on the application of the principle of mutual recognition of judicial decisions in criminal matters between Member States of the European Union: appeal of the decision of the first instance judge in front of the Court of Appeal.
4.1.2.3. Bulgaria The new 2012 law in Bulgaria enables the confiscation to extend to any assets which the offender has direct or indirect control over. This also concerns assets of family members which are considered the lawful or putative husband/wife and the under-age children and direct relatives of the checked person as well as the lateral ones up to 4th degree. Further, third party held assets can be seized where the persons to whom the assets were transferred knew or could have known that they were illegally acquired by the transferee. Bona fide third parties are protected in so far as they can show that the assets that they hold are from legitimate activities.
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4.1.2.4. Cyprus According to section 33 (2) (b) “any person who is likely to be affected by the making of a According to the AML, persons affected by a freezing or a confiscation order have the right to appear before the court and file objection to the order being made confiscation order has been given the opportunity to make representations, if he so wishes, before the court in respect of the making of the order.”
It is notable that third parties do not have a right of audience in the Crown Court. In Robson the Court of Appeal stated that there was nothing in the Act giving a third party the right to make representations to the Crown Court. This is not unjust as a confiscation order is just an order against the defendant to pay a sum of money. It is only if the defendant does not pay the confiscation order voluntarily that the civil courts may make an order forcing the sale of particular property. At that stage the third party has a right of audience, indeed any order of the High Court to enforce a charge or empower a receiver to sell any property or ordering a third party to pay any sum to a receiver cannot be made until the interested party has been heard.
4.1.2.5. The Czech Republic Since the Czech Republic applies a forfeiture (non-conviction cased confiscation) only in criminal proceedings (with the criminal burden of proof), the presumption of innocence has to be respected.
The “third party” – the participant is a party of criminal proceedings in CZ(Sec 12(6) of the CPC). Rights of a participant are set in Sec 42 of the CPC:
Section 42
(1) The person whose assets were forfeited or are due to be forfeited according to a proposal (party concerned) must be given an opportunity to comment on the matter; he may be present at the trial and public session, make proposals, inspect documents (Section 65), and submit appeals where admissible according to this Code.
(2) The authorities involved in criminal proceedings are obligated to instruct the party concerned of their rights and provide them with the full opportunity to exercise them.
(3) If the party concerned is legally incapacitated or if their legal capacity is restricted, their rights shall be exercised by their statutory representative in accordance with this Code.
The Court can decide on forfeiture in a trial or in a separate proceeding (in cases when it is not possible to prosecute an offender). Such a procedure is regulated in Sections 239 and
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239a of the CPC (the participant, as a party of such proceedings, can lodge a complaint against a decision on forfeiture).
Section 239
(1) Unless the court has reserved the decision on protective treatment, security detention, or forfeiture of items or other assets pursuant to Section 230 (2), it may impose it in a public session only if the public prosecutor petitions it.
(2) A complaint is admissible against the decision on protective treatment, security detention, forfeiture of items or other assets, which has a dilatory effect.
Section 239a
(1) If it is impossible to reliably identify the owner of a thing that is to be forfeited, or if his place of residence is not known, the presiding judge shall appoint him a guardian. The guardian has the same rights as the owner of the property in the proceedings on forfeiture of items.
(2) All documents intended for the owner of the property shall be served only to the guardian. The summons of the owner of the property to the public session shall be published in an appropriate manner. The public session will then be held even in the absence of the owner of the property, regardless of whether the owner of the property was aware of it.
(3) A complaint is admissible against the decision on the appointment of a guardian.
4.1.2.6. Denmark Denmark has no experience in international co-operation regarding civil and criminal non- conviction-based confiscation orders.
4.1.2.7. Estonia Pursuant to § 50810 (2) of the Code of Criminal Procedure, a European freezing order issued to Estonia and the ruling of the competent judicial authority of the requesting state, which is the basis for the freezing order, cannot be contested in Estonia. If a person so requests, the Public Prosecutor's Office shall provide contact details, which allow the person to examine the procedure for contesting a European freezing order in the requesting state. Pursuant to § 50810 (3) of the Code of Criminal Procedure, filing of an appeal shall not suspend the execution of the contested order unless otherwise decided by the person resolving the dispute.
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At the same time, § 50810 (1) of the Code of Criminal Procedure states that in Estonia, third party rights to property, which is the object of a European freezing order, shall be preserved. An appeal against an order of a Prosecutor’s Office or activities of an investigative body (and a seizure ruling made by a county court) in connection with the execution of a European freezing order shall be filed with the county court in whose territorial jurisdiction the contested order was prepared or the contested procedural act was performed. An appeal against a ruling on the freezing of property may be filed pursuant to the procedure provided for in § 387 (2) of that Code within three days as of receipt of the ruling.
§ 508 Compensation for damage:
(1) Estonia as a requesting state shall bear all the expenses incurred by the requested state, pursuant to the law of that state, in connection with damage caused to a third party by execution of a European freezing order provided that the damage was not caused by wrongful acts of the requested state. The Ministry of Justice shall decide on the compensation for damage;
(2) Estonia as the requested state has the right to require from the requesting state compensation for expenses, which Estonia has compensated to a third party in connection with damage, caused by the execution of a European freezing order provided that the damage was not caused by wrongful acts of Estonia. The Ministry of Justice shall decide on submission of a request for compensation of expenses to the requesting state.
(16.04.2008 entered into force 23.05.2008 - RT I 2008, 19, 132).
A ruling of confiscation of property can be contested with an appeal and a cassation appeal. Pursuant to § 318 (21) of the Code of Criminal Procedure, a third party may file an appeal against a court judgment with regard to his or her rights or freedoms, which are protected by law. Pursuant to § 344 (21) of the Code of Criminal Procedure, a third party has the same right in cassation proceedings.
Contesting a confiscation ruling takes place pursuant to § 40310 of the Code of Criminal Procedure: § 40310 (1) states that a prosecutor, the convicted offender or a third party may file an appeal pursuant to the procedure provided for in Chapter 15 of that Code against a confiscation ruling and a ruling by which the confiscation application is denied.
4.1.2.8. Finland As to the question of third parties, according to Finnish legislation, rights of an injured party are broadly protected in confiscation procedures as well as in criminal procedure in general. For instance, an injured party may claim for damages in the context of criminal
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proceedings. He or she may also request forfeiture when prosecuting charges on his or her own in accordance with relevant provisions of Criminal Procedure Act (section 9 of chapter 10 of the Criminal Code).
According to section 2(3) of Chapter 10 of the Criminal Code, forfeiture of the proceeds of crime shall not be ordered in so far as they have been returned to the injured party, or in so far as they have been or will be ordered to be reimbursed to the injured party by way of compensation or restitution. If a claim for compensation or restitution has not been filed or if the claim has still not been decided when the request for forfeiture is being decided, the forfeiture shall be ordered.
Paragraph 2 of section 11 of chapter 2 of the Criminal Code contains provisions for situations where compensation for damages or restitution has been paid or ordered after the forfeiture has been ordered in accordance with section 2(3). In these cases the forfeiture may be enforced to a correspondingly reduced amount. If the forfeiture has already been enforced, the amount may be ordered to be paid from State funds. An action to this effect shall be brought in the District Court of the plaintiffs domicile or the District Court of Helsinki within five years from the date when the judgment containing the forfeiture order became final. The State, represented by the Legal Register Centre, is the respondent in such a case.
Furthermore, according to paragraph 3 of section 11 of Chapter 2 of the Criminal Code a person who in good faith has obtained a mortgage, a lien or a right of retention to an object or property referred to in section 4 or 5 and ordered forfeit may foreclose on the same regardless of whether the underlying receivable has become due. An action to this effect shall be brought as provided in subsection 2. Failing this, the mortgage, lien or right of retention expires.
4.1.2.9. France The person who holds an asset that is the object of a freezing order can, by request handed to the investigating judge of the territorially competent Court of Appeal, in ten days from the date of execution of the decision, form an appeal against the order.
The appeal does not suspend the order.
Notification of the seizure order When the magistrate authorizes the seizure, its decision is notified to the public prosecutor, the owner of the confiscated asset and the third parties who have rights over the asset in order for them to be able to contest the decision. In practice, depending on the procedure used, the persons affected by the seizure of an asset usually become aware
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of that fact either by being present at the time of the search during which the seizure is carried out or, in the case of the seizure of sums held in a bank account, as a result of the funds becoming unavailable.
The appeal regarding the authorization of the seizure The order authorizing the seizure is notified to the public prosecutor, the owner of the confiscated asset and the third parties who have rights over the asset. These persons can lodge an appeal before the investigating chamber within ten days following the notification. The owner and the third parties may be heard by the investigating chamber. Nonetheless, the third parties cannot have a complete access to the details of the proceeding. The appeal against the seizure order does not suspend the execution of the order.
4.1.2.10. Germany In cases of request for legal assistance of a foreign Member State the provincial court shall decide on the enforceability of a foreign order by order (section 55 AICCM). The public prosecution service, the convicted person and third parties who when a request for enforcement of an order for confiscation or deprivation was made have claimed rights to the object, may appeal the order within one week.
4.1.2.11. Greece Bona fide third parties that took part in the procedure that led to the confiscation have the right to appeal the relevant degree of the judicial council or judgment of the court, in accordance with Arts 310(2), 373, 492 and 504(3) of the Code of Criminal Procedure.
Bona fide third parties that did not participate in the proceedings, also have the right to appeal the decisions.
Furthermore, the confiscation orders are considered to have temporary standing for them and do not prevent them from seeking redress before the competent civil courts.
Non-conviction based confiscation of assets or means belonging to a third party would be allowed only if it was proven that such party was aware of the money laundering offence or the predicate offence at the time of their acquisition. There is no presumption of illegality in force and the standards of proof regarding the origin of property do not differ from generally applied standards.
There is very limited experience on the execution of non-conviction based confiscation orders affecting third parties that were generated in another Member State.
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4.1.2.12. Hungary According to Article 7 of the Criminal Procedure Act, no one can be considered guilty until his/her culpability is established in a final court decision.
If the Hungarian competent authorities enforce a (criminal) non-conviction based confiscation order issued by another Member State, for the enforcement, Hungarian national law shall apply, and thus during the criminal proceedings the principle of presumption of innocence shall also be taken into consideration.
The Criminal Procedure Act provides for legal remedies against court decisions, including confiscation. Pursuant to Section 55, after the court orders confiscation, third parties can assert their claims to ownership by other legal means, e.g. civil proceedings.
Section 87 of the 11th Statutory Rule of 1979 on the Enforcement of Punishments and Measures states that if third parties assert their claims to ownership by legal means other than criminal proceedings; see also point 2) under CHAPTER 3 above within 60 days of the court order, the execution of a confiscation order has to be postponed.
Act LIII of 1994 on Judicial Enforcement. The judicial enforcement procedure has its own system of legal remedies: i) remedies against the initiation of enforcement [revoking the execution sheet, removing the execution clause, appeal, request for review] and ii) remedies during enforcement [execution complaint, appeal]. Please note that the subsidiary law of judicial enforcement is contained mainly by the Civil Procedure Act.
4.1.2.13. Ireland Applications may be made under Section 3 or 4 of POCA and allowed by the Court. In such examples, the rights are restricted to bone fide applications by unconnected parties, which gave rise to the criminal conduct or the asset.
The Court allows for the notification of parties having an interest in the asset to make any application or claim.
4.1.2.14. Italy
During the investigation the order of seizure shall be communicated to the person concerned. The order includes the reasons for the decision and the procedures for appeal to it.
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Bona fide persons have a claim on the assets and where the seized assets belong to third parties it is for the authorities to demonstrate that such third party is not bona fide. As a result third parties enjoy a presumption that they are bona fide owners of assets to appoint a duty lawyer.
4.1.2.15. Latvia Section 360 Rights of Third Persons:
(1) If criminally acquired property has been found on a third person, such property shall be returned, on the basis of ownership, to the owner or lawful possessor thereof;
(2) If criminally acquired property has been returned to the owner or lawful possessor thereof, the third person who acquired such property, or pledge, in good faith has the right to submit a claim, in accordance with civil procedures, regarding compensation for the loss, including against an accused or convicted person.
4.1.2.16. Lithuania A person whose property is subject to a restriction on ownership rights shall be entitled to appeal against the resolution of a prosecutor to the pre-trial investigation judge.
The investigating judge must examine such an appeal within seven days from the receipt of the appeal. The decision of the investigating judge may be appealed before a higher court. The resolution of the higher court shall be final and not subject to appeal (Art 151 Part 5 of the CCP).
Temporary restriction on ownership rights imposed by the decision of a prosecutor cannot be longer than 6 months. The judge of a pre-trial investigation may prolong this period but no more than 2 times each time prolonging it with the period of 3 months.
4.1.2.17. Luxembourg The alien decision has to be enforced through an exequatur procedure at the district court. Interested and third parties who acquired rights over the seized assets get a formal notice for the audience and might intervene personally or be represented.
Seizing orders
The interested parties such as persons who hold seized accounts or are beneficial owner of these accounts can either (i) contest the formal regularity of the acts of the investigating magistrate or (ii) ask for the seized goods to be handed back to them.
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(iii) The defendant or an interested party under the provisions of Article 126 of the code d’instruction criminelle within 5 days of the knowledge of the act can object any decision of an investigation magistrate such as a seizing order. The chambre du conseil, which is a specialised jurisdiction at the district court, is competent to deal with these claims. If the decision of the investigating magistrate is cancelled because of a formal mistake the seizure resulting of the void act is void as well.
(iv) At any stage of a procedure, the defendant or an interested party may request the competent jurisdiction to order the seized goods to be handed back under the provisions - Article 68 code d’instruction criminelle. The seized property shall not be handed back if it is necessary as a proof, for the rights of any parties or harmful to persons or property or if the property might be confiscated.
Confiscation orders
The judgment ordering the confiscation can be appealed within 40 days of the judgment if it is adversarial or within 40 days of the notification to the parties in the case of an ex parte decision.
4.1.2.18. Malta Article 22C of the DDO provides the special court proceedings in the event that following an order for the forfeiture or confiscation as per article 22(3A)(d) of the DDO, the person convicted or the third party mentioned in the order, may file an action before the Civil Court, First Hall, to prove that the proceeds or property in question were superfluous to the offence. The action in question must be brought before the Court within three months from the date of the definite judgment.
4.1.2.19. Netherlands The Dutch law does not contain any provisions in this field.
Because the only provision the Dutch law has to enforcement of foreign non-confiscation based orders is the seizing of assets that are surrendered to the requesting state to use them in their procedure, therefore the interests of bona fide third parties would be investigated in the requesting country.
4.1.2.20. Poland All persons whose rights were breached (not only parties) may fill a legal remedy against seizure of objects done with a view of subsequent confiscation (article 236 CCP). After the decision on confiscation third parties may also claim compensation in civil proceedings. Page 400 of 477
Information duty is not directly regulated, although the person will be normally heard as a witness.
The person may initiate civil proceedings against a confiscation order and participate in the proceedings as a party.
4.1.2.21. Portugal All procedural actors, including third parties in good faith, can appeal the decision of the recognition or enforcement of a confiscation order, with the purpose of safeguarding their rights.
The appeal is governed by the general rules of criminal procedural law and suspends the effect of the order.
If an appeal is brought against a decision of recognition or enforcement of a confiscation order issued by a Portuguese court, the court informs the competent authority of the issuing State of that fact.
Appeals relating to foundations underlying the issue of confiscation in cases where Portugal is the executing State are not admitted.
If the objects seized are capable of being declared to be lost for the benefit of the State and do not belong to the defendant, the judicial authority orders the attendance of the party concerned and hears him. The judicial authority waives from the attendance of the party concerned when such attendance is not possible. (Article 178 of the Code of Criminal Procedure).
4.1.2.22. Romania According to the provisions of Art. 168 of the Criminal Procedural Code, the suspect, the defendant or the person civil responsible can formulate a complaint in any phase of the criminal proceedings. During the criminal investigation, the complaint is forwarded to the superior prosecutor. This decision is final. The complaint does not suspend though the execution of the measure (Art. 275 of the Criminal Procedural Code). The complaint is solved in a period of maximum 20 days and the solution is communicated to the person who filed the complaint.
During the trial, the defendants can request the lifting of the order before the court. The case is tried in public session, the parties being present and assisted by legal attorneys (Art. 168 and 171 of the Criminal Procedural Code).
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Against the judgment by means of which it was disposed the confiscation measure, ordinary legal measures can be disposed (appeal in first and second degree). The measures suspend the execution.
After the decision is final, an appeal can be lodged pursuant to civil proceedings (Art. 168 paragraph 3 of the Criminal Procedural Code).
Also extraordinary legal remedies can be lodged if legal conditions are fulfilled (contestation in annulment and review).
In any case, as mentioned earlier, confiscation may not be a criminal punishment but in accordance with the Romanian law is a criminal law sanction. Consequently, disposing a confiscation measure will not impede on the presumption of innocence of the suspect or defendant.
Art. 44 paragraph 8 of the Romanian Constitution prescribes a presumption that property in Romania has been obtained in a licit way, therefore onus probandi as regards the illicit character of property belongs to the judicial authorities, the person under investigation not being obliged to actually prove the licit character of if his/her wealth.
According to a decision of the Constitutional Court pronounced on this matter (Decision no 799/2011) this does not impede the legislator to adopt measures that correspond to the requirements of the European Union as regards the fight against crime.
Consequently, the Romanian legislator adopted in 2012 measures related to extended confiscation with a view to implement relevant provisions from FD 2005/212/JHA.
4.1.2.23. Slovakia In general, an owner (designated owner) of an asset is always a party to the proceedings before the confiscation order is issued and has a right to appeal against it.
During the procedure, the judicial body is responsible to prove the illegal origin of an assets as well as knowledge (aware) of the third party of its origin. Third parties are presumed bona fide.
There exists a number of remedies and/or procedural safeguards including for example, the principle that freezing orders “shall not include the financial assets which are necessary to satisfy requisite needs of life of the accused person or a person, of which the upbringing or subsistence the accused or the person of which the financial assets were seized, is obliged to take care”- article 95 section 4, Criminal Procedure Code.
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The prosecutor can also set aside a freezing order if the order is not necessary anymore for the purposes of the criminal proceedings.
The person, whose assets were frozen, is allowed to ask for setting aside (review) or reducing the scope of the order. The presiding judge during the trail and prosecutor in the preliminary proceedings decide on the review application without delay. An appeal may be lodged within three days after delivery of such decision.
In a case of a confiscation order the affected person is always a party to the proceedings and he or she can file any motions against order, including the appeal.
Under Section 45 of the Code of Criminal Procedure, the person affected by the confiscation (person concerned) has the following rights:
- once the petition for imposition of protective measure is filed, he/she has a right to give a statements in relation to the circumstances and evidences presented in the petition;
- to be present at the main hearing and public session, to submit petitions and evidences and review the court file;
- to file remedies under Code of Criminal Procedure.
4.1.2.24. Slovenia During the civil procedure of confiscation of the illegal assets, the State Prosecution has to support either the presumption of illegality of the assets, made on the basis of ZOPNI, Article 5, or, if the assets were transferred to a closely connected person or a close relative, the presumption of acquiring the assets without remuneration or against inappropriately low remuneration, made of the basis of ZOPNI, Article 6. The person under investigation is given the opportunity to contest the mentioned presumptions, i.e. to prove that his/her assets were acquired legally or to prove that the assets were purchased for the then-applicable market price, respectively (Article 27 of the ZOPNI).
4.1.2.25. Spain Third parties, whose assets have been confiscated because of their association with a crime or because it is alleged that their assets are the proceeds of a crime, have the right to participate in the legal proceedings. The Investigative Judge shall notify them the measure agreed. From the moment of their first notification, the third party may intervene in the process, giving and granting the pertinent powers of attorney and
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appointing counsel to represent and defend their interests before the courts with the relevant discovery.
4.1.2.26. Sweden One procedural safeguard afforded to the suspects is that a decision on provisional attachment or seizure has to be proportional which means that property may be seized (or subject to provisional attachment) only if the reasons for seizure (or provisional attachment) outweigh the consequent intrusion or other detriment to the suspect or to another adverse interest.
4.1.2.27. United Kingdom Proceedings must be served on any person the enforcement authority thinks has an interest in the property (s243).
Independently of this, parties who obtained an interest in the property in good faith are protected, and other exceptions provided for, in mechanisms outlined in s266 and 304-10.
Victims of crime are protected under s281. The Court considers the evidence of alleged bona fide interest holders in determining whether the enforcement authority has discharged its burden of proving that the property is the proceeds of crime.
Section 281 of the Proceeds of Crime Act 2002 and Article 192 of The Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 gives the claims of a true owner precedence over those of the enforcement authority. Where civil recovery court proceedings have begun in respect of property, a true owner is entitled to request a declaration from the court that he has a valid claim to it because he was deprived of it (or of property which it ‘represents’) by unlawful conduct. The effect of such a declaration is that the property ceases to be recoverable. This exception only applies to the original true owner of property.
The following is an extract from an article entitled ‘Proceeds of Crime Act 2002 – Enforcement’ published by the CPS.
“The role of third parties
Third parties have no right to be heard on a criminal confiscation hearing. The Crown Court will determine the defendant's interest in property held by third parties, whether this property is held jointly, is a tainted gift, or is property otherwise held in the names of third parties. The Court at the confiscation stage is only tasked with determining
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the amount of the defendant's free property, in order to calculate the recoverable or available amount in which to make an order for a sum of money and is not concerned with the property itself. Any determinations as to the defendant's interest at that stage cannot be binding on third parties, as they are not parties to the proceedings (see Re Norris [2001] UKHL 34).
Third party assets may be restrained and/or at the enforcement stage, action may be taken by a receiver to realise property, in which third parties may be claiming an interest. Third parties are entitled to have their claims determined by a court, although not as a part of the confiscation proceedings. Unlike previous legislation, POCA provides that the appropriate court will be the Crown Court.
Resolution of third party interests
The court may order anyone who has possession of realisable property to give it to the receiver and may order anyone who holds an interest in realisable property to pay the receiver the amount of any interest held in the property by the defendant or the recipient of a tainted gift. Once that payment is made, the interest of the defendant or the recipient of the tainted gift in the property is extinguished. Before such orders are made, Rule 60.1 (6) of the Criminal Procedure Rules 2010 require that the defendant or the recipient of the gift must be given notice of the hearing and will, therefore, be able to make representations to the court.
The defendant, or the recipient of a tainted gift, may apply to the court for an order that any property that cannot be replaced should not be sold. Such an order made under section 69(4) POCA may be revoked or varied.
Section 62(3) POCA provides that any person affected by the action or proposed action of a receiver may apply to the Crown Court for an order giving directions as to the exercise of the receivership powers. The court may make such order as it believes appropriate.
Any person affected by an order appointing or giving powers to a receiver may also apply to the Crown Court to vary or discharge the order by virtue of section 63(1)(c) POCA.
Section 69(3) POCA provides that in exercising the powers given to the court and/or to a receiver, the powers must be exercised with a view to allowing a person other than the defendant or a recipient of a tainted gift to retain or recover the value of any interest held by him.
In the case of realisable property held by a recipient of a tainted gift, the powers must be exercised with a view to realising no more than the value for the time being of the gift.
In a case where a confiscation order has not been made against the defendant, property must not be sold if the court so orders under subsection (4).
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The matrimonial home
A confiscation order is an order to pay a sum of money and may be enforced against any property held by the defendant, even if some of that property was legally obtained. Accordingly, the matrimonial home may be seized and confiscated, if the defendant fails to pay. Subject to the operation of section 31 of the Family Law Act 1996, this may result in the eviction of other family members.
The effect of section 69(3)(a) POCA is to reverse the unreported case of Customs and Excise v A (July 22 2002, CA); a case in which it was held that a property adjustment order could be made in family proceedings notwithstanding the provisions of the Drug Trafficking Act 1994.
The court may not, however, order the realisation of any share in the matrimonial home owned by the spouse or partner, unless it can be shown that the share was a tainted gift (see R v Buckman [1997] 1 Cr.App.R.(S.) 325).
It sometimes occurs that the spouse of an offender petitions for divorce and seeks the transfer of the matrimonial home into his or her sole name in ancillary relief proceedings. Where this occurs, it may be necessary for the CPS to seek leave to intervene in the ancillary relief proceedings. The Proceeds of Crime Unit must be consulted whenever intervention is contemplated.”
4.1.2.28. Croatia According to the definition of the article 3 § 1 point 11 of the Law on Procedure on Confiscation of Proceeds of Crime and Offenses, a third party is: the person who claims that he/she has a right on the property, and he asks that the cancellation of the temporary safety measures or the freezing order pertaining to that property.
Therefore, article 18 of the Act on Proceeding of Confiscation of Proceeds of Crime recognises to the Third Party the right to file a complaint against the decision on execution and ask for the measure to be cancelled. The Court that issued the decision on the precautionary measure will assess the complaint. An appeal is possible is possible against this decision within three days of its notification on the party. The appeal doesn’t suspend the execution of that measure.
If the Third party proves his, the court will suspend the execution of the decision on provisory measures.
According to article 558 of the Criminal Procedure Law, the parties who have claims over an affected asset may present their arguments before the court. They have the right to present evidence in order to demonstrate their right in assets or property. If during the
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proceedings, the Court finds out that the concerned property belongs to a third party, it will suspend the proceeding and summon the third party to take part in the proceedings.
Summary
Third parties’ assets may be confiscated where they are somehow associated with the crime or it is alleged that their assets are the proceeds of a crime.
Common features of the Member States Third parties are notified of any decisions that aim at freezing their assets. Third parties have a right to be heard in cases of confiscation of assets that they hold Third parties may appeal confiscation orders concerning their assets.
In general in Member States bona fide third parties are protected against confiscation.
In some countries there is a presumption that third parties are bona fide whereas in others third parties will have to show that they had no knowledge that the assets were related to criminal or illegal activity. In some countries there is a presumption that any property held by a person was legally acquired regardless of their lifestyle. The onus of proving that property was acquired through illicit activity is on the authorities. However, it appears that generally in cases of specific crimes, where the demonstration is made that the income of a person cannot explain their lifestyle, the presumption that the property was legally acquired may fall.
In some countries third parties may always contest a confiscation order in civil proceedings whether or not it originates from another Member State.
4.2. Analysis of the issues
4.2.1. New tools do not negate old ones In recent times many EU countries have adopted new tougher regulations aimed at fighting crime, and in particular in the area of freezing and confiscation orders. In England for
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example the Proceeds of Crime Act dates back to 2002. In Bulgaria a law was adopted in 2012. These acts need to submit to the test of time. The enforcement of these regulations in the UK has created important fundamental rights issues and the Higher Courts of the land have had to remind enforcement agencies and other courts that the due process of law must not be forgotten. As Lord Justice Munby too recently noted in relation to a case of confiscation: “The principle of audi alterem partem, that no man or woman is to be condemned unheard, is one of the oldest rules of our administrative law. It goes back at least four centuries, for it is to be found in Boswel’s Case (1606) 6 Co Rep 48b and Bagg’s Case (1615) 11 Co Rep 93b. If the appellant is right in her denial of knowledge of the hearing, then she has been the victim of a miscarriage of justice, a miscarriage of justice which we would merely be compounding if we did not intervene326.”
The statement is interesting on two aspects. First it shows that basics principles are too easily forgotten with the new powers entrusted to the police and second that for the Lord Justice confiscation is a sanction as he refers to the word “condemn”. Consequently, it is only after a few trials and errors that the balance between the new powers and individuals’ rights will emerge, but in any case whatever a confiscation order may be called, it will need to be treated as a “condemnation” with the procedural protections that come with that.
Whilst mutual recognition is essential in the fight against crime it is important that the initial decisions to freeze and confiscate are made following due process of law and that as little room for error as possible is given and blatant miscarriages of justice.
Courts have highlighted a number of issues pertaining to fundamental rights in a number of Member States in relation to freezing and confiscation orders.
In the UK for example, service of process for a hearing on a forfeiture order is operated by simple first class mail whether the person is in the UK or abroad and the form used is not translated327. The fact that hearings before the courts are delivered by normal postal mail at any address on record gives rise to grave concerns on the effective right to hearings or to challenge confiscation orders. A very recent UK case highlights the issues. In Harrison,
326 Harrison, R (on the application of) v Birmingham Magistrate's Court & Anor [2011] EWCA Civ 332. Available at http://www.bailii.org/ew/cases/EWCA/Civ/2011/332.html
327 Form G pursuant to Section 298 of the Proceeds of Crime Act 2002
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R (on the application of) v Birmingham Magistrate’s Court & Anor [2011] EWCA Civ 332 an appeal was lodged against a decision of the Administrative Court328. The latter court had refused judicial review of the Birmingham Magistrates’ Court decision on a Section 298 of the Proceeds of Crime Act 2002 forfeiture order in relation to a sum of £5000 pounds which had been seized at the appellant’s premises. In her appeal, the appellant argued that she had not received the notice of proceedings. The Court agreed, quashed the forfeiture order on the basis that the notice had not being received. The Court in its conclusion even invited the Lord Chief Justice to “consider an amendment to the Magistrates’ Courts (Detention and Forfeiture of Cash) Rules 2002 to permit a person to show that, notwithstanding ostensible service, the purported recipient had not in fact received notice. Pending any such amendment I would invite Magistrates to be particularly prudent about continuing with an application for a forfeiture order in circumstances like the present in the absence of the person with a claim to the money. If, as in this case, criminal proceedings are still ongoing, it might be thought worthwhile to give notice of the hearing to the solicitors dealing with the criminal case, albeit that those solicitors (as in this case) had not been instructed in the civil proceedings for forfeiture”.
The Court also noted that: “In the present case the magistrate took into account that the appellant was believed to be involved in fraud by false representations. Some six months later the appellant was told that no proceedings would be taken against her for this fraud. It might be thought prudent in a case where the court intends to rely on the fact that the defendant is believed to be involved in a criminal offence to adjourn the forfeiture proceedings until the outcome of any criminal proceedings is known”.
This case was similar to a previous case of 2006329. It seems that the Courts continue to be weary of confiscation/forfeiture actions that, although linked with criminal proceedings, are undertaken in a civil context independently of the criminal proceedings. Lord Justice Pill recalled:
328 Harrison, R (on the application of) v Birmingham Magistrate's Court & Anor [2011] EWCA Civ 332. Available at http://www.bailii.org/ew/cases/EWCA/Civ/2011/332.html
329 R v Payton [2006] EWCA Crim 1226
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“I repeat what I said in similar circumstances in R v Payton [2006] EWCA Crim 1226, at paragraph 31. Liaison between police acting in forfeiture proceedings and the prosecuting authority is essential.”
Even more recently was the UK case of R v Waya330. This is a very important case in which the Court laid down the principle that: the confiscation laws when strictly applied are capable of violating Article 1 of Protocol 1 of the Convention, and the Court can remedy this by substituting a disproportionate confiscation order by a proportionate one.
These cases highlight very current and constant issues, fundamental rights issues, with criminal and non-criminal forfeiture proceedings. They show that recent legislation may have been too broad, its application raising difficulties. They also show that the “law” is not set yet and that case law is slowly shaping it.
Moreover, they highlight that the process of fighting orders can be costly, long and convoluted. Since undoing orders that were taken without due process at a national level is difficult there is no reason to doubt that it would be complicated further at the international level. Thus, it is important that stronger guarantees exist at the international level. Mutual recognition should facilitate the execution of orders but contain specific provisions for challenging orders and obtaining prompt and effective redress where reasonable doubt can be cast on the respect of due process by reference to the national procedures of the receiving Member State. A simple reminder of the Charter of fundamental rights may not be sufficient to reassure or guarantee effectiveness. For this reason the Commission proposal for a Directive includes robust safeguards in Article 8.
4.2.1.1. Remedies In all Member States there exists a right to contest a freezing or confiscation order. Access to an impartial judicial authority is also provided in all Member States. In practice, there were instances where access to a court is denied or were freezing or confiscations orders are made outside trial proceedings. However, judicial review is always possible. In some instances the law limits the power of the judge and as a result the fairness of a trial may be questionable. Under UK law, the judge may be compelled to order confiscation. In other systems confiscation where a conviction is decided, confiscation is automatic.
330 R v Waya [2012] UKSC 51
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Confiscation is basically part of the sentencing process. It is not clear in these instances whether a fair hearing on confiscation is effective or whether the hearing bears on the offence and the confiscation is merely the consequence of the offence. In some Member States, confiscation follows a special procedure whilst in others it is part of the common law process. Delays for appealing freezing and confiscation orders vary from Member State to Member State. In some Member States one only has a few days to appeal.
4.2.1.2. Freezing orders Freezing orders may be appealed is almost all Member States. The delay to appeal a freezing order can be very short in some countries. The person affected by the order may often ask for its revocation at different stages of the investigation and trial especially if new elements are placed into evidence. In general decision makers are required to apply the proportionality principle when deciding on a freezing order.
4.2.1.3. Confiscation orders Confiscation orders may be appealed before an impartial judicial authority in all Member States. A number of recourses exist in many Member States. Some are time limited, others can be used at any point in time. This is the case in Romania for example where four different types of judicial review are possible. One before the criminal court up to ten days after the final hearing and decision, one before the civil court and two extraordinary appeals are possible, one of which is not time limited.
4.2.1.4. Judicial review in Receiving Member State One of the logical consequences of the mutual recognition of decisions principles is that the respect of fundamental rights of the proceedings leading to the decision to confiscate must be ensured by the Requesting Country. As a result the question is whether the subject of the freezing or confiscation order is entitled to allege a violation of his/her rights in the Receiving Country. Logically, only the Requesting State should review the question of fundamental rights. This is the Swedish authorities’ position with the exception that if no judicial review is possible in the Requesting Country, then Sweden will accept to check that due process of law has been upheld. The position is similar for Poland. For the Polish authorities the issue of fundamental rights is to be taken up with the Requesting Country. In theory, the review thus belongs with the Requesting Country.
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One can note here that many issues may occur in the course of confiscation proceedings. A recent UK decision highlights some of these. In Harrison, R (on the application of) v Birmingham Magistrate's Court & Anor [2011] EWCA Civ 332331, the police had seized and then confiscated an amount of £5000 from a person whilst searching her home. She had a “criminal record”. The person was neither charged at the time of the search nor convicted thereafter. However, the police proceeded with a request for the forfeiture of the amount. The person failed to be notified of the forfeiture hearing. During the hearing, the amount was thus forfeited in absentia since the person did not explain where the £5000 originated from. At some point the person was also informed that she would not be charged with any crime. When she learned that her assets had been forfeited without her knowledge, she filed an appeal against the decision but was told that she had missed the appeal deadline (30 days).
Thus, the case that presented itself to the England and Wales Court of Appeal (Civil Division) in 2011 – more than two years after the £5000 had been taken and forfeited – was that of a person who had not been convicted of any offence but in whose house cash was found, cash which was forfeited to the State without that person’s knowledge or a right to be heard. On top of that she had been denied a right to appeal the forfeiture decision by a High Court Judge. The decision of the Court of Appeal in favor of the appellant shows that due process of law is eventually upheld. It restored the appellant into her rights and affirmed that appeal deadlines may be extended where the actions of the prosecutions lead to the appellant missing the deadline. The Court, in its wisdom, made many important statements in respect to due process. One of them, of interest here is as follows: “57. In the present case the magistrate took into account that the appellant "was believed to be involved in fraud by false representations". Some six months later the appellant was told that no proceedings would be taken against her for this fraud. It might be thought prudent in a case where the court intends to rely on the fact that the defendant is believed to be involved in a criminal offence to adjourn the forfeiture proceedings until the outcome of any criminal proceedings is known.” The Court implies that forfeiture proceedings should really be finalised after a conviction is secured.
331 [2011] EWCA Civ 332. Available at: http://www.bailii.org/ew/cases/EWCA/Civ/2011/332.html
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In practice and in general, Receiving courts will still accept to review orders or refuse to enforce orders where there is a chance that fundamental rights might be violated as a result of the enforcement. The main argument put forward by Member States is the `respect of the ne bis in idem principle. Confiscations ordered in absentia may also lead to refusals. In any case, to ascertain whether any rights have or are about to be violated, the Receiving courts will in general grant the person against whom the order is to be enforced a right to challenge enforcement.
Some Member States have not transposed the Framework Decisions and will not likely enforce orders based on mutual recognition. In Greece and Luxembourg for example such decisions will be recognition following the exequatur process. During that process fundamental rights may be argued. Greece as a Party to the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime332 would enforce a confiscation order pursuant to Article 13 of that convention. However, it may also refuse enforcement based on the list of reasons for refusal as under Article 18. The Greek authorities also noted that they would not enforce a decision made in absentia except where the affected person was represented at one stage of the process or exercised some rights of representation prior to the decision. This is important as confiscation orders are sometimes issued following convictions and the affected person may not be there at that stage. However, because a confiscation order involves the evaluation of proceeds and a discussion on what assets are legal and what other assets should be considered as proceeds, from a fundamental rights perspective the presence of the concerned person is essential.
4.2.1.5. Compensation for wrongful confiscation In all Member States compensation is possible for wrongful confiscation. In general if the charges are dropped or the accused is acquitted or conviction quashed, the confiscation amount is automatically transferred back to the person. If the person wishes compensation, he or she must start a procedure. In general, compensation proceedings must be initiated within a specific time period after the decision on the offence. In Slovenia for example the delay is three months following the final decision. All amounts must be transferred back, any damages paid plus any interest obtained from the management of the assets up to the date of restitution and at minimum the legal interest. In some Member States where a confiscation order has been annulled a special application to the Ministry of Justice may be made (i.e. Slovakia).
332 Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, Strasbourg, 8 November 1990. Available at: http://www.conventions.coe.int/Treaty/EN/Treaties/Html/141.htm
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Further, the amount of the confiscation itself can be contested in most Member States during the regular conviction proceedings when the decision is made. In some Member States the contestation on the amount of the confiscation is a special procedure. This is the case in Malta. The application for the revision of the confiscation amount must be made within three months of the final judgment and the Court must deliver its decision within twenty days of receiving the application. In cases of freezing or confiscation orders emanating from other Member States, the Requesting Country is responsible for any damages unless damages were caused by the Receiving Country. However, with complex systems such as the ones that concern compensation, there could be cases where normal procedures cannot apply and compensation is as a result not effective. Remedies for wrongful decisions are not always available in the Member States. The ECHR has sometimes found that adequate remedies were not present. In D.M.T. and D.K.I. v. Bulgaria, the ECHR found, upholding previous findings in other cases against Bulgaria, that Article 13 had been violated in conjunction with Articles 6§1 and 8 and that effective remedies did not exist to redress the situation333. In particular it found that not only no effective remedies existed but that recourse for compensation for the damages suffered was non effective.
333 ECHR, D.M.T. and D.K.I. v. Bulgaria, 29476/06, 24 October 2012. Available at http://hudoc.echr.coe.int/sites/fra/pages/search.aspx?i=001-112437
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Summary The analysis of the different Member States’ legislation and practice show that although new tougher regulations aimed at fighting criminal activities have brought challenges for the protection of fundamental rights most Member States have, through legislative changes or the process of judicial review, met these challenges to guarantee due process of law.
Today many Member States have systems of extended confiscation, non-conviction based confiscation and third party confiscation. Judicial review of these processes shows that in some instances the rights to a fair hearing, to legal aid or to an effective remedy were not respected. But the courts have over time being able to ensure that basic fundamental rights were not undermined as a result of new powers granted to the enforcement agencies in fighting international crime.
From the perspective of mutual recognition of confiscation orders, Member States have highlighted that it is necessary, especially in the context of extended confiscation, non-conviction based confiscation and third party confiscation that effective access to judicial review and remedies are clearly affirmed prior to the implementation of any transfer of asset ownership to a Member State.
4.2.2. Fundamental rights are guaranteed at the EU level In Bosphorus Hava Yollari Turizm ve Ticaret Anonim Sirketi v. Ireland, the ECHR found that protection of fundamental rights afforded by the European Union was in principle equivalent to that of the Convention system334.
The ECHR first noted that the European Union abided in principle with fundamental rights and that, they were a condition of the legality of Community acts. This guarantee was increased by the coming into force of the Charter of Fundamental rights on 1 December 2009. There is thus a presumption that EU acts respect fundamental rights.
334 Bosphorus Hava Yollari Turizm ve Ticaret Anonim Sirketi v. Ireland, 45036/98, 30 June 2005
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However, this is a simple presumption and in Bosphorus Hava Yollari Turizm ve Ticaret Anonim Sirketi v. Ireland, the ECHR went on to analyse the means of monitoring the respect for fundamental rights in the EU.
It notes that individual access to the ECJ is limited and in particular that individuals had no direct access to the ECJ, although individuals could bring an action for damages before the ECJ in respect of the non-contractual liability of the institutions.
Finally, it found that individuals had remedies before their national courts against Member States or other individuals in case of violations of EU laws.
It also found that although the preliminary referral procedure originally provided for in Article 177 of the Treaty, and the Court of Justice’s role was limited to replying to the interpretative or validity question referred by the domestic court, the reply would often be determinative of the domestic proceedings.
Finally, it concluded that although, access to the ECJ is more limited for individuals than that to the ECHR, the supervisory mechanism provided for under EU law provides protection that is comparable to that provided under the Convention.
4.2.2.1. The risk of diverging interpretations Although the ECHR notes that the ECJ provides a supervisory mechanism for European Union law that is comparable to that provided by the Convention, there is nevertheless that risk that ECJ decisions may diverge from those of the ECHR.
The ECJ has rendered a number of decisions on fundamental rights in the context of the European Arrest Warrant most recently. In Stefano Melloni, it concluded that: “[…]Article 4a(1) of Framework Decision 2002/584, as amended by Framework Decision 2009/299, is compatible with the requirements under Articles 47 and 48(2) of the Charter of Fundamental Rights of the European Union. 3. Article 53 of the Charter of Fundamental Rights of the European Union must be interpreted as not allowing a Member State to make the surrender of a person convicted in absentia conditional upon the conviction being open to review in the issuing Member State, in order to avoid an adverse effect on the right to a fair trial and the rights of the defense guaranteed by its constitution.”
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Charter. As a result the fundamental rights provided by the Charter may become maximum rights rather than minimum ones.
The decision of the ECJ may become an issue from a fundamental rights perspective where two norms coexist and there is a contradiction between them. One is a national constitution. The other is a European Regulation. Both have a direct effect on individuals. It could be argued that in a case where fundamental rights are affected and two contradicting norms exist, the more favourable to the individual should apply regardless of whether one is considered to be hierarchically superior.
4.2.3. The Draft Directive: remedies and procedural safeguards
4.2.3.1. The Draft Directive and compliance with EU law The Draft Directive makes clear that in transposing its provisions Member States need to ensure that fundamental rights are protected.
The Draft Directive aims at harmonizing the national regulations whilst ensuring the fundamental rights protection. It seeks to find a balance between security and fundamental rights. This is in conformity with Article 67(1) of TFUE which states that “The Union shall constitute an area of freedom, security and justice with respect for fundamental rights and the different legal systems and traditions of the Member States”335. Beyond this, the protection of fundamental rights is a pre-condition to mutual recognition.
The Tampere conclusions spear-headed work in the area of mutual recognition. These state that: “35. With respect to criminal matters, the European Council urges Member States to speedily ratify the 1995 and 1996 EU Conventions on extradition. It considers that the formal extradition procedure should be abolished among the Member States as far as persons are concerned who are fleeing from justice after having been finally sentenced, and replaced by a simple transfer of such persons, in compliance with Article 6 TEU. Consideration should also be given to fast track extradition procedures, without prejudice to the principle of fair trial. The European Council invites the Commission to make proposals on this matter in the light of the Schengen Implementing Agreement.
335 OJ , C 115/47, 9 May 2008. Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2008:115:0047:0199:en:PDF
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36. The principle of mutual recognition should also apply to pre-trial orders, in particular to those which would enable competent authorities quickly to secure evidence and to seize assets which are easily movable; evidence lawfully gathered by one Member State’s authorities should be admissible before the courts of other Member States, taking into account the standards that apply there.
37. The European Council asks the Council and the Commission to adopt, by December 2000, a programme of measures to implement the principle of mutual recognition. In this programme, work should also be launched on a European Enforcement Order and on those aspects of procedural law on which common minimum standards are considered necessary in order to facilitate the application of the principle of mutual recognition, respecting the fundamental legal principles of Member States.”336
More importantly they contain an important reminder that is highlighted here in times when Governments of the EU are grappling with the economic crisis and tempted to forego basic human rights principles in the face of economic hardship:
“1. From its very beginning European integration has been firmly rooted in a shared commitment to freedom based on human rights, democratic institutions and the rule of law. These common values have proved necessary for securing peace and developing prosperity in the European Union. They will also serve as a cornerstone for the enlarging Union”.
The freezing and confiscation of criminal assets must be performed in a manner that respects fundamental rights. New sweeping powers to seize and confiscate the “proceeds” of crime, must come under heightened scrutiny on matters related to fundamental rights.
In the EU the protection of fundamental rights is ensured by the Member States at their level and based a variety of national and international instruments. The main overall EU principles are those set both in the Charter of fundamental Rights (“Charter”)337 and in the
336 Tampere European Council 15 and 16 October 1999, Presidency Conclusions. Available at: http://www.europarl.europa.eu/summits/tam_en.htm
337 Charter of Fundamental Rights of the European Union, 2007/C 303/01. Available at: http://eur- lex.europa.eu/en/treaties/dat/32007X1214/htm/C2007303EN.01000101.htm
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European Convention of Fundamental Rights (“the Convention”)338. The Charter was given legal status by the Lisbon Treaty, which came into force on 1 December 2009. Article 6 of the Treaty states that the Union recognises the rights, freedoms and principles set out in the Charter, and that it shall have the same legal value as the Treaties. Nevertheless, Article 6 also states that the provisions of the Charter shall not extend, in any way, the competences of the Union as defined in the Treaties. The ECJ has had the opportunity to develop and interpret some aspects of the Charter. The ECHR has for its part developed substantial case law on the issues on the freezing and confiscation of criminal assets by reference to the Convention.
In order to enhance trust between Member States, the Draft Directive, includes minimal guarantees in matters related to the freezing and confiscation of criminal assets.
One notes that the Charter, which is the main reference text on fundamental rights for the ECJ, must comply with the minimum standards set forth in the Convention and the ECHR case law. The Draft Directive marks it attachment to these principles339. It states under recital 18 that: “This Directive respects the fundamental rights and observes the principles recognized by the Charter of Fundamental Rights of the European Union, and notably the right to property, the right to respect for private and family life, the right to protection of personal data, the right to an effective remedy and to a fair trial, the presumption of innocence and the right of defence, the right not to be tried or punished twice in criminal proceedings for the same criminal offence and the principles of legality and proportionality of criminal offences. This Directive has to be implemented in accordance with these rights and principles.”
Taking into consideration that procedures on the freezing and confiscation of assets concern not only suspect and offenders but also third parties who are not the subject of criminal proceedings, the Draft Directive specifically addresses the risks under Recital 19: “The measures provided for in this Directive affect substantially the rights of persons, not only of suspected or accused persons but also of third parties who are not being prosecuted. It is therefore necessary to provide for specific safeguards and judicial remedies in order to guarantee the preservation of their fundamental rights
338http://www.echr.coe.int/NR/rdonlyres/D5CC24A7-DC13-4318-B457-5C9014916D7A/0/Convention_ENG.pdf
339 Proposal for a Directive of the European Parliament and of the Council on the Freezing and Confiscation of Proceeds of Crime in the European Union, COM(2012) 85 final.
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in the implementation of the provisions of this Directive.”
There is a substantial difference in the nature of the EU legal instruments. Directives establish general objectives to be achieved by Member States through national legislation, while Regulations are directly applicable and provide detailed and specific provisions which are the same for all Member States. Accordingly, the text of the Directive itself does not provide detailed rules on all fundamental rights, such as the presumption of innocence, the right to property, the right to respect for private and family life, the right to protection of personal data, the right not to be tried or punished twice in criminal proceedings for the same criminal offence and the principles of proportionality. The Directive requires the Member States to introduce provisions on the right to defense, the right to notice, the right to an effective remedy, the ne bis in idem and the right to a fair trial. The Draft Directive does not as such need to articulate these rights in detail. since Member States, in their implementation of the Directive, are expected to adopt detailed regulations that comply with the Charter and the Convention. The Commission will carefully monitor the implementation of the provisions of the Directive, including those on fundamental rights.
4.2.3.2. The fundamental rights issues that may arise regardless of the provisions of the Draft Directive To highlight on potential issue with the notion of effective remedies, today, in the UK thousands of confiscations are occurring each year. Courts evaluate the proceeds of crime in a business-like manner. Sometimes, courts even over-estimate the profits made from crime as in the decisions leading to the Supreme Court case, R v Waya340. In Waya, a person made a false statement when taking out a loan with a bank341. Effective remedies for wrongful confiscation should lead to amounts that are calculated using the same methods as those used by courts to evaluate the full benefits obtained from the crime. This is not currently the case. As a reminder, in the R v Waya case the court considered that the capital gain obtained by the offender was part of the proceeds of crime342. Thus, remedies for wrongful confiscation should include what the person would have derived
340 R v Waya [2012] UKSC 51
341 The bank held a mortgage on the property and the person paid a deposit for more than one third of the total price. However, making a false statement in order to obtain favourable mortgage terms is a crime in the UK that is susceptible to confiscation. In short, the Supreme Court decided that part of the capital gain should in fact benefit the borrower because of the initial deposit made but that the other part, two thirds) should be confiscated.
342 It should be noted that in its calculation the court does not take into consideration taxes, including capital gains taxes, that were paid or owed as a result of the gains made.
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from the assets had they not been confiscated, including any capital gains. Confiscations can last for many years pending conviction. If the suspect ends up not being convicted and the confiscation terminated, effective remedies should follow. However, if remedies are to fair, they will be calculated generously as the courts have generously calculated the benefits derived from the proceeds of crime. But were remedies are too generous in favour of the wronged person, a strong incentive is created to convict. Hence, if remedies for wrongful confiscation are based on evaluations that are similar to those for evaluating the proceeds of crime, the method of determination of the amount corresponding to the proceeds of crime should be reasonable so that when turned against the State in compensation for wrongful confiscation, the resulting compensation is not so important that it would either deter the State from confiscating or create incentives to ensure that confiscations will always be confirmed.
As the EU legal instrument proposed is a Directive, the right to a fair trial and in particular the rights to appeal decisions are not outlined in detail and nothing is stated as to their timing. In many countries, the right to appeal a freezing or confiscation order is very time limited. A party sometimes has three days to appeal.
Mutual recognition aims at ensuring that “Over time, all confiscation and freezing orders issued by a Member State should be effectively enforced against assets located in another Member State”343. This will require that the Courts of each Member State trust the processes implemented in other Member States fully.
It is difficult to evaluate the necessity for new legislation on mutual recognition today in this area. It does not appear from the statistics collected and the responses made by the Member States on the mutual recognition enforced on the basis of the framework decisions that mistrust on fundamental rights is a major issue. Few refusals on that basis have been made344. Too few even to cite on the scale of the thousands of proceedings initiated every year throughout the EU. In fact, it does not appear that the reason for the very few requests made is related to trust or to refusals. In general, it appears to be related to the lack of resources, time, language and the creation of a systematic approach to requests.
343 COM(2012) 85 final, exposé des motifs p. 3
344 Gisele Vernimmen-Van Tiggelen, Laura Surano, Anne Weyembergh, The future of mutual recognition in criminal matters in the European Union, Ed. de l’Université de Bruxelles, 2009, p. 558.
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4.2.3.3. Are the fundamental rights affirmed in the Draft Directive sufficient for mutual recognition of decisions The Draft Directive contains important provisions on fundamental rights. It articulates some more precisely and others more generally. This is not as such an issue in mutual recognition since few mutual recognition based requests have been refused on the basis of fundamental rights protection of the lack thereof. However, moving forward, if the number of requests does increase with the new capacities given Member States to fight organized crime through tools such as extended confiscation orders, third party confiscation and non-conviction based confiscation, national judges may want to control that fundamental rights have in effect been respected to the same standards as they are in their country. Let it be reminded for example that civil confiscation in the UK following a conviction implies that legal aid may not be available and that in other countries confiscation may be obtained on the basis of a reversal of the burden of proof. Thus, courts requested to enforce such decisions may wish to exercise a degree of scrutiny to ensure that (i) even if legal aid was not available, the confiscation does follow a conviction handed down in a criminal setting where legal aid was in fact available, (ii) a reversal of the burden of proof follows a conviction for the main offence and (iii) that factual elements are in fact taken into account in which the offender may counter by his/her own arguments.
The enforcing court may also ask whether the freezing or confiscation order has been the object of an appeal or whether it has been made in absentia.
With the increase in requests, a minimum of scrutiny might be warranted to ascertain at the least if fundamental rights were not manifestly violated.
Thus, the Draft Directive may need to be supplemented by another instrument specifically tailored to facilitate mutual recognition and overcome the obstacles that may lead to difficulties in transnational enforcements.
4.2.4. Rights protected by the Charter The main relevant rights are protected under Articles 7, 8, 17 and 47 to 50 of the Charter.
Article 17 of the Charter concerns the right to property and the possibility of a justified interference with such right. This is relevant in the context of freezing and confiscation orders as in the former the control over the property is altered and in the latter the ownership of the property is transferred.
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Articles 47 to 50 of the Charter identify procedural rights relevant in the context of mutual recognition and in particular, access to justice, the presumption of innocence, the right of defence, legality and proportionality of criminal offences and penalties and the ne bis in idem principle.
As seen in the comparative study of the legislation and practices of the different Member States, freezing orders can be of limited duration but can also in some countries be in place until the final trial decision. This means that affected persons may not have access to their assets for a very long period of time. Further, in the case of non-conviction based confiscations risks of injustice are enhanced since the standard of proof may be different than that in normal criminal proceedings and the concerned person may be unavailable. To avoid serious risks of injustice every steps must be taken to ensure that affected persons are effectively notified of the processes affecting their assets and have an opportunity to present arguments relevant to the case to the responsible authorities and in particular before an independent and impartial authority.
Article 50 of the Charter States that: “No one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law”.
The European Court of Justice has had the opportunity to review the ne bis in idem principle as under Article 50 of the Charter. In Åklagaren v. Hans Åkerberg Fransson the ECJ345 decided that: “The ne bis in idem principle laid down in Article 50 of the Charter of Fundamental Rights of the European Union does not preclude a Member State from imposing successively, for the same acts of non‑compliance with declaration obligations in the field of value added tax, a tax penalty and a criminal penalty in so far as the first penalty is not criminal in nature, a matter which is for the national court to determine.” This is of interest in confiscation proceedings since they are sometimes, depending on the use made, their nature or their consequences, not part of proceedings leading to a criminal sanction.
This is a particularly important provision in the context of the mutual recognition of freezing and confiscating of criminal assets. Many countries specify that they would
345 ECJ, Hans Åkerberg Fransson, C-617/10, 26 Feb 2013.
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refuse to enforce a confiscation order where the underlying offence has led to an acquittal or for which the offender had already been convicted. However, the question does arise where the confiscation is not linked to the offence per se or is indirectly linked to an offence. In that case an acquittal for the offence may have no effect on a follow-up confiscation.
4.2.5. Procedural safeguards issues identified by the ECHR The main relevant rights are protected under Article 1 of Protocol No.1 and Articles 2, 3 and 4 of Protocol No. 7 to the Convention, and Articles 6, 8, and 13 of the Convention.
4.2.5.1. Property rights Article 1 of Protocol no 1 to the Convention provides: “Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties”.
Article 1 of Protocol No. 1 to the Convention, guarantees in substance the right to property. It comprises three distinct rules346. The first rule as stated by the ECHR is of a general nature and lies in the first sentence of the first paragraph. It affirms the principle of peaceful enjoyment of property. The second rule, expressed in the second sentence of the first paragraph, pertains to deprivation of possessions and makes it subject to certain conditions. The third rule, under the second paragraph, recognises that the Parties to the Convention are entitled to control the use of property in accordance with the general interest. The second and third rules, which point to instances of interference with the right to peaceful enjoyment of property, must be construed in the light of the general principle laid down in the first rule347. The ECHR has been consistent in its jurisprudence on confiscation orders. It considers that even though confiscation involves a deprivation of possessions, it nevertheless constitutes
346 See ECHR, Silickiene v. Lithuania, case no. 20496/02, 10 April 2012.
347 See ECHR, Immobiliare Saffi v. Italy [GC], no. 22774/93, § 44, ECHR 1999-V.
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control of the use of property within the meaning of the second paragraph of Article 1 of Protocol No. 1.348 In terms of the conditions prescribed, the ECHR, has held that an interference with property rights must be prescribed by law and pursue one or more legitimate aims. Additionally, there must be a reasonable relationship of proportionality between the means employed and the aims sought to be realised. A “balance was struck between the demands of the general interest and the interest of the individuals concerned”349.
Although this jurisprudence has been reaffirmed many a time, there are some indications that the ECHR might evolve toward the view that some forms of confiscation are not just about “control of the use of property” but actually concerns an effective deprivation of possessions. It can be argued that here basically lies the difference between freezing/confiscation and confiscation/forfeiture. Freezing orders do in fact refer to control of the use. Confiscation when it means forfeiture cannot mean anything else than deprivation. The true difficulty lies in the distinction between “confiscation” as an extension of a freezing order and “confiscation” as an effective transfer of property. In the case of Raimondo v. Italy, the ECHR states that: “According to Italian case-law, confiscation of the kind which is in issue in this case could not moreover have the effect of transferring ownership to the State until there had been an irrevocable decision (see paragraph 20 above). There was no such decision in this instance because Mr. Raimondo had challenged the order of the Catanzara District Court of 16 October 1985 (see paragraph 13 above). Here too therefore it is the second paragraph of Article 1 (P1-1) which applies”350.
On can deduct that the ECHR would had considered the first paragraph if the forfeiture had been pronounced.
4.2.5.2. Remedies and property rights In Petyo Petkov v. Bulgaria351, the ECHR found that a taxi, belonging to the applicant who was a taxi driver that had been seized for evidence during court proceedings should have
348 See ECHR, Sun v. Russia, No. 31004/02, 5 February 2009.
349 See ECHR, Yildirim v. Italy (dec.), no. 38602/02, ECHR 2003-IV.
350 ECHR, Raimondo v. Italy, 12954/87, 22 February 1994. Available at: http://www.coe.int/t/dghl/cooperation/economiccrime/corruption/projects/car_serbia/ECtHR%20Judge ments/English/RAIMONDO%20v%20ITALY%20-%20ECHR%20Judgment%20_English_.pdf
351 ECHR, Petyo Petkov v. Bulgaria, 32130/03, 7 January 2010.
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been returned after the trial. Bulgaria had thus violated Article 1 of Protocol No. 1 in delaying the return of the taxi by one year and three months given that the taxi was “not merely a means of transport but the main tool of his trade”. It should be noted that the taxi was returned one year and three months after the final decision of the Supreme Cour de Cassation and three years after the first decision acquitting the applicant of the offence.
4.2.5.3. Presumption of innocence The presumption of innocence is an issue in confiscation related matters because in some instances and under some national regulations the presumption does not apply.
4.2.5.3.1. Conviction based confiscation In Phillips v. the United Kingdom352, the ECHR considered that the presumption of innocence as defined under Article 6(2) of the Convention did not apply to conviction- based confiscation where the confiscation was in fact handed down as part of the sentencing process. Where the confiscation is but the consequence of a conviction for a serious crime (drug offences), and where the following conditions are met: 1/ the offender is in possession of assets whose provenance cannot be established, 2/ the assets can reasonably be presumed to have been obtained through illegal activity, and 3/ the applicant has failed to provide a satisfactory alternative explanation for the provenance of the assets, then such assets may be confiscated.
4.2.5.3.2. Confiscation following acquittal In general, Article 6(2) must follow any proceedings linked to an acquittal.
The ECHR case of authority is Sekanina v Austria (1993) 17 EHRR 221. In that case the applicant was tried on a murder charge. He was acquitted. The jury stated that there was no “conclusive evidence” on which to convict him. Subsequently the applicant claimed compensation for the one year detention period during which he was remanded in custody. Under the law he was entitled to compensation if he was acquitted “and the suspicion that he committed the offence is dispelled”. The applicant was refused compensation on the grounds that his acquittal did not dispel suspicion of his guilt. As a result the applicant alleged violation of article 6(2).
352 ECHR, Phillips v. the United Kingdom, No. 41087/98, 12 December 2001. See also ECHR, Van Offeren v. the Netherlands, No. 19581/04, 5 July 2005.
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The ECHR, citing in its ruling the X v Austria case353: “No authority may treat a person as guilty of a criminal offence unless he has been convicted by the competent court and in the case of an acquittal the authorities may not continue to rely on the charges which have been raised before that court but which have been proved to be unfounded. This rule also applies to courts which have to deal with non-criminal consequences of behaviour which has been subject to criminal proceedings. They must be bound by the criminal court’s finding according to which there is no criminal responsibility for the acts in question although this naturally does not prevent them to establish, eg a civil responsibility arising out of the same facts.” agreed that article 6(2) did apply but also considered that the application of 6(2) depended on a link between the criminal proceedings and the compensation proceedings. On the Austrian court’s refusal to compensate on the basis that there remained some suspicion that the applicant was not innocent, the ECHR further considered that: “Such affirmations – not corroborated by the judgment acquitting the applicant or by the record of the jury’s deliberations – left open a doubt both as to the applicant’s innocence and as to the correctness of the Assize Court’s verdict. Despite the fact that there had been a final decision acquitting Mr Sekanina, the courts which had to rule on the claim for compensation undertook an assessment of the applicant’s guilt on the basis of the contents of the Assize Court file. The voicing of suspicions regarding an accused’s innocence is conceivable as long as the conclusion of criminal proceedings has not resulted in a decision on the merits of the accusation. However, it is no longer admissible to rely on such suspicions once an acquittal has become final. Consequently, the reasoning of the Linz Regional Court and the Linz Court of Appeal is incompatible with the presumption of innocence.” The ECHR confirmed this in Rushiti v Austria354: “The Court cannot but affirm the general rule stated in the Sekanina judgment that, following a final acquittal, even the voicing of suspicions regarding an accused’s innocence is no longer admissible. The Court, thus, considers that once an acquittal has become final - be it an acquittal giving the accused the benefit of the doubt in accordance with article 6(2) - the voicing of any suspicions of guilt, including those expressed in the reasons for the acquittal, is incompatible with the presumption of innocence.”
353 ECHR, X v Austria (1982) 30 DR 227
354 Rushiti v Austria (2000) 33 EHRR 1331
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This is confirmed in other ECHR decisions355.
It is clear however as stated in Y v Norway that nothing would prevent a victim from seeking compensation in a civil proceedings: “Thus, the Court considers that, while the acquittal from criminal liability ought to be maintained in the compensation proceedings, it should not preclude the establishment of civil liability to pay compensation arising out of the same facts on the basis of a less strict burden of proof”.
However, the ECHR does appear to distinguish between post-acquittal situations where the State and those where a private party (the victim) is involved. In Hammern v Norway356, the applicant sought, after having been acquitted on charges of sexual abuse of minors, compensation for the time during which he had been remanded in custody. Under article 444 of the Code of Norvegian Criminal Procedure the applicant was entitled to compensation “if it is shown to be probable that he did not carry out the act that formed the basis for the charge.” The ECHR held that although the compensation proceedings did not give rise to a “criminal charge” the link between the compensation proceedings and the criminal proceedings had the consequence of bringing the former “within the scope” of article 6(2)357. Importantly, the Court held that it was significant that the proceedings engaged the responsibility of the state, not a private party358. It went on to give the following reasons for holding article 6(2) to be applicable: “45. …Moreover, unlike in criminal proceedings – where it was for the prosecution to prove beyond reasonable doubt that the defendant had committed the incriminated act - in a compensation case of the present kind it was for the acquitted person to show that, on the balance of probabilities, it was more than 50% probable that he or she did not carry out the act grounding the charge. Leaving aside this difference in evidentiary standards, the latter issue overlapped to a very large extent with that decided in the applicant's criminal trial. It was determined on the basis of evidence from that trial by the same court, sitting largely in the same formation, in accordance with the requirements of article 447 of the Code.”
355 See Ringvold v Norway (Application No 34964/97) (unreported) 11 February
2003 and Y v Norway (2003) 41 EHRR 87
356 Hammern v Norway (Application No 30287/96) (unreported) 11 February 2003
357 At paragraph 42.
358 At paragraph 44.
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As a result, the ECHR jurisprudence points to three principles: 1/ An acquittal implies that no suspicion should be voiced or assessment of guilt should be undertaken anew with respect to the same facts and that the presumption of innocence should be respected in related proceedings, 2/ Nothing prevents the victim from obtaining compensation in civil proceedings arising from the same facts, And there is an indication that 3/ Should the State be involved in other proceedings relating to the same facts against the applicant the presumption of innocence would have to be respected and the consequences of the new proceedings should not be the equivalent of a retrial of the applicant.
The above stated principles were applied in a recent case involving a confiscation that was enforced following an acquittal. In Geerings v. The Netherlands, the ECHR argued that: “47. The Court considers that “confiscation” following on from a conviction – or, to use the same expression as the Netherlands Criminal Code, “deprivation of illegally obtained advantage” – is a measure (maatregel) inappropriate to assets which are not known to have been in the possession of the person affected, the more so if the measure concerned relates to a criminal act of which the person affected has not actually been found guilty. If it is not found beyond a reasonable doubt that the person affected has actually committed the crime, and if it cannot be established as a fact that any advantage, illegal or otherwise, was actually obtained, such a measure can only be based on a presumption of guilt. This can hardly be considered compatible with Article 6 (2) (compare, mutatis mutandis, Salabiaku v. France, judgment of 7 October 1988; Series A no. 141-A, pp. 15-16 § 28).”
Confiscation decisions prior to a conviction or post-acquittal may thus run afoul of Article 6(2). They may highlight a presumption of guilt where there is no conviction, in the criminal sense, and no advantage was obtained. As stated by the ECHR in the context of the confiscation ordered in Geerings v. The Netherlands: “50. The Court of Appeal’s finding, however, goes further than the voicing of mere suspicions. It amounts to a determination of the applicant’s guilt without the applicant having been “found guilty according to law” (compare Baars v. the Netherlands, no. 44320/98, §31, 28 October 2003.”
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4.2.5.4. The ne bis in idem principle Protocol No 7 to the European Convention359, contains an Article 4 on the “Right not to be tried or punished twice”. The Article reads as follows: “1. No one shall be liable to be tried or punished again in criminal proceedings under the jurisdiction of the same State for an offence for which he has already been finally acquitted or convicted in accordance with the law and penal procedure of that State. 2. The provisions of the preceding paragraph shall not prevent the reopening of the case in accordance with the law and penal procedure of the State concerned, if there is evidence of new or newly discovered facts, or if there has been a fundamental defect in the previous proceedings, which could affect the outcome of the case. 3. No derogation from this Article shall be made under Article 15 of the [European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950; “the ECHR”].”
After a confusing case law on the principle, the ECHR, in the Zolotukhin case360, devises an approach to the ne bis in idem principle that reconciles it with the case law of the CJEU, both in competition matters as well as in the context of the Convention implementing the Schengen Agreement (“CISA”). The ECHR states that: “the approach which emphasises the legal characterisation of the two offences is too restrictive on the rights of the individual, for if the Court limits itself to finding that the person was prosecuted for offences having a different legal classification it risks undermining the guarantee enshrined in Article 4 of Protocol No. 7 rather than rendering it practical and effective as required by the Convention (…). Accordingly, the Court takes the view that Article 4 of Protocol No. 7 must be understood as prohibiting the prosecution or trial of a second “offence” in so far as it arises from identical facts or facts which are substantially the same.(…)The Court's inquiry should therefore focus on those facts which constitute a set of concrete factual circumstances involving the same defendant and inextricably linked together in time and space, the existence of which must be demonstrated in order to secure a conviction or institute criminal proceedings.”
359 signed in Strasbourg on 22 November 1984
360 ECHR, Sergey Zolotukhin v. Russia, 10 February 2009 at paragraphs 81-84.
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The triggering event for the ne bis in idem principle lies in the existence of a prosecution for a first criminal offence. Issues arise when an offence is not classified as criminal in a Member State. This is important in the context of freezing and confiscation orders as they may be taken absent a “criminal offence” pursuant to the legislation of some Member States. However, regardless of the legal characterisation of the procedure under national law361, the ECHR has devised a test aimed at determining whether a procedure, decision and its effects are criminal in nature362. In the Engel and others v. The Netherlands case the ECHR devised a three criteria based test to determine the existence of a “criminal charge”. This is commonly referred to as the Engel criteria363. The first criterion relates to the legal classification of the offence under national law. The second concerns the very nature of the offence. The third criterion refers to the degree of severity of the penalty that the person concerned risks incurring. The Court considers that the second and third criteria are alternative and not necessarily cumulative364.
4.2.5.5. The nemo tenetur se ipsum accusare The right to remain silent or more precisely not to self-incriminate is firmly entrenched in some countries and less so in others. The ECHR has recognized it to a certain extent in the Convention. ECHR cases of interest are Fuken v. France365 and Saunders v. United Kingdom. In some confiscation proceedings because the burden of proof is reversed, silence means confiscation. Although, the issue of the reversal of the burden of proof has been put to the ECHR in the past, the issue of a confiscation that occurred based on the person’s wish to remain silent before a conviction has not yet been put to the test.
It is a principle that will need to be reviewed in light of non-conviction based confiscations.
361 See ECHR, Storbråten v. Norway (dec.), no. 12277/04, 2007.
362 See ECHR, Haarvig v. Norway (dec.), no. 11187/05, 11 December 2007.
363 See ECHR, Engel and Others v. the Netherlands, 8 June 1976, § 85, Series A no. 22.
364 See ECHR, Ezeh and Connors v. the United Kingdom [GC], nos. 39665/98 and 40086/98, §§ 82-86, ECHR 2003‑ X.
365 ECHR, Fuken v. France, 25 February 1993. Available at http://hudoc.echr.coe.int/sites/fra/pages/search.aspx?i=001-57809 . ECHR, Saunders v. United Kingdom, 29 November 1996. Available at http://echr.ketse.com/doc/19187.91-en-19961217/view/
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Summary
Over the last thirty years an important number of cases involving the freezing and confiscation of assets has been brought before the ECHR. The ECHR has devised a number of tests to assess the whether specific fundamental rights principles have been violated by the enforcement of confiscation regulations. In general, the ECHR considers that freezing and confiscation regulations comply with fundamental rights. It has noted issues however with some procedures and the effectiveness of remedies.
However, if Member States have to ensure that they comply with Convention principles, the EU itself should be concerned with the Charter. As stated by the ECJ366: “As regards, first, the conclusions to be drawn by a national court from a conflict between national law and the ECHR, it is to be remembered that whilst, as Article 6(3) TEU confirms, fundamental rights recognised by the ECHR constitute general principles of the European Union’s law and whilst Article 52(3) of the Charter requires rights contained in the Charter which correspond to rights guaranteed by the ECHR to be given the same meaning and scope as those laid down by the ECHR, the latter does not constitute, as long as the European Union has not acceded to it, a legal instrument which has been formally incorporated into European Union law. Consequently, European Union law does not govern the relations between the ECHR and the legal systems of the Member States, nor does it determine the conclusions to be drawn by a national court in the event of conflict between the rights guaranteed by that convention and a rule of national law (see, to this effect, Case C-571/10 Kamberaj [2012] ECR I-0000, paragraph 62)”.
The Charter would apply to the implementation of the Draft Directive or any EU instrument on mutual recognition of freezing and confiscation orders.
366 See ECJ Case C‑ 617/10, Åklagaren v Hans Åkerberg Fransson, 26 February 2013, Paragraph 44.
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4.3. Concluding Remarks As shown in this Chapter Member States have put in place systems of freezing and confiscation of criminal assets that comply with fundamental rights. Fundamentally, the ECHR has had more issues with the process of enforcing freezing and confiscation orders than with substantial regulations. The Draft Directive allows for extended confiscation and third party confiscation both of which already exist in a number of Member States and have been reviewed from one perspective or another by the ECHR.
As noted the main issues lie less in the substantive law than in the procedures and processes. In particular, there are important fundamental rights issues where criminal and civil procedural processes are intertwined and in particular in the context of civil non- conviction based confiscation as noted in Payton, R v [2006] EWCA Crim 1226 (26 May 2006)367. The Court observed that "it is highly undesirable that civil proceedings for forfeiture [in the magistrates' court] should take place before or concurrently with criminal proceedings”. It concurred with defence counsel that “there is a real potential unfairness for a defendant to be put in the position of giving evidence on oath about matters which could affect his criminal trial before his criminal trial takes place. If the defendant chooses not to give such evidence, it might well result in forfeiture of cash seized before his criminal trial has concluded, or even started".
This section provide an in depth analysis of the process and case law in the UK. The UK is not representative of the whole of the EU. However, since the EU is moving towards more stringent regulations on the freeing and confiscation of criminal assets and countries are pondering on whether to adopt in rem or hybrid systems of confiscation it was deemed useful to analyse the UK experience and show how complex the issues have become and how the courts have had to fine tune their reasoning in order to ensure the effectiveness of the new regulations on crime fighting whilst preserving the rights of individuals.
Clearly, the right to remain silent afforded in the context of criminal proceedings is negated by the existence of civil or pre-trial proceedings where remaining silent will likely lead to confiscation and forfeiture since the onus of proving that the assets were not ill- gotten is basically on the defendant.
This issue had not been resolved in 2011 and the same judge points to it again in Harrison, R (on the application of) v Birmingham Magistrate's Court & Anor [2011] EWCA Civ 332.
367 Available at http://www.bailii.org/ew/cases/EWCA/Crim/2006/1226.html
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Further, in the 2006 case, the Court pointed to another issue in civil settings in that “The defendant is unlikely to be in receipt of public funding in the civil proceedings”. In effect, although the impact of confiscation can be deprivation or property and freedom (by the use of imprisonment in default), the right to legal aid is not guaranteed as the proceedings are civil.
The above noted issues highlight how civil non-conviction based confiscation may affect fundamental rights if adequate safeguards are not in place. Firstly, because in the non- criminal setting these rights may not be recognized in the same manner as in the criminal setting. The standard of proof is different. There may be no legal aid. Secondly, because the non-criminal setting may be used to obtain a conviction in the criminal proceedings by negating the right to remain silent.
As shown above the Courts in the UK fulfil their roles appropriately. However, the obiter dictum of the court also shows that there is nothing that the court can precisely do about the state of the law or the process that has occurred prior to its decision. It takes years and resources to obtain satisfaction before the courts and even more so when confiscations are ordered in more than one Member State. If undoing a wrongful confiscation is difficult in one Country, it might be even more difficult in a multitude of Member States. As a result, multiple country confiscations should be organized in such a way that they are implemented with care and can be undone promptly where necessary.
5. CHAPTER 5: Effectiveness of the present system
The statistical information provided below may only be used to highlight trends. In many Member States the gathering of information is either non-existent or so decentralised that it is virtually impossible to obtain complete datasets. In other countries, the methodology for collecting information is too broad to enable a differentiation between the different types of requests made. Finally, in countries were statistics do exist, the variations in the presentation of datasets between such countries mean that even there the statistical results are only approximate.
However, in terms of trends it is possible to draw conclusions from the information gathered in the course of this study. All national authorities were contacted and interviewed and general information and numbers were obtained.
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The present system is showing signs of a positive evolution. In the last years significantly more freezing and confiscation orders have been either transmitted or received by Member States. This is probably due to an increased focused on organized crime and on criminals who have assets. However, even if there has been more use of the mutual recognition tools that use remains limited. Less than 45 orders transmitted is very small and far in terms of amounts for the assets that many governments allege that the criminals enjoy.
5.1. Decisions to freeze and confiscate criminal assets The number of decisions are shown below.
5.2. Appeals against decisions to freeze and confiscate criminal assets and remedies Appeals against decisions to freeze or confiscate criminal assets have been relatively small; reaching barely 10 percent of decisions. However, it should be noted that in countries such as the UK were confiscation has become a tool routinely used by authorities, appeals are extremely common.
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Index base = 100 (2007)
5.3. Criminal orders to freeze criminal assets transmitted to other Member States Based on the answers provided by the different Member States, it seems that, over the last three years, there has been an important increase in criminal orders to freeze criminal assets transmitted from one Country to another. Overview even if the increase is important, given that the starting point in 2007 was next to nil, the numbers remain small.
The implementation rate of freezing orders transmitted from one Country to another is good at 75%.
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5.4. Criminal orders to confiscate criminal assets transmitted to other Member States (conviction and non-conviction based) In a trend that mirrors that in the field of freezing orders, confiscation orders transmitted from one Country to another have increased significantly in 2010/2011 by comparison to the preceding years.
5.5. Criminal orders to freeze criminal assets received from other Member States Again the years 2010/2011 have been important for orders to freeze criminal assets received from other Member States. Interestingly however, the progression seems to be smoother overtime than in the case of transmissions.
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Index base = 100 (2007)
The number of freezing orders transmitted by one Member State to another has risen dramatically in the years 2010-2011.
Index base = 100 (2007)
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The trend towards an important increase in freezing orders transmitted from one Member State to the other is confirmed from the receiving end. However, it appears that fewer freezing are received than are transmitted. This discrepancy can be explained by the fact that in general the reception of orders makes a distinction between frozen and confiscated orders whereas the transmission does not so much as to distinguish between the two.
Index base = 100 (2007)
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It appears that the number of civil based order to confiscate assets has increased. However, it should be noted that the information provided relates to any civil order including those that follow a criminal conviction. This is relevant in cases where a person is convicted for a crime and the process for implementing the confiscation based on the conviction is civil rather than criminal.
Summary
A uniform system for collecting data on confiscation and freezing orders including on those transmitted from one Member State to another does not exist. In some case no system at all exists. From the information that was gathered during the course of this study, it was possible to identify general trends across the EU. In particular the year 2010 seems to mark an important step use of tools relating to the mutual recognition of freezing and confiscation orders. Increased numbers of orders were transmitted from one Member State to another. However, although the number of requests has increased, it remains very small by comparison to the number of national proceedings initiated to fight criminal activities
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and the use commonly made by criminals of the freedom of movement principles to hide assets.
6. Conclusions
The following conclusions and suggestions are based on the analysis provided above, interviews, research conducted, the Draft Directive and the Council General Approach. It should be stated that a complete analysis of the Council General Approach was not conducted as it was not the subject of this Study.
6.1. Identification of recent changes, evolutions and proposed changes Temporary deprivation of freedom, unless it can easily become life-long as is the case in the United States with an unlimited potential accumulation of life sentences for similar but legally distinct offences, neither adequately punishes nor deters organized criminals. To criminals, the enjoyment - for them and their family - of substantial profits, and the use of such ill-acquired wealth not only to continue their deeds but also to enhance their social status, hide their activities in off-shore centres and hire armies of lawyers and consultants to defer and sometimes avoid sanction are as many arguments in favour of the pursuit of their endeavours.
Even if arrested and convicted, offenders or their family may continue to enjoy the proceeds of their crime for their personal use and for maintaining their criminal operations.
Measures aimed at removing access to ill-gotten gains may destroy crime’s appeal. The realization of the necessity to take practical measures to keep offenders from profiting from their crimes is fairly recent.
Member States now have confiscation regimes that provide for the identification, freezing, seizure and confiscation of illicitly acquired funds and property.
Over the last fifteen years, specific international and European cooperation mechanisms have been put in place to enable countries to give effect to foreign freezing and confiscation orders.
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However, significant variation exists in the methods and approaches employed in the different legal systems.
Today some Member States continue to opt mainly for a property-based system, whilst others have chosen for a value-based system, with some combining the two. Property- based systems only allow confiscation of property when that is found to be proceeds or instrumentalities or criminal activities. The more flexible value-based systems allow the determination of the value of proceeds and instrumentalities of crime and the confiscation of an equivalent value. Some States only allow for value confiscation under certain conditions (for example, the proceeds have been used, destroyed or hidden by the offender) and for specific offences (for example drugs related). However, this Study shows that the variation is never a cause or ground for a refusal to enforce a confiscation order based on mutual recognition.
Further, in some countries such as the UK, confiscation is an effective sanction that can be unrelated to the actual benefit of criminal activity368, lead to multiple confiscations for the same sought amount369, and/or can translate into prison time and that sometimes even amounts to more than the actual prison time awarded as a sanction for the main offence370. In other countries, confiscation is mainly a “precautionary measure” that aims not at sanctioning but rather at preventing further criminal activity.
Some countries have adopted a non-conviction based confiscation system and in those that have the systems are very different ranging from an in rem regime to an in personam one.
In some countries, confiscation is routinely used whilst in others it is seldom used. In some countries any “unlawful” act may lead to confiscation of assets used and derived directly or indirectly from the act. In other countries only serious crimes can lead to confiscation.
Such variations can affect the enforcement of confiscation orders in the mutual recognition setting. Such variations alter the nature of the confiscation itself. In some
368 See in R v Neuberg [2007] EWCA Crim 1994. Clive Neuberg had traded under a prohibited name contrary to the Insolvency Act 1986. The benefit of his criminal conduct was determined as the gross turnover of the company for the relevant period, not the net profit.
369 In R v Farquhar [2008] EWCA Crim 806, the defendant obtained £26,000 in benefits dishonestly but repaid the total amount due. However, in confiscation proceedings the court had to make an order for the total amount again unless either there were insufficient realisable assets or there was an abuse (an indication by the Crown that no confiscation order would be sought).
370 See http://www.publications.parliament.uk/pa/ld200708/ldjudgmt/jd080514/may-2.htm
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instances confiscation is not seen as a penalty whilst in others it is clearly one. Whether or not it is a penalty is essential in order to determine the procedural rights and remedies that are afforded those targeted by the measures.
In R v. Mulholland the UK Court set a prison term of 5 years if the offender, in a road fuel duty evasion offence, should fail to pay the amount of £550,000 set forth in the confiscation order within 6 months371. In R v Castillo, the UK Court added a 10 year imprisonment sentence to be served consecutively to the sentence for the offence unless the defendant paid the full amount of the confiscation order which was £3 million for VAT fraud372. Confiscation in these cases is considered a penalty as it is part of the sentence. In the case of Jamil v. France373, the ECHR held that imprisonment in default constitutes a penalty and where such imprisonment is added on to the main sentence it should be considered a separate detention for purposes of Article 5§4. The ECHR stated that: “30. The Court reiterates that the word "penalty" in Article 7 para. 1 (art. 7-1) is autonomous in meaning. To render the protection afforded by Article 7 para. 1 (art. 7-1) effective, the Court must remain free to go behind appearances and assess for itself whether a particular measure amounts in substance to a "penalty" within the meaning of this provision (art. 7-1) (see, as the most recent authority, the Welch v. the United Kingdom judgment of 9 February 1995, Series A no. 307-A, p. 13, para. 27). 31. The wording of Article 7 para. 1 (art. 7-1), second sentence, indicates that the starting-point in any assessment of the existence of a penalty is whether the measure in question is imposed following conviction for a "criminal offence". Other factors that may be taken into account as relevant in this connection are the characterization of the measure under national law; its nature and purpose; the procedures involved in the making and implementation of the measure; and its severity (see the Welch judgment previously cited, p. 13, para. 28). 32. The Court notes that the sanction imposed on Mr Jamil was ordered in a criminal-law context - the prevention of drug trafficking. It observes, however, that in France imprisonment in default is not confined to this single, ordinary-law field. As it is a means of enforcing the payment of debts to the Treasury other than
371 R v Mulholland [2011] EWCA Crim1546. Pursuant to the Criminal Justice Act 1988 (as amended), this is based on a sliding scale of imprisonment in default payment proportionate to the amount of the order. The maximum prison term is seven days for a £200 order and up to 10 years where the amount exceeds £1 million.
372 R v Castillo [2011] EWCA Crim3173.
373 ECHR, Jamil v. France, 8 June 1995, § 30, Series A no. 317‑ B. Available at http://hudoc.echr.coe.int/sites/eng/pages/search.aspx?i=001-96457#{"itemid":["001-96457"]}
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those partaking of the nature of civil damages, it can also be attached to penalties for customs or tax offences, among others. In order to determine how imprisonment in default should be classified for the purposes of Article 7 (art. 7), it is therefore necessary also to ascertain its purpose and the rules which govern it. The measure in question is intended to ensure payment of fines, inter alia, by enforcement directed at the person of a debtor who cannot prove his insolvency, and its object is to compel such payment by the threat of incarceration under a prison regime. This regime is harsher than for sentences of imprisonment under the ordinary criminal law, mainly because it is not attenuated as they are by such measures as parole or pardon. Imprisonment in default is a survival of the ancient system of imprisonment for debt; it now exists only in respect of debts to the State and does not absolve the debtor from the obligation to pay which led to his committal to prison. Although he can no longer thereafter be compelled to pay by means directed against his person, his goods are still subject to distraint. It is not a measure which can be likened to the seizure of movable or immovable property referred to by the Government. The sanction imposed on Mr Jamil was ordered by a criminal court, was intended to be deterrent and could have led to a punitive deprivation of liberty (see, mutatis mutandis, the Engel and Others v.the Netherlands judgment of 8 June 1976, Series A no. 22, p. 35, para. 82, and the O ztu rk v. Germany judgment of 21 February 1984, Series A no. 73, p. 20, para. 53). It was therefore a penalty within the meaning of Article 7 para. 1 (art. 7-1) of the Convention.”
But the concepts are complex. In the Jamil case the French Court de Cassation had concluded374 : “In so deciding, the Court of Appeal applied the law correctly. Imprisonment in default is indeed a means of enforcement, not a penalty, and procedural provisions such as those relating to enforcement of penalties are applicable immediately to situations that already existed when the provisions came into force”.
Indeed, the level of protection of fundamental rights varies depending on the situation, the procedure and context in which a decision is made. These are situations that are not always clear. In the context of confiscations related to the proceeds of crime, where confiscation is not part of a sentence it is not considered a penalty and different rights and obligations may apply.
374 Cour de Cassation 18 Juillet 1989.
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Other differences in the scope of confiscations exist and relate to the type of offences or the nature and situation of the affected person. In some countries the prior conviction of an offender, whether the affected person is dead or has absconded will affect the scope of possible a confiscation. In other countries the standards of proof differ, especially where civil based or in rem confiscations are possible. Finally, third parties that can be collaterally affected by confiscation orders may be treated differently whether they are part of the family, creditors, mortgagees, the tax authorities or even employees of the potential offender.
These variations affect the efficiency of mutual recognition. This Study shows that in some Member States, there is a reluctance to enforce orders based on in rem jurisdiction or even to systematically enforce confiscations as these are seen as imposing a sanction on top of another sanction for the same offence375. Courts are especially cautious with non- conviction based confiscation orders or confiscation orders that are effectively sanctions as in the UK. Finally, many Member States answered that for them to enforce as a receiving State would necessitate that the offence, which is the basis for the confiscation, would also need to be an offence that could generate a confiscation in their own legal system.
The need for integration and the beginnings of a more focused approach is clear. To this end, the European Commission proposes a harmonization of substantive rules.
Most Member States interviewed considered that the Draft Directive would be helpful in mutual recognition.
As stated before, as criminals frequently seek to hide proceeds and instrumentalities of crime in multiple countries, as well as evidence relating thereto, in order to remain discreet and thwart law enforcement efforts to locate and gain control over them, the necessity for enhanced and seamless cooperation between Member States is paramount. Specific tools for mutual recognition may be needed alongside the Draft Directive.
6.2. The 12 March 2012 Directive Proposal and mutual recognition The establishment of a basic regime for domestic freezing, seizure and confiscation of criminal assets is a prerequisite for international cooperation in fighting cross-border organized crime. This is the main objective pursued by the Draft Directive.
375 See the interesting case of United States v. $124,700 in U.S. Currency. Available at http://www.ca8.uscourts.gov/opndir/06/08/053295P.pdf
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The Draft Directive is a necessary stepping stone in the preparation for a new tool on mutual recognition of freezing and confiscation orders.
6.3. The need for a Directive on freezing and confiscation The push to increase pressure on organized crime make it necessary for the EU to equip itself with tools that are recognized for their efficiency. Extended, third party and non- conviction based confiscations are such tools. They have demonstrated their efficiency in countries that were plagued for decades by violent criminal organisations, such as Italy and the UK.
Thus, the adoption of a Directive that would at minimum provide that all Member States have such tools would help enhance the fight against criminal activities across the EU, where criminals are able to take advantage of less stringent legislation in some countries to hide their assets.
In quite a few countries new regulations incorporating these tools were adopted in 2011 and 2012. In others, such as the UK although new far-reaching law dates back to 2002 (entry in force 2003), it is only in the last two years and a stream of case law from the Supreme Court, that it is starting to settle into a piece of working legislation. Thus, if freezing and confiscation is now a feature in all Member States, extended, criminal non-conviction based and third party confiscations exist in many Member States. The Draft Directive will bridge the gap between countries. The Draft Directive will not and does not have as its objective to solve all problems relating to the confiscation of criminal assets. It requires the Member States to adopt the tools afore mentioned whilst respecting fundamental rights. Member States will need to adopt legislation that transpose the Directive and pay particular attention to the consequences on fundamental rights of the newly adopted laws. In any case, before the reach of confiscation extends beyond national borders, each newly adopted law may undergo a process of teething through the judicial systems. Courts clarify the issues and enhance legal certainty.
Although the Draft Directive is an important tool, Member States authorities have also noted that the adoption of new tools should be accompanied with increases in resources to implement them efficiently. They also noted that any instrument on mutual recognition would require that special attention be paid to the language barrier. In the absence of a
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EU common language, it is necessary that important investments are made into ensuring that misunderstandings are avoided through the inability to communicate.
The Draft Directive includes an essential dimension. It requires Member States to generate statistics on enforcement. Even if Member States authorities have stated that they do not currently have the resources to develop statistics generation systems, the availability of statistical information is essential to evaluate the tools that are implemented to fight crime and determine the need for new tools.
From the information and data collected under this Study it is apparent that the number of freezing and confiscations orders is very important in the countries that use the tools. However, few orders are transmitted using the existing mutual recognition tools. It does not appear, from the statistics collected and the responses made by the Member States on the orders enforced on the basis of the Framework Decisions, that mistrust is at issue. Few refusals on that basis have been made376, too few even to cite on the scale of the thousands of proceedings initiated every year in each of the Member States. In fact, it does not appear that the reason for the very few requests made is related to trust or to refusals. In general, the few requests made are more a consequence of the fact that in some Member States the cross-border cooperation on freezing and confiscation of the proceeds of crime is still a relatively new phenomenon. In countries where the internal procedures for freezing and confiscation orders have been modified to facilitate their implementation the results have been extremely positive. This is the case in England for example which saw an important increase in freezing and confiscation orders after major organizational changes took place in the enforcement agencies.
Thus, the Draft Directive is needed to ensure that the Member States are equipped with the most effective substantive tools for fighting criminal activities. Member States would also need at their national levels organizational reforms to ensure that these tools are effective. At the EU level, instruments are necessary to ensure mutual recognition.
6.3.1. The ambiguities created by the Council General Approach A Directive on substance can have a positive impact on mutual recognition where it eliminates important variations, simplifies processes and clarifies the law. However, the Council General Approach377 creates ambiguities that may result in affecting mutual
376 Gisele Vernimmen-Van Tiggelen, Laura Surano, Anne Weyembergh, The future of mutual recognition in criminal matters in the European Union, Ed. de l’Université de Bruxelles, p. 558.
377 New Draft of 3 December 2012. Page 448 of 477
recognition. As stated before, under the new proposed Article 3, confiscation is “subject to a final conviction for a criminal offence”. The creation of a conditional sentence with no reference to time creates the ambiguity. In effect, a civil confiscation to be confirmed by a conviction at a later stage would be perfectly valid under the Council General Approach. The Draft Directive is clearer in that the confiscation occurred “following” a conviction. The Council General Approach transforms the exception provided under Article 5 into a principle. It implies that confiscations can be ordered at any stages of the inquiries or proceedings provided that it is at one point validated by a conviction or that it concerns a permanently ill or absconding offender.
If this interpretation is possible, it would also mean that confiscations can be ordered by police officers or prosecutors rather than by judicial authorities. Nothing in the text of the Council General Approach states the type of authority that can order a confiscation. There is specific language used for freezing orders under Article 7 but none under Article 3. The reason for this is that it was clear under the previous draft that a conviction was required to confiscate. The language was slightly altered in the latest draft - “subject to” replacing the clear and unambiguous “following” - without regards for the possible interpretations or consequences.
6.3.2. The legal basis for the Draft Directive The main legal basis for the Draft Directive is Article 83(1) of the Treaty on the Functioning of the European Union (TFEU)378, which allows Directives to be adopted prescribing minimum rules for "sanctions in the areas of particularly serious crime with a cross-border dimension resulting from the nature or impact of such offences or from a special need to combat them on a common basis". Given the need to also harmonise procedural safeguards in order to respect fundamental rights, Article 82(2) is also indicated as a legal basis379. This provision allows Directives to be adopted setting out minimum rules in specific areas of criminal procedure (such as the rights of the individuals) "to the extent necessary to facilitate mutual recognition of judgments and judicial decisions and police and judicial cooperation in criminal matters having a cross-border dimension ".
378 Consolidated Version of the Treaty on the Functioning of the European Union art. 290, 2008 O.J. C 115/47, at [1]. Available at : http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2010:083:0047:0200:en:PDF
379 See Section 2.3 of the European Commission Explanatory Memorandum in the Draft Directive; COM(2012) 85 final. See also the latest proposal as provided by the European Council on 3 December 2012 in which the first statement reads: “Having regard to the Treaty on the Functioning of the European Union, and in particular Article 82(2)(b) and Article 83(1)”.
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6.3.3. The opt-in/opt-out option left to some Member States The Directive is supposed to enhance mutual recognition through the harmonization of substantive law. However, since the Directive’s principal legal basis is Article 83 of the Treaty on the Functioning of the European Union (“TFEU”), and this Article is in Title V of Part Three, it is subject to Protocols 21 and 22 to TFEU. Therefore it will not apply to Denmark and will apply to the United Kingdom and Ireland only if they chose to opt in380. As a result, should those countries not choose to opt in, the harmonization requirements would not apply to the same extent. Only Ireland has declared its intention to opt in381. The UK has seemingly opted out for the time being382. As a result, their decisions may affect the harmonization efforts over the whole of the EU and defy at least partially any mutual recognition efforts that may stem from the harmonisation provided by the Draft Directive when adopted.
6.3.4. Legal Certainty As discussed, Framework Decision 2005/212/JHA applied to all offences punished with a custodial sentence of a maximum of at least one year and goes beyond the powers conferred under TFEU. As a result a question will arise as to whether the Draft Directive in fact replaces Framework Decision 2005/212/JHA in its entirety thus limiting its scope and having a potentially negative effect on mutual recognition. Under Paragraph 2.3 of its explanatory memorandum on the Draft Directive, the European Commission states that “The limitation of the scope of this proposal to the areas of crime listed in Article 83(1), including crimes committed by participating in a criminal organisation, implies that existing provisions of EU rules on confiscation should remain in place in order to maintain a degree of harmonisation with respect to criminal activities which fall outside the scope of this Directive. The proposal accordingly maintains in force Articles 2, 4 and 5 of Framework Decision 2005/212/JHA”.383 This is confirmed by the
380 See Protocols 21 and 22 under Article 4. Consolidated Version of the Treaty on the Functioning of the European Union art. 290, 2008 O.J. C 115/47, at [383]. Available at : http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2010:083:0047:0200:en:PDF
381 Council of the European Union, 3 December, 2012, CODEC 2887, See under Article 14 (1) of the new proposal. At: http://register.consilium.europa.eu/pdf/en/12/st17/st17117.en12.pdf
382 See the Ministerial statement laid with the House of Commons on 18 September 2012. Available at: https://www.gov.uk/government/speeches/european-union-crime-freezing-and-confiscation-of-proceeds
383 See Section 2.3 of the European Commission Explanatory Memorandum in the Draft Directive; COM(2012) 85 final.
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Council General Approach384. Thus, the European Commission proposes to have the Draft Directive replacing Joint Action 98/699/JHA and repealing only partially, Framework Decisions 2001/500/JHA and 2005/212/JHA. Since the entry into force of the Treaty of Lisbon on 1 December 2009 there has been no Treaty base for Framework Decisions. Protocol 36 of TFEU on Transitional Provisions states under Title VII, Article 9, that “The legal effects of the acts of the institutions, bodies, offices and agencies of the Union adopted on the basis of the Treaty on European Union prior to the entry into force of the Treaty of Lisbon shall be preserved until those acts are repealed, annulled or amended in implementation of the Treaties. The same shall apply to agreements concluded between Member States on the basis of the Treaty on European Union"385. Partially repealing a Framework Decision is not envisaged in the Protocol. Thus, albeit the European Commission’s position in its memorandum of understanding, the legal consequence of the Draft Directive may be that Member States will consider - regardless of the wording of the Directive but pursuant to the TFEU - the stated Framework Decisions repealed altogether and replaced by the new instrument. As a result, if harmonisation will be possible on some level, Member States might be able to go back on advances made in other areas. This will not have a positive impact on efforts to enhance mutual cooperation. The possibility of multiple interpretations of these provisions highlights a need for more legal certainty as to the scope of the Draft Directive and related Framework Decisions.
6.4. Of the importance of statistics
6.4.1. The lack of statistics Statistics have been hard to come by during the implementation of this Study. It is obvious from the difficulties in obtaining statistics from Asset Recovery Offices and other authorities that the objectives set out in the Communication of the European Commission of 2008 have not been attained386. The reasons given for the lack of statistical information have been multiple. There are follows:
384 Council of the European Union, 3 December, 2012, CODEC 2887, See 4 of the introductory statement. At: http://register.consilium.europa.eu/pdf/en/12/st17/st17117.en12.pdf
385 Consolidated Version of the Treaty on the Functioning of the European Union, Protocol 36, Title VII, Article 9, 2008 O.J. C 115/47, at [409]. Available at http://www.consilium.europa.eu/uedocs/cmsUpload/st06655-re01.en08.pdf
386 Communication from the Commission to the European Parliament and the Council, Proceeds of Organised Crime, Ensuring that « Crime does not Pay ». COM (2008) 766 final; 20 November 2008; See at 4.1.
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Enforcement orders are not centralised and there is no obligation to inform a centralised organisation on when a request comes in, Statistics before 2011 were not compiled in some countries, There are many types of enforcement orders and they are not organized by categories, A number of actors are involved in enforcement and none has the task of actually collecting or generating statistical information, Each organization has its own method of computing data and thus obtaining global useable datasets.
Other underlying issues are the reluctance to give statistics that: Would identify poor results, May not be complete, Require verification with a number of other actors who are themselves reluctant to share information.
The Draft Directive Explanatory Memorandum, identifies a number of reports that highlight the lack of available or useable in a comparative analysis statistical data387. This was also observed by an independent study conducted in 2009388, which states: “The majority of EU Member States do not automatically evaluate innovations like criminal asset recovery. The operating statistics necessary to measure implementation and assess effects are therefore not available. This makes it very difficult to diagnose and remedy system defects”.
6.4.2. The need for statistics and the proposed solution in the Draft Directive The need for statistics has been highlighted many times. The Commission Staff Working Paper accompanying the Draft Directive, highlights the issue389. It even states that “Given the scarcity of measurable indicators and the lack of a coherent comparative statistics
387 See Section 2.2.
388 Framework Service Contract No JLS/2010/EVAL/FW/001/A1, Study for an Impact Assessment on a proposal for a new legal framework on the confiscation and recovery of criminal assets.
31 "Assessing the effectiveness of EU Member States' practices in the identification, tracing, freezing and confiscation of criminal assets". See page 12. Available at http://ec.europa.eu/home-affairs/news/intro/docs/20120312/final_asset_recovery_report_june_2009.pdf
389 Commission Staff Working Paper, Executive Summary of the Impact Assessment Accompanying the Proposal for a Directive of the European Parliament and the Council on the freezing and confiscation of proceeds of crime in the European Union {COM(2012) 85 final}
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system on confiscation and asset recovery across the EU, it is almost impossible to quantify with precision the potential impacts of the policy options (some including policy actions which are very different in nature)”. To remedy this, the European Commission introduces reporting obligations. The Draft Directive imposes, pursuant to its Article 11, on Member States to “regularly collect and maintain comprehensive statistics from the relevant authorities in order to review the effectiveness of their confiscation systems” and in an attempt to create the basis for useful data collection and statistical generation is specifies the type of information that Member States are obliged to send the European Commission each year. This is an important step and any instrument on mutual recognition should include an obligation on Member States to collect data on the freezing and confiscation of assets in cross-border based on mutual recognition.
Under Article 11, the Draft Directive proposes three itemized categories that pertain to mutual recognition. It requires Member States to state: […] “(e) The number of requests for freezing orders to be executed in another Member State, (f) The number of requests for confiscation orders to be executed in another Member State, (g) The value of the property recovered following execution in another Member State” […].
The other categories are not specific to mutual recognition. The Draft Directive does not aim at monitoring mutual recognition. Thus, it is natural that its scope in this area is limited.
An instrument on mutual recognition could expand on this and provide a distinction between the different types of confiscation orders, the delays in execution of the different orders, the reasons for non-execution of orders, data from the executing Member State to reconcile numbers, and the amounts of assets recovered per category of order. This would provide solid datasets enabling a clearer understanding of the effectiveness of different tools, obstacles encountered and the efforts to be made.
Effective statistics need to be generated as they are an indicator of efficiency and its opposite deficiency. If targeted they can highlight areas of need for further regulation.
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6.4.3. The type of statistics needed Today, in the absence of statistics it is difficult to define future policy for the EU. All agree that the lack of statistics make it impossible to efficiently evaluate existing policies390 and define new ones391. The European Commission states in its impact assessment for the Draft Directive that: “However, given the scarcity of data on the number and amounts of orders to be enforced in other Member States, a detailed profitability estimate by country for this policy option is not possible.”392 But when given the opportunity any regulation imposing statistics is either opposed or severely limited. One of the reasons why the Draft Directive’s scope excludes provisions on mutual recognition is that it is not currently possible to evaluate the extent of mutual recognition enforcement. Thus, it introduced reporting obligations on the Member States that sought to remedy this. These reporting obligations should enable the European Commission to produce implementation reports and evaluations. In the context of mutual recognition of orders specific statistics are needed.
The type of statistics needed would enable: The assessment of the success or utilisation rate of a specific tool (such as non- conviction based orders) The ability to distinguish the evolution of cross-border orders by comparison to national efforts to freeze and confiscate proceeds from crime The ability to determine the utilisation rate of cross-border (EU only and International) freezing orders and its evolution in time including on a per country basis The ability to determine the utilisation rate of cross-border (EU only and international) confiscation orders and its evolution in time including on a per country basis
390 See statement 17 of the Draft Directive.
391 Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee - Developing a comprehensive and coherent EU strategy to measure crime and criminal justice : an EU Action Plan 2006-2010. /* COM/2006/0437 final */. The Commission states in Section 4 on Objectives that: “One of the main deficiencies in the area of Justice, Freedom and Security is still the lack of reliable and comparable statistical information. Quantitative information on the trends and levels as well as on the structure of crime and terrorism and of the measures taken to prevent and fight these problems in Member States and at EU level, and where possible international comparisons, is essential for the development of a knowledge based system of effective and efficient policies for the prevention of and fight against crime and terrorism.”
392 Commission Staff Working Paper, Executive Summary of the Impact Assessment Accompanying the Proposal for a Directive of the European Parliament and the Council on the freezing and confiscation of proceeds of crime in the European Union {COM(2012) 85 final} at 5.5.
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The volume of assets frozen following cross-border (EU only and international) orders and its evolution in time including on a per country basis The volume of assets confiscated following cross-border (EU only and international) orders and its evolution in time including on a per country basis The outcome of cross-border freezing orders and in particular their rate of implementation so as to be able to pin-point which countries block enforcement The outcome of cross-border confiscation orders and in particular their rate of implementation so as to be able to pin-point which countries block enforcement The number of appeals made against cross-border freezing orders and their outcome The number of appeals made against cross-border confiscation orders and their outcome
6.4.4. Recommendation to generate EU level statistics One most obvious way to generate proper statistics, given the small number of cross- border enforcement orders made in the area of freezing and confiscation of criminal assets based on those countries that were able to provide statistical information, would be to use the EJN network. The EJN has created an online platform accessible by law enforcement agencies with a login and password system393. This is regularly used by these agencies to determine the appropriate contact in a specific country. As a result, it is possible to imagine that where a law enforcement agency needs to obtained the recognition of an freezing or confiscation order in another Member State, it could basically enter relevant information on the EJN platform, including the type of order and the amount of assets sought and that once done the information in the form of an online certificate – based on the existing certificate forms394 - would automatically generate a file number and even be directly transmitted to the receiving authorities. This would enable the traceability of all enforcement actions undertaken and the results obtained. Statistics could then be generated automatically based on the file numbers. The advantage of this solution by opposition to imposing reporting obligations on Member States is: that if the file number – as generated by EJN - is made conditional in order for the certificate to be processed in the receiving Member State, the whole data will be automatically centralised through EJN at one stage without any need to Member
393 http://www.ejn-crimjust.europa.eu/ejn/EJN_Login.aspx
394 See at http://www.ejn-crimjust.europa.eu/ejn/libdocumentproperties.aspx?Id=433 and http://www.ejn- crimjust.europa.eu/ejn/libdocumentproperties.aspx?Id=399
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States to adopt new data collection systems or for the European Union to impose harmonised rules on statistics; that having a centralized portal for generating certificates and file numbers should save costs in all Member States – no need to adapt the existing systems - and for the EU – no need to have teams of people chasing missing information or reviewing the information in many different languages; that reversing the incentive structure – Member States want to confiscate but don’t want to report is more logical; and that there is a sanction to not obtaining a file number – receiving Member State refusal of the information – and there is no sanction to not reporting – Member States who fail to report under Article 11 or which provide incomplete reports will hardly be sanctioned.
6.4.5. The use of new technologies The efficiency of mutual recognition warrants the use of new technologies. New technologies can be used to facilitate transmission, monitoring, translation and management of cases and case material. If an appeal for example is lodged against a case in the Requesting Member State, it is crucial that the Receiving Member State is made aware of this immediately. With new technology this could be done instantaneously.
Systems developed through the EJN and in conjunction with Eurojust could enable the placing online of requests for freezing and confiscation. This would truly enable the EU wide action when one Member States issues a confiscation order for assets belonging to a convicted offender. Requests placed on the platform would be deemed transmitted and actionable by all Member State and any evolution in the case could be monitored by all Member States. Translation software could facilitate the understanding of any developments and a blogging system could act as an exchange mechanism between stakeholders. Any questions asked or issues raised would thus be immediately communicated to all increasing efficiency and transparency. Member States such as Scotland have already developed a secure internet based management systems for criminal cases. This would of different in its purpose but similar in the technology required.
The next regulation in the procedural mechanisms to enhance mutual recognition could enable the European Commission to adopt the necessary tools through a Delegated Act.
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6.5. Evaluation of the impact of diverging measures on the effectiveness of the recognition of orders to freeze and confiscate criminal assets As shown in this Study the stance towards tougher regulations on crime is general and many Member States have recently adopted regulations that include forms of extended confiscation, third party confiscation and criminal non-conviction based confiscation. Thus, a natural convergence is emerging as the consensus grows on the most effective tools to fight crime. As countries adopt these tools, they sometimes need to readjust their procedures or reaffirm the importance of also protecting fundamental rights. This is often done through or as a result of case law. Even though there is a general convergence towards similar tools and their effect on fundamental rights is taken into consideration, important differences remain. Indeed, there are for example at one end of the spectrum countries such as the UK, Ireland and Italy which have developed comprehensive and expansive freezing and confiscation systems and at the other Luxembourg, the Czech Republic, Cyprus and Greece which have confiscation systems that are more limited in scope. It is difficult to tell whether diverging measures have a real impact on the effectiveness if orders to freeze and confiscate criminal assets. The information collected under this Study shows that there are few refusals for enforcement and that enforcement requests are undertaken promptly. It is thus unlikely that the small number of refusals has an impact on the small number of requests made in the first place unless countries are self- censoring to avoid wasting resources. The responses obtained in the Study do not show this. It does not appear that diverging measures do in fact limit mutual recognition. What is more likely to have an impact on recognition is the ease of the process itself. In the UK for example, prior to the 2002 Proceeds of Crime Act, the State had considerable powers to confiscate. These powers were underused. Two factors it seems contributed to the success of the new Act. First, many powers were transferred from the High Court to the Crown Court, second an Asset Recovery Agency was created with sweeping powers to investigate and pursue the proceeds of crimes and third a few years later the Serious Organised Crime Agency was established. There was thus, beyond changes in the substantive law, a complete reorganisation at the national level on the way to deal with crime. This may be insightful at the EU level. Granting a more centralized role and powers to an organization at the EU level to direct enforcement and rethinking mutual recognition procedures might also enhance effectiveness.
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6.6. Suggestions on improvement to mutual recognition and enforcement of orders to freeze and confiscate criminal assets
6.6.1. The need for new instruments Governments have not been satisfied with the results obtained in fighting international organized crime. This dissatisfaction has grown these last years, especially in the EU as criminals use the freedoms granted by the Union to facilitate their activities and hide the resulting proceeds. When in the 90s, harmonisation was slow on the uptake, mutual recognition was seen as an alternative means that could be successfully used to fire up the efforts to further build a European Judicial Area395. In this spirit a number of Framework Decisions were adopted. The results from these are unconvincing. The Draft Directive reignites the harmonisation route. This important work has highlighted the need for a regulation on mutual recognition and fuelled new research, interest and debate in the area.
6.6.1.1. The Lisbon Treaty warrants new instruments Apart from the fact that the European Commission has pointed out its disappointment with the implementation396 of Framework Decisions 2003/577/JHA, on mutual recognition of freezing orders397, and 2006/783/JHA, on the mutual recognition of confiscation orders,398 the adoption of new instruments replacing those adopted under the former Title VI TEU, such as the above referenced Framework Decisions, is consistent with TFEU Declaration 50 concerning Article 10 of the Protocol on transitional provisions399. This Declaration invites the newly empowered institutions to adopt amending or replacing legal acts with the five- year transitional period. Thus, replacing the said Framework Decisions by 2014 would be relevant.
395 See this argument in Lelieur Juliette and Sinopoli Laurence, La reconnaissance mutuelle à l’épreuve de la cooperation judiaire, cejec-wp, n 2009/6, page 2.
396 See in particular the European Commission’s implementation reports on Framework Decisions 2005/212/JHA on extended confiscation and 2003/577/JHA on the mutual recognition of freezing orders under COM(2007) 805 and COM(2008) 885; Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0805:FIN:EN:PDF
397 OJ L196 of 2 August 2003, page 45
398 OJ L382 of 24 November 2006, page 59
399 Consolidated Version of the Treaty on the Functioning of the European Union, Protocol 36, Title VII, Article 9, 2008 O.J. C 115/47, at [448]. Available at http://www.consilium.europa.eu/uedocs/cmsUpload/st06655-re01.en08.pdf
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In this vein, it is suggested to adopt a Regulation on mutual recognition that would provide a unique re-enacted framework for Framework Decisions 2003/577/JHA and 2006/783/JHA; a solid basis to support the Draft Directive for purposes of mutual recognition; a basis for the ECJ to operate its control over mutual recognition related acts.
6.6.1.2. Mutual recognition enhances efficiency The Informal Expert Working Group on Mutual Legal Assistance Casework Best Practice convened by the United Nations Office on Drugs and Crime reported that “experience in this area clearly demonstrates that the direct enforcement approach is much less resource intensive, avoids duplication and is significantly more effective in affording the assistance sought on a timely basis. Consistent with the conclusions of the expert working group on asset forfeiture, the expert working group on mutual legal assistance strongly recommended that States that had not done so should adopt legislation to permit the direct enforcement of foreign orders for freezing, seizure and confiscation”.400
However, the responses obtained from various Member States authorities under this Study showed that in practice Member States often preferred mutual assistance to mutual recognition through the application of Framework Decisions 2003/577/JHA and 2006/783/JHA. The reason given for the preference was that the scope of mutual assistance being broader than that of the Framework Decisions, it was in fact easier to use.
Thus, the “best practice” identified by the first paragraph above may be rebutted where mutual recognition is restricted. For mutual recognition to be fully beneficial, it needs to have a scope broad enough to make it initially the best means of communicating requests to other Member States.
Further, if the scope of mutual recognition should be widened to ensure its use, it should also become by law the only – or if not the default - tool used between Member States so as to lessen the confusion that multiple tools with similar functions create and enhance overall efficiency.
400 See the report of the informal expert working group on mutual legal assistance casework best practice, which presented “Best practice recommendations on facilitating mutual legal assistance”, sect. 7.8, page 12 (United Nations Office on Drugs and Crime, Vienna, 2001), available at www.unodc.org/pdf/lap_mlaeg_report_final.pdf.
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6.6.2. Definitions and concepts As shown throughout this Study definitions or confusion on the definition of terms is a contributor to misunderstandings, mistrust and eventually the limited effectiveness of mutual recognition.
Definitions and the use of specific terms have often helped in fostering a better understanding of concepts or a departure from other concepts. Wasn’t the progression from assistance and cooperation to recognition marked by a change in the way participating Member States were referred to? In cooperation or mutual assistance the participants are the “Requesting State” and the “Requested State”. In mutual recognition they are referred to as the “Issuing State” and “Executing State”. This evolution can be identified in early proposals for the execution of freezing orders in the European Union401.
Within an area that includes 28 countries and as many legal cultures, it is sometimes useful to create new expressions so as to avoid using an expression of word that already exists in any one or more of these countries but does not correspond exactly to the new common definition of the expression.
New instruments should avoid making references to “NCBC” or non-conviction based confiscation unless they refer to what is traditionally and commonly referred to as “NCB”. If not, new words or expression can be created to avoid any confusion.
As shown in this Study “confiscation” may have many meanings and be considered and used as a “precautionary measure” in some Member States and as a “penalty” in others.
Words such as seizure, freezing, sequestration, forfeiture, confiscation are used with meanings that often overlap. It may be useful to clarify these in the context of any regulation taken at the EU level and that directly relate to their application and to specify when and under which conditions specific fundamental rights attach.
Further, it was noted that the right to refuse execution may not be as appropriate for fuller mutual recognition as the concept of “non-execution”402. Thus, and especially in the
401 Council of the European Union, Draft COUNCIL Framework Decision …/…/JHA of on the execution in the European Union of orders freezing assets or evidence, 30 November 2000, 13986/00. Available at: http://www.statewatch.org/semdoc/assets/files/council/13986-00.pdf
402 See Nilsson Hans G., Developments in Mutual Legal Assistance and Extradition at the International Level, 2006. Available at: http://www.unafei.or.jp/english/pdf/RS_No65/No65_06VE_Nilsson1.pdf
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case of confiscation – the element of surprise is not required as in the case of freezing orders - , one could have instruments that enable a delay in execution or non-execution and eliminate the notion of a refusal to execute.
6.6.3. Checks and balances That police and prosecutorial powers be increased and reorganised to both speed up and facilitate the seizure, freezing and confiscation of instruments and proceeds of crime bears no doubt. However, the police and prosecutors are neither independent nor impartial. They are parties to the case against the defendant. This is set-forth in a ECHR long line of authority. In the case of Raimondo v. Italy, the ECHR agreed in part with the applicant and cited the Catanzaro Court of Appeal decision of 4 July 1986 which referred to the "disconcertingly casual way in which the contested preventive measures concerning the person and property of Mr Raimondo had been adopted thereby effectively decreeing his civil and economic death"403. Freezing and confiscation measures have severe consequences on people’s lives. Sometimes the object that is confiscated constitutes a person’s livelihood. As a result, throughout the process and at regular intervals automatic checks by judicial authorities in both the Issuing and Receiving Member State – without the concerned person having to file a complaint - should be performed to re-assess the situation and the need for holding the frozen assets or maintaining the confiscation order. Such re-assessments should allow input from the concerned person. This would create a system of checks and balances allowing for prompt action to issue and enforce freezing and confiscation orders but also justifying their duration and facilitating the undoing of such orders where they become unnecessary or unwarranted.
6.6.4. Forfeiture of criminal assets and unjust enrichment During the implementation of the Study, some aspects of the uses of forfeited assets were not always clear. It is important that no one or entity including Member States are seen as “profiting” from criminal activity. As a result it is important that precise rules are put in place to ensure that the hundreds of millions or billions of Euros404 that are transferred into the coffers of the Member States are accounted for and put to a targeted use linked to the reason why these assets were confiscated in the first place. In some Member States
403 ECHR, Raimondo v. Italy, 22 February 1994, http://echr.ketse.com/doc/12954.87-en- 19940222/view/#02000001
404 It is reported that a Court in Trapani order the definitive confiscation of 1.3 billion Euros’ worth of mafia related assets in April 2013. See http://www.guardian.co.uk/world/2013/apr/03/vito-nicastri-assets- seized-mafia
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extensive best practices exist on the reuse of confiscated assets for public or social purposes. Such practices can be seen, in a way, as a form of restitution of the proceeds of crime to the deprived communities. However, it should be kept in mind that reusing confiscated assets as incentives to “reward” law enforcement agencies may steer the action of law enforcement toward the richest offenders.
6.6.5. Other fundamental rights issues As discussed before, if the minimum standards proposed by the EU in criminal matters should not limit the minimum standards of fundamental rights as recognized by the EU can they however limit the fundamental rights granted by Member States that go beyond the EU minimum fundamental rights? Or put more plainly, can EU regulations prohibit Member States from going beyond the minimum fundamental rights as recognized by the EU? As a consequence, are the rights recognized in the Charter and the Convention to become “maximum” fundamental rights? These are important questions that should be addressed at the EU moves ahead in building a regulatory framework in the area of criminal matters.
In such complex areas, the risks on unfairness are high.
Many cases highlight the risks of unfairness and excess. For example the 2012 case of Waldemar Nowakowski v. Poland, points to these risks405. In this case, the applicant, a 77 year old war veteran, had accumulated a collection of old weapons in his house. Some of these were out of order but others were not. A recent law was adopted imposing on all holders of weapons to obtain a licence. The applicant failed to apply for a licence. His weapons were thus seized and confiscated and proceedings brought against him. Before the Warszawa Wola District Court, the applicant stated that: “He had been collecting old arms, mostly memorabilia of the Second World War as well as other older pieces, for almost fifty years. He had previously on numerous occasions made parts of his collection available on loan to various museums. He had been collaborating as an expert in old weaponry with the Warsaw Uprising Museum. The court noted that the applicant had explained that in order to prevent unauthorised third parties from having access to the collection he had kept it in his apartment which was secured with three locks and equipped with an alarm. He had also taken the necessary technical measures to make it impossible to use most of the weapons in his possession as arms. He declared his willingness to take such measures also in respect of the remaining pieces”.
405 ECHR, Waldemar Nowakowski v. Poland, 24 July 2012, no. 55167/11. Available at
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The Warszawa Wola District Court, conceded that most pieces of the collection had been put out of action, but that some could be made to work again. The Warszawa Wola District Court also noted that the offence was minor in nature and discontinued the proceedings to punish the applicant but it decided to confiscate whole collection and forfeit it to the state rather than only the weapons that could be made to work again. It stated “that dividing up the collection by returning to the applicant those pieces which had already been put out of action would seriously diminish its value. It noted that the collection should, because of its historical interest, be handed over to an institution capable of securing appropriate storage and display conditions for it”. For four years, the applicant was deprived of a collection that he cherished and along the line was told that he would lose it all. The ECHR concluded that the Polish State had violated Article 1 of Protocol No. 1 to the Convention. The defendant was lucky to have been able to obtain legal aid. In some systems, these procedures are civil and may not give rise to legal aid and people may thus lose their property with no effective access to justice.
Procedures for forfeiture orders – the transfer to the State of property that does not belong to the offender anymore - and confiscation orders that can transform into prison sentences (for example if the amount of the confiscation order is not paid to the State) should be balanced by procedural rights that limits the possibility of error to the minimum. This is not a statement on the EU as a whole. The statement merely aims at warning against possible issues in the future based on issues that arose in some EU countries who have developed extensive freezing and confiscation practices.
Effective appeals against decisions to freeze and confiscate assets should be possible. In particular timing to appeal decisions should be proportionate so as to give the concerned person adequate time to appeal such important decisions. And as with the deprivation of freedom, actions that deprive temporarily a person’s property should be subject to regular review. Service of process principles should be clearly defined so that adequate procedures regulate the summons to a hearing for final confiscation or forfeiture. This risk has been highlighted in the UK and may take place also in criminal non-conviction based confiscation proceedings in absentia. In cases where the presumption of innocence does not apply, as in extended confiscation, and non-conviction based confiscation406, the process should follow strict rules so as the
406 Even if EU instruments such as the Directive Proposal state that the presumption of evidence applies, Member States can go beyond these minimum rules. Page 463 of 477
ensure a fair trial in cases of extended confiscation and that all possible avenues have been explored in non-conviction based confiscation and that means for redress not only exist but are also effective. The current EU Directive on legal aid has shown to be mostly ineffective. As a result, it is essential that in mutual recognition concerned persons have access to a lawyer in both the Issuing and Receiving Member States. The Supreme Court in the UK pointed out that legal aid may in fact not be possible or automatic in civil forfeiture cases.
6.6.6. Conflict of jurisdiction and the ne bis in idem principle The strategy adopted by the EU aimed at criminals’ assets has led to tougher regulations being adopted in the Member States on the freezing and confiscation of assets. The transnational character of organized crime and the tenuousness of the link between the offence and the asset targeted by the freezing or confiscation order within the framework of extended confiscation (Article 4 of the Draft Directive), non-conviction based confiscation (Article 5 of the Draft Directive), and third party confiscation (Article 6 of the Draft Directive), all risk generating multiple jurisdictional conflicts.
The non bis in idem principle with prohibits two same procedures against a person for the same facts solves some jurisdiction conflicts. It applies at all stages of criminal proceedings and facilitates mutual recognition407. The Draft Directive, as all EU instruments on mutual recognition provides under its Article 4(2)(b) that the decision on confiscation is excluded when criminal activities have already been the object of criminal proceedings having led to a final acquittal of the concerned person or in other cases of the application of the ne bis in idem principle.
In the particular context of confiscation of criminal assets, more than one Member State could claim jurisdiction for the confiscation of assets. A race to confiscate between Member States may ensue. The amounts at stake – hundreds of millions of Euros if not billions - are such that this is conceivable. In this context, there is a real risk that the non bis in idem principle may in fact constitute an obstacle to mutual recognition if it were to be used for such a purpose.
Traditional conflicts of law rules might not function in the case of confiscation or forfeiture.
407 ECJ, Van Esbroeck, case C-436/04, 9 March 1006.
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To avoid conflicts of jurisdiction the introduction of specific provisions is recommended. This would apply each time the Receiving State invokes jurisdiction for specific criminal acts. These provisions could specify that where there is a conflict of jurisdiction on the subject of a freezing or confiscating order, the Receiving State shall control the jurisdiction of the Issuing State on the decision following a chronological analysis of procedural events. Thus when the Receiving State receives a request and local proceedings have also started, it will determine when the proceedings first started as between the Receiving and Issuing State and then implement the Issuing State order if the proceedings in that State were initiated first.
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Mutual recognition is thus enforced based on the following diagram:
ISSUING STATE
RECEIVING STATE
IF proceedings have IF decision has already started on the Control already been taken on same facts s the same facts
YE S NO YE S
Proceedings started
first in Issuing State Proceedings started first in Receiving State
NO ENFORCEMENT ENFORCEMENT OF ISSUING STATE OF ISSUING ORDER STATE ORDER
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Thus, when the jurisdiction of the Receiving State could have, as a result of the application of national rules of jurisdiction applied, but that that such jurisdiction has not been asserted prior to the Issuing State initiating proceedings, the Receiving State shall enforce the Issuing State order. This can extend to cases of acquittal and expiry of statutes of limitation, the ECJ having decided in the Gasparini case that a final acquittal decision fell within the scope of the non bis in idem principle408.
6.7. EU instruments as a basis for a new instrument on freezing and confiscation order
6.7.1. The European Arrest Warrant The most effective mutual recognition instrument in criminal matters is the European Arrest Warrant (“EAW”). As confirmed during this Study the main experience relating to mutual recognition in criminal matters that judges, prosecutors and police officers have is through the use of the EAW. The EAW is seen by the different authorities as an efficient means of obtaining the surrender of offenders by one Member State to another. The success of the EAW is the result of a number of factors. First, grounds for refusal to enforce a EAW are very limited. Second, the EAW clearly replaces traditional extradition procedures leaving no other option but to use the EAW. Third, the ECJ has clarified aspects of the EAW facilitating its implementation and adding to legal certainty. Fourth, even where new instruments require constitutional changes, these changes are possible409. Importantly, the EAW deals with the ne bis in idem, the territoriality and the double criminality principles. As a result lessons learned from the EAW are useful in the preparation of new mutual recognition instruments.
With respect to the double criminality principle, the ECJ410 considered whether the Framework Decision was in conformity with the TEU and confirmed that whether by reason of their inherent nature or the punishment incurred of a maximum of at least three years’ imprisonment, the categories of offences in question are sufficiently serious, in terms of adversely affecting public order and public safety, to justify dispensing with the verification of dual criminality, and are therefore ‘objectively justified’.
408 ECJ, Gasparini, C-467/04, 28 September 2006.
409 The Portuguese Constitution for example was amended by Lei Constitucional no. 1/2001, of 12 December 2001, Diario da Republica, Serie I-A, 12 December 2001, to broaden the scope of surrender/extradition proceedings.
410 Case C-303/05 Advocaten voor de Wereld VZW v Leden van de Ministerraad, [2007] ECR I-03633.
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7. PROPOSALS
7.1. Fundamental rights The protection of the rights protected by Charter of fundamental rights and the European Convention on Human Rights, a condition to effective mutual recognition pursuant to the proposal for a Directive on the freezing and confiscation of proceeds of crime in the European Union.
With the entry into force of the Lisbon Treaty, the Charter of Fundamental Rights, which aims at enhancing the protection of human rights in the European Union and, which should guarantee a new level of fundamental rights for European citizens, has become binding411.
In the same movement, on April 5, 2013, negotiators of the 47 Council of Europe member states and the European Union finalised the draft accession agreement of the European Union to the European Convention on Human rights (ECHR), draft on which the ECJ has now being consulted412.
Upon its accession to the ECHR, the European Union will be integrated into its system of human rights protection. Thus, in addition to the protection of such rights by EU internal law, which is reinforced by the integration of the Charter into primary EU law, the European Union will have the obligation to uphold the ECHR and will be placed under the control of the European Court of Human Rights. Today, natural persons in the EU cannot lodge a complaint before the ECtHR when they consider that their human rights have been violated by acts adopted by EU institutions. Following accession to the ECHR, individual complainants will be able to seize the ECtHR in relation to claims aimed at transposition measures of a Directive by a Member State or even at interpretations provided by the European Union itself of EU law. In effect, the EU's accession will strengthen the protection of human rights in Europe, by submitting the EU’s legal system to an independent external control thus closing gaps in legal protection by giving European citizens the same protection vis-à-vis acts of the EU as they presently enjoy from Member States.
411 Art. 6 § 1 TUE et art. 6 § 3.
412 Cette adhésion est devenue une obligation légale en vertu de l’article 6 paragraphe 2 du Traité de Lisbonne, entré en vigueur le 1er décembre 2009 et de l’article 59 paragraphe 2 de la CEDH amendé par le protocole n° 14 à la CEDH entré en vigueur le 1er juin 2010.
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If the respect for fundamental rights has always been submitted to the control of the ECJ and is a constitutive element of EU construction, the new status conferred to the Charter places the respect of fundamental rights at the heart of EU policy and action. The formula commonly used in mutual recognition instruments following which the legal instrument “shall not have the effect of altering the obligation to respect fundamental rights and fundamental legal principles as enshrined in Article 6 of the Treaty on European Union » may, as a result, become insufficient if not plainly redundant.
Article 8 of the Directive proposal includes specific safeguards and remedies to ensure that fundamental rights are protected when provisions that limit the individual rights of those under suspicion, those accused or of third parties which are not themselves subject to the proceedings, are implemented.
This article is likely to facilitate mutual recognition of freezing and confiscation orders. However, the mutual recognition of freezing and confiscation orders also requires that Member States abide by the provisions of the Charter when transposing and implementing the future Directive and that any interpretations provided by the European institutions also comply with fundamental rights as recognized thereunder.
By affirming the importance of the respect for fundamental rights that are impacted by the Directive, the European Commission fully complies with Article 51 §1 of the Charter which states that the Charter applies first and foremost to the European Union’s institutions, agencies and bodies.
The fundamental rights affirmed by the Directive proposal are the following: right to property, the presumption of innocence and the right of defence, the right to a fair trial, the right to a fair and public hearing within a reasonable time, the right to an effective judicial remedy before a court and the right to be informed on how to exercise it, the right to respect for private and family life, the right to protection of personal data, the right not to be tried or punished twice in criminal proceedings for the same criminal offence, and the principles of legality and proportionality of criminal offences.
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These rights are not absolute. They can be restricted provided that any limitation respects the principles of legality and proportionality of criminal offences. They must be clearly and precisely prescribed by law and must be necessary to attain their objective of protecting the general interest as recognized by the EU and in particular as enshrined in Article 52 of the Charter.
The limitations envisaged by the Directive proposal meet these requirements.
This submission of the Directive proposal to the rights affirmed in the ECHR ensures that the text will not be censured by the ECtHR if the court were competent to review European Union acts.
Conclusion: The Directive proposal by affirming the respect of fundamental rights within the EU enhances the perspective of an effective mutual recognition process for freezing and confiscation orders.
The Charter has a direct effect within the Member States when they implement EU law. The Charter is an integral part of primary EU law and the rights that it protects may be directly invoked before both before the ECJ and national courts when EU law is reviewed.
Member States must also strictly respect fundamental rights when implementing the Directive proposal. If a lack of trust were to arise both with respect to a Member State’s capacity to adequately protect fundamental rights in transposing EU law and the ability of the European Commission and national authorities or courts to remedy any lack of protection, an important obstacle to the enforcement of cross-border freezing and confiscation orders would ensue.
Moreover, it appears that the ECJ may impose a positive obligation on Member States to ensure that fundamental rights under the Charter are protected by all other Member States. In N. S. (C-411/10) v Secretary of State for the Home Department et M. E. and Others (C-493/10) v Refugee Applications Commissioner and Minister for Justice, Equality and Law Reform, the ECJ stated at paragraph 106 that: “Article 4 of the Charter of Fundamental Rights of the European Union must be interpreted as meaning that the Member States, including the national courts, may not transfer an asylum seeker to the ‘Member State responsible’ within the meaning of Regulation No 343/2003 where they cannot be unaware that systemic deficiencies in the asylum procedure and in the reception conditions of asylum seekers in that Page 470 of 477
Member State amount to substantial grounds for believing that the asylum seeker would face a real risk of being subjected to inhuman or degrading treatment within the meaning of that provision”413. This obligation would in effect constitute an obstacle in the context of mutual recognition as it may involve an assessment by a Member State of another Member State’s track record on human rights prior to accepting to enforce an order. However, the ECJ’s rationale may be limited to cases where alternatives exist. In the case of asylum seekers, the Court imposes on Member States to refrain from transferring asylum seekers back to the “Member State responsible” where fundamental rights protection cannot be guaranteed by that Member State and invites them under the circumstances to deal themselves with the asylum claims.
7.2. Facilitating mutual recognition whilst protecting fundamental rights
From the above presentation and to ensure mutual recognition of freezing and confiscation orders, it is suggested that the following measures are put in place:
Adopt a legal instrument on mutual recognition for all decisions in criminal matters. Ideally, this instrument would take the form of a Regulation. This instrument would consolidate Framework Decisions 2006/783/JHA, 2003/577/JHA and 2005/214/JHA. It could also increase their scope so as to include all decisions rendered in criminal matters. Such Regulation would also include consolidated mutual recognition forms and provisions ensuring that the process complies with protected fundamental rights. Such Regulation would co-exist alongside and even enhance instruments aimed at evidence gathering and transmission so as to make cooperation requests simpler and more flexible.
Although this is obvious particularly for the implementation of the Directive since the Commission would be able to launch infringement proceedings for incomplete or incorrect transposition of Article 8 (Safeguards), re-affirm that when a fundamental rights issue is detected, in particular pursuant the Treaty of Lisbon in respect to the Charter, the Commission may, as “guardian of the Treaties”, contact the national authorities requesting a resolution on the matter, and ultimately refer
413 Joined cases C-411/10 and C-493/10, European Court Reports 2011 Page 00000; Available at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0411:EN:NOT
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the matter to the Court of Justice to ensure that the national law in question - or a practice by national administrations or courts - is aligned with the requirements of EU law and that there is a uniform interpretation of fundamental rights related obligations.
Create a European human rights defenders’ system which would receive individual complaints, have complete access to files and report any relevant issues to EU institutions and national authorities. This system could be incorporated under the European Union Agency for Fundamental Rights (“FRA”). FRA does not currently intervene in individual cases but rather focuses on broad issues and trends. Whilst many bodies are focused on creating networks to facilitate cooperation between authorities in order to prosecute crime – including the possibility under Article 86 to create a European Public Prosecutor – none provide for assistance in the defense of human rights in individual cases. It is thus, suggested that in order to maintain some form of equilibrium, a system of European rights defenders be created.
Inform citizens on legal remedies against freezing and confiscation orders. Such information could be made available on the e-justice portal. The portal could provide a presentation by Member State on legal remedies available and specificities on cases of freezing and confiscation orders, in particular where the order is issued by another Member State.
Encourage the use of Joint Investigation Teams in freezing and confiscation procedures.
Organize systematic training of police forces, investigators, judges and prosecutors on fundamental rights
Encourage the use of ICT in transmitting information and requests for assistance and mutual recognition. A secured access exists today at the EJN level and such access could be used to create systems for the transmission of requests between Member States. This in turn would speed up the process and enable the generation of updated enforcement information throughout the EU facilitating the evaluation of instruments and the determination of new policies.
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7.3. Rationale for a Regulation on mutual recognition Mutual recognition relies on a complex variety of disparate instruments. Their transposition or implementation throughout the EU is difficult to assess given the number of EU and national regulations that come into play. Legal professionals insufficiently trained or informed find it difficult to follow the ever increasing number of regulations and related regulatory complexities. If in phase that follows a decision, the execution of a sentence in a Member State other than the sentencing one follows a mutual recognition process that involves a number of instruments that apply in a logical sequence, in the pre-judgment/sentencing however phase the substitution of traditional cooperation by mutual recognition instruments, specific to the EU, highlights a chaotic process. This is the result of a policy of small steps. It is a strategic error. In fact, the resulting complexity requires an investment from legal professionals that is disproportionate to the efficacy of the instruments. The result is that the instruments are at best partly used. In this context, the codification of instruments in one or two regulations which could cover pre and post judgment situations could be envisaged. This option would help overcome differences in substantial law, even if approximating substantial law is not a prerequisite to the adoption and application of mutual recognition instruments. However, it will be necessary to overcome differences in procedural laws and in particular those related to the rights of the defence, remedies, jurisdiction, and national treatment. Nevertheless, this option is the path that is most likely to foster renewed interest in mutual recognition especially when this is the cornerstone of an effective area of justice in the EU.
7.4. Options As stated previously the adoption of a Regulation to facilitate mutual recognition of freezing and confiscation orders whilst ensuring that fundamental rights are protected would both serve the fight against organized crime and enhance respect for fundamental rights throughout the EU.
There are a number of options available in terms of the structure of a regulation. The first option would consist in preparing a regulation that would strictly consolidate framework decisions 2006/783/JHA, 2003/57/JHA and 2005/214/JHA whilst simplifying the process of mutual recognition to limit the issues that arose in the past with the Framework Decisions. The second option would be to create a new instrument focused on the process of enforcement of decisions issued by other Member States in criminal matters. The second
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option is more ambitious and may be limited during a first stage to enforcement of decisions related to freezing and confiscation of assets.
Finally, to ensure that the right to judicial review is effective especially in the case of freezing orders where appeals must be filed, often within the briefest of delays, it is recommended that the Regulation on mutual recognition prescribes that appeals against freezing orders issued on the basis of a Mutual Recognition Regulation be submitted to the general rules on appeals made against freezing orders under national law. This would help avoid that Member States adopt specific procedures that by the confusion created would de facto limit the right to judicial review. (See the very controversial decision of the French Cour de Cassation, Crim, 13 February 2013), N°12-82-999).
Thus, proposals in the form of Regulations could be prepared and should follow a thorough review of the following existing instruments: • Council Framework Decision 2002/584/JHA of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States. • Council Framework Decision 2003/577/JHA of 22 July 2003 on the execution in the European Union of orders freezing property or evidence. • Council Framework Decision 2005/214/JHA of 24 February 2005 on the application of the principle of mutual recognition to financial penalties. • Council Framework Decision 2006/783/JHA of 6 October 2006 on the application of the principle of mutual recognition to confiscation orders. • Council Framework Decision 2008/909/JHA of 27 November 2008 on the application of the principle of mutual recognition to judgments in criminal matters imposing custodial sentences or measures involving deprivation of liberty for the purpose of their enforcement in the European Union. • Council Framework Decision 2008/978/JHA of 18 December 2008 on the European evidence warrant for the purpose of obtaining objects, documents and data for use in proceedings in criminal matters. • Directive 2012/13/EU of the European Parliament and of the Council of 22 May 2012 on the right to information in criminal proceedings • Council Framework Decision 2009/299/JHA of 26 February 2009 amending Framework Decisions 2002/584/JHA, 2005/214/JHA, 2006/783/JHA, 2008/909/JHA and 2008/947/JHA, thereby enhancing the procedural rights of persons and fostering the application of the principle of mutual recognition to decisions rendered in the absence of the person concerned at the trial.
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• Council Framework Decision 2008/675/JHA of 24 July 2008 on taking account of convictions in the Member States of the European Union in the course of new criminal proceedings • Council Framework Decision 2009/315/JHA of 26 February 2009 on the organisation and content of the exchange of information extracted from the criminal record between Member States. • European Commission, Green Paper, the Presumption of Innocence, COM(2006)174 of 26 April 2006. • Proposal for a Regulation of the European Parliament and of the Council on mutual recognition of protection measures in civil matters, COM(2011) 276 final. • Council Framework Decision 2009/948/JHA of 30 November 2009 on prevention and settlement of conflicts of exercise of jurisdiction in criminal proceedings.
From a fundamental rights perspective the proposals could take the following key elements specifically into consideration: • Persons targeted by decisions must be able to have access to relevant information concerning the proceedings and appropriate effective remedies; • In the case of confiscation, an appeal lodged against the decision must suspend the process of transferring the assets to executing Member State; • Mechanisms must exist to allow judicial review on issues related to fundamental rights and in particular national courts should be able, exceptionally and through a special fast-track procedure, to formulate questions to the ECJ where such issues arise as a result of the transposition of the proposed Directive by a Member State; • The principle of legality must be followed; • Proportionality must be at the centre of decision making processes; • The mechanisms for the issuing and execution of orders or decisions must be simple, clear and efficient; • Execution must be undertaken within reasonable delays; • Costs related to execution must be clearly allocated; • The distribution of the assets between various parties must follow precise guidelines and be transparent.
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doi:10.2838/727210