Organised crime is one of the greatest threats to the security of the European Union. According to Europol, more than 5,000 organised crime groups are currently under investigation in Europe. Organised crime is profit-driven and its illegal activities generate huge profits: the proceeds of organised crime within the EU are currently estimated at about €110 billion per year (PDF).
The confiscation and recovery of proceeds from crime deprive criminals of what they have worked hard to acquire and could, therefore, have a deterrent effect by strengthening the notion that “crime could not pay”. The asset recovery process includes several phases:
- identification and tracing of the illegally acquired assets;
- freezing and seizure of the assets with a view to their possible subsequent confiscation;
- management of frozen and seized assets to preserve their value;
- confiscation of the illegally acquired assets;
- disposal of the confiscated assets, which could include their reuse for public or social purposes.
Ensuring a common approach to confiscation
Confiscation is a strategic priority in the EU's fight against organised crime and, as such, is reflected in the EU Internal Security Strategy in Action. The 2017 Commission Staff Working Document on the Comprehensive Assessment of EU Security Policy acknowledged that the legal framework in the area is well developed, but also stressed the necessity to further improve it. Crucially, substantial efforts have been made at the EU level to better trace and confiscate the proceeds of organised crime.
In 2014, the European Parliament and the Council adopted Directive 2014/42/EU (‘the Directive’), which sets minimum rules for the freezing, management and confiscation of criminal assets. Member States were obliged to transpose its provisions into national law by 4 October 2016. The Directive introduced:
- provisions on non-conviction based confiscation (at least if the accused or suspected person absconds or is ill);
- provisions on extended confiscation for a specific list of criminal offences;
- provisions on third-party confiscation;
- clarifications on the freezing of property with a view to subsequent confiscation, including ‘urgent’ freezing;
- strict safeguards, ensuring that the rights of parties, affected by freezing or confiscation proceedings are upheld;
- provisions on the management of frozen and confiscated property;
- provisions requiring Member States to collect and maintain comprehensive statistics on freezing and confiscation.
In June 2020 the Commission adopted a report which assesses the implementation of the Directive 2014/42/EU. The report also follows on from the Commission staff working document on the analysis of non-conviction-based confiscation in the EU (PDF) that was adopted in 2019 and responds to a request of the European Parliament and the Council to assess the feasibility and possible benefits of introducing additional common rules on non-conviction based confiscation . The report also examines the work of the Asset Recovery Offices, established by Council Decision 2007/845/JHA, and the challenges they face when carrying out their day-to-day tasks.
In addition to Directive 2014/42/EU, the adoption of Regulation (EU) 2018/1805 on the mutual recognition of freezing and confiscation orders is another significant milestone in the area of asset recovery. The Regulation aims to facilitate cross-border asset recovery and make the freezing and confiscation of criminal assets across the EU quicker and simpler. It will apply to all freezing and confiscation orders issued within the framework of proceedings in criminal matters, thus including conviction and non-conviction based confiscation. The Regulation will become applicable as from 19 December 2020.
Tracing and identifying criminal assets
The faster the tracing of assets derived from crime is, the more effective the confiscation and recovery of criminal profits can be. National Asset Recovery Offices (AROs) help in depriving criminals from their criminal profits. They identify assets that have been illegally acquired on their territories and facilitate the exchanges of relevant information at European level.
Following the Decision requiring EU States to set up these National Asset Recovery Offices(AROs) (PDF), the Commission launched an informal Platform to further enhance their EU-level cooperation on and coordination of exchanges of information and best practices. The Comprehensive Assessment of EU Security Policy confirmed that AROs play a fundamental role in the tracing of proceeds of crime and highlighted the substantial increase in information exchange between AROs (from 539 exchanges in SIENA in 2012 to over 7,659 in 2019).
The report ‘Asset recovery and confiscation: ensuring that crime does not pay’ (PDF) also highlighted a number of points which could further strengthen the capacity of the Asset Recovery Offices to trace and identify criminal assets. These include:
- the swift access by Asset Recovery Offices to a minimum set of data, held in national registries and databases;
- the need to exchange information via SIENA to enable the swift and secure communication of crime-related information;
- the need to enhance the Asset Recovery Offices’ powers (for example, urgent freezing powers and the ability to trace assets following a final criminal conviction);
- the need to set fixed and strict time limits within which an Asset Recovery Office must respond to a request by a counterpart.
Other important policies
Organised crime groups are quick to adapt modern technology to their operations and operate on an international scale, usually in more than one Member State. In order to combat organised crime more effectively, investigators should be enabled to follow, freeze and confiscate money transferred to bank accounts in different countries. Measures have been taken at the EU level to ensure swifter access to information. Directive 2019/1153 on the use of financial and other information to combat serious crimes grants law enforcement authorities and Asset Recovery Offices with direct access to bank account information for the purposes of fighting serious crime and aims to improve the cooperation between law enforcement authorities and Financial Intelligence Units and facilitate the exchange of information between Financial Intelligence Units.