Confiscation and freezing of assets
Throughout the EU, it has become increasingly important to the State to be able to freeze and confiscate property related to the committing of an offence and thus deprive criminals of their assets obtained through criminality. Due to the increasingly cross-border nature of criminal activity, particularly terrorism and other organised crime, closer cooperation between EU national judicial authorities is required for the legislation to remain effective.
Why should the EU act?
Traditional judicial cooperation in criminal matters is based on a variety of international legal instruments. These are mainly characterised by the 'request' principle whereby one sovereign State makes a request to another sovereign State, which then decides whether or not to comply with it. This system can be very slow and inefficient.
Modern criminals seek to take advantage of these inefficiencies by both carrying out criminal activities across borders and by acquiring and keeping assets in foreign countries.
- EU citizens are able to move freely within Europe as well as buy property and reside abroad. The right to free movement of persons needs to be accompanied by measures making it possible to deliver justice in cases with a foreign dimension, for example whenever illegally acquired property is located abroad.
- Freezing and confiscation are effective tools used in the fight against crime as they aim to recover property derived from illegal sources. Freezing aims to temporarily retain property pending a final decision in the case. This means that assets cannot be disposed of before the case is finished. Confiscation is a final measure that stops criminals from accessing property obtained from breaking the law. It works by taking this property away permanently from the criminal or their accomplices.
Thus, an efficient and effective system of seizure and confiscation of criminal assets helps to combat crime while continuing to safeguard the interests of European citizens.
What has been done so far?
- In 2003, the EU adopted the Framework Decision on the execution in the EU of orders freezing property or evidence;
- In 2006, the EU adopted the Framework Decision on the application of the principle of mutual recognition for confiscation orders.
The aim of these instruments is to allow the freezing or confiscation of criminal property in country A where the alleged criminal is being prosecuted in country B.
The Framework Decisions allow a judicial authority in one EU country to send an order to freeze or confiscate property directly to the judicial authority in another EU country where it will be recognised and executed without any further formality. The execution of the order must take place unless one of the few grounds for non-recognition is invoked.
An Austrian businessman who is accused of belonging to an organised crime syndicate owns property in another EU country, for example the United Kingdom [UK].
- During the proceedings, the Austrian court decides to freeze his bank account as well as two cars in Austria and a mansion in the UK. Knowing that the accused has property in the UK, the court sends the UK a request to freeze the assets located there, namely the mansion.
- The UK authorities execute the request and freeze the assets. This means that no-one can use, sell or give away the mansion while the freezing order exists.
- If there is a conviction in Austria after the criminal trial, a request is sent to the UK for the confiscation of the assets which have already been frozen.
- The UK authorities receiving the freezing or confiscation orders from Austria do not review the case. Rather, they recognise the Austrian orders without any further formality.
- The property (here the mansion) is confiscated, ie permanently taken away from the Austrian businessman. In practice, this means that the mansion will be sold and the proceeds of the sale returned to Austria.
However, this procedure is not automatic and can be refused in a few specific circumstances, for example when the same person has already been convicted of the same offence or when the person is covered by immunity or a certain privilege making prosecution impossible.
Implementation in national law
The deadline for transposition passed in 2005 for the Framework Decision on freezing and in 2008 for the Framework Decision on confiscation. The Commission's reports on the implementation of both instruments show that not all the EU countries are complying with the basic provisions.
This fact makes overall transposition patchy and less effective in practice than had been expected.