Confiscation acquitted: EU law drops criminal charges


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F. Clementucci

By Francesco Clementucci
Published on Tuesday April 14, 2020

 

Confiscation of illicit funds represents an essential instrument for deterring and effectively combatting corruption, including the recovery of funds and reparation for victims. Typically, confiscation takes place following a wrongdoer’s conviction or indictment. However, successfully convicting criminals is hard, especially in international cases. Non-conviction based (NCB) confiscations can greatly facilitate this task.

While the judgment of the criminal person aims at stopping criminals from committing further crimes, confiscation aims at securing the criminal assets and preventing their use for furthering or initiating crimes.

In 2019 Italy introduced an extended confiscation for grand tax evasion (i.e. 100,000 euros and above). This measure is applicable to the entire property of the criminal, including the part unrelated to the crime. The entire assets are presumed illicit, unless the suspect proves otherwise (reverse of burden of proof). This is in full compliance with EU law[1] that requires Member States to apply “extended confiscation” for illicit funds[2], as well as with the Financial Action Task Force (FATF) recommendations 4[3] and 38[4].

In March 2020, the EU Court of Justice[5] has clarified the relevant EU law. In fact, while the EU framework decision on the confiscation of property[6] is applicable to “crime-related” confiscations only, we must conclude that EU law does not preclude national legislations from allowing courts to order the confiscation of illegally obtained assets following proceedings which are not subject to a finding of a criminal offence.

As a consequence, EU law as well as the laws of EU Member States are de facto free to establish and order non-conviction based confiscations, which are finally “released” from making reference to any pending or adjudicated criminal procedures. This is an important step forward into the right direction of full and correct compliance with the international standards for fighting corruption, money laundering and financing of terrorism.

 

See full article at Non-conviction based confiscation.

 

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[1] See Framework Decision of 24 February 2005, no. 2005/212/JHA of the Council (on the confiscation of assets, instruments and proceeds of crime), as well as the directive of 3 April 2014, n. 2014/42/EU of the European Parliament and of the Council (on the freezing and confiscation of capital goods and proceeds from crime in the European Union).

[2] Article 5 (1) of the aforementioned directive states, in particular, that Member States must take « the necessary measures to be able to confiscate, in whole or in part, the assets belonging to a person convicted of an offense that could, directly or indirectly, bring an economic advantage, where the judicial authority, based on the circumstances of the case, including specific facts and available evidence, such as the fact that the value of the assets is disproportionate to the convicted person’s legitimate income, is convinced that the goods in question derive from criminal activities. »

[3] Countries should consider adopting measures that allow laundered property, proceeds or instrumentalities to be confiscated without requiring a criminal conviction, to the extent that such a requirement is consistent with the principles of their domestic law

[4] This recommendation requires that an authority take expeditious action in response to requests by foreign countries to identify property which may be subject to confiscation.

[5] See Judgment in Case C-234/18, Komisia za protivodeystvie na koruptsiyata i za otnemane na nezakonno pridobitoto imushtestvo v BP and Others, at http://curia.europa.eu/juris/celex.jsf?celex=62018CJ0234&lang1=en&type=TXT&ancre=

[6] Council Framework Decision 2005/212/JHA of 24 February 2005 on Confiscation of Crime-Related Proceeds, Instrumentalities and Property (OJ 2005 L 68, p. 49)

 

 

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