OECD Anti-Corruption Network for Eastern Europe and Central Asia Confiscation of instrumentalities and proceeds of corruption crimes in Eastern Europe and Central Asia OECD Anti-Corruption Network for Eastern Europe and Central Asia Confiscation of instrumentalities and proceeds of corruption crimes in Eastern Europe and Central Asia About the Organisation for Economic Co-operation and Development (OECD) The OECD is a forum in which governments compare and exchange policy experiences, identify good practices in light of emerging challenges, and promote decisions and recommendations to produce better policies for better lives of their people. The OECD’s mission is to promote policies that are aimed to improve economic and social well-being of people around the world. Find out more at www.oecd.org. About the Anti-Corruption Network for Eastern Europe and Central Asia (ACN) Established in 1998, the main objective of the Anti-Corruption Network for Eastern Europe and Central Asia (ACN) is to support its member countries in their efforts to prevent and fight corruption. It provides a regional forum for the promotion of anti-corruption activities, the exchange of information, elaboration of best practices and donor coordination via regional meetings and seminars, peer-learning programmes, and thematic projects. ACN also serves as the home for the Istanbul Anti-Corruption Action Plan. Find out more at www.oecd.org/corruption/acn/. About the thematic studies on criminal liability for corruption and law-enforcement in Eastern Europe and Central Asia The ACN Work Programme for 2016-2019 included a thematic cross-country study (review) on the criminal liability for corruption and effective law enforcement. Within the framework of previous Work Programme of the Network, topics for the thematic study were the liability of legal persons for corruption, foreign bribery and international co-operation in corruption cases. Other thematic studies will concern. The objectives of the studies are (1) to analyse the state of play in the relevant area in order to identify common problems and best practices (in particular, by using case studies from particular countries) and to develop regional recommendations; and (2) to identify capacity-building and training needs for the law enforcement authorities and the judiciary. Please cite this publication as: OECD (2018), Confiscation of instrumentalities and proceeds of corruption crimes in Eastern Europe and Central Asia This report is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of OECD member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. © OECD 2018 2 TABLE OF CONTENTS I. FOREWORD ............................................................................................................................................... 4 II. ACRONYMS .............................................................................................................................................. 5 III. ABOUT THE THEMATIC STUDY ......................................................................................................... 6 IV. CONCEPT AND PURPOSES OF CONFISCATION .............................................................................. 7 V. INTERNATIONAL STANDARDS ......................................................................................................... 10 A. UN Convention Against Corruption ........................................................................................................ 10 B. OECD Anti-Bribery Convention ............................................................................................................. 11 C. Ce Criminal Law Convention On Corruption .......................................................................................... 12 D. Convention On Laundering, Search, Seizure And Confiscation Of The Proceeds From Crime And On The Financing Of Terrorism (Warsaw Convention) .................................................................. 12 E. EU Documents ......................................................................................................................................... 13 F. FATF ........................................................................................................................................................ 15 G. CE Parliamentary Assembly .................................................................................................................... 15 H. European Court Of Human Rights .......................................................................................................... 16 VI. OBJECTS OF CONFISCATION MEASURES ..................................................................................... 22 A. Instrumentalities ...................................................................................................................................... 22 B. Proceeds (direct and indirect) derived from crime................................................................................... 25 C. Mixed proceeds ........................................................................................................................................ 29 D. Property of equivalent value .................................................................................................................... 30 E. Beneficial ownership ................................................................................................................................ 32 F. Third-party property ................................................................................................................................. 35 G. Property of legal persons ......................................................................................................................... 37 H. Third-party rights ..................................................................................................................................... 39 VII. CORRUPTION OFFENCES THAT TRIGGER CONFISCATION ..................................................... 42 VIII. TYPOLOGY OF CONFISCATION MEASURES .............................................................................. 50 A. Criminal confiscation as a sanction ......................................................................................................... 51 B. Criminal confiscation of instrumentalities and proceeds of crime (special confiscation)........................ 53 C. Extended criminal confiscation ............................................................................................................... 67 D. Civil forfeiture ......................................................................................................................................... 74 E. Administrative forfeiture .......................................................................................................................... 79 IX. EVIDENTIARY THRESHOLDS AND BURDEN OF PROOF, DEFENCES 82 X. THE PRACTICE OF CONFISCATION MEASURES ENFORCEMENT IN THE REGION 88 XI. RECOMMENDATIONS 98 TABLES Table 1. Corruption offences in the ACN countries ..................................................................................... 44 Table 2. Types of confiscation measures in the ACN countries ................................................................... 51 Table 3. Conditions for application of extended confiscation in the ACN countries (in the context of corruption crimes and money laundering) ...................................................................................... 73 3 I. FOREWORD Financial gain is a primary motive in most corruption offences. This makes confiscation of the proceeds of corruption an effective way to combat corruption offences and to stop laundering of the proceeds, as it deprives the perpetrators of their illicit and unjust gains. This thematic study, Confiscation of instrumentalities and proceeds of corruption crimes in Eastern Europe and Central Asia, analyses the state of play in relevant areas to identify best practices and common problems and to develop regional recommendations for strengthening anti-corruption policies and practices. This thematic study was prepared within the framework of the Anti-Corruption Network for Eastern Europe and Central Asia (ACN) of the Organisation for Economic Co-operation and Development (OECD) with the funding of the U.S. Department of State Bureau of International Narcotics and Law Enforcement Affairs (INL) for the project Support to Fight Against Corruption through Law Enforcement in Kyrgyzstan. The study was conducted based on responses to a questionnaire and other materials provided by the governments of ACN participating countries, namely: Azerbaijan, Armenia, Bosnia and Herzegovina, Croatia, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Montenegro, Romania, Serbia, Slovenia, Ukraine. The study also reflects the discussions and examples of best practices that were presented during the meetings of the ACN Law-Enforcement Network in 2016-2017. Additional research was conducted to enrich the report with the data from OECD countries. The study was prepared mainly in 2017. 4 II. ACRONYMS ACN OECD Anti-Corruption Network for Eastern Europe and Central Asia