• Key words: confiscation, judicial cooperation in criminal matters, organised crime, mutual recognition, preservation measure, freezing of bank accounts, seizure.
  
• Related cards: Criminal Law Cooperation, Organised Crime, Money laundering.
• Link to the SCOREBOARD of the European Commission.
• Links to SCAD +
  • Judicial cooperation in criminal matter.

• SUMMARY: Confiscation is a court-ordered measure resulting in the permanent deprivation of property. Used to deprive crime of its financial gain, confiscation is a highly effective instrument in the fight against organised crime.
  The "proceeds" from crime refer to any economic advantage from criminal offences. This interpretation therefore covers the financial gain from criminal activities.
  
• Relevant legal texts:
• • Joint Action 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.
  • Council Framework Decision of 26 June 2001, on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime.
  • Convention of the Council of Europe of 23 November 2001, on Cybercrime.
  • Initiative of the Kingdom of Denmark with a view to the adoption of a Council Framework Decision on the execution in the European Union of confiscation orders.
  • Framework Decision of 24 February 2005, on Confiscation of Crime-related Proceeds, Instrumentalities and Property.
  • Convention of the Council of Europe of 16 May 2005, on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism.
• Main European Parliament Resolutions:
  • Resolution on 14 November 2000, on the initiative of the French Republic with a view to adopting a Council Framework on the initiative of the French Republic with a view to adopting a Council Framework Decision on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds from crime. (MARINHO report adopted in the resolution)
  • Resolution on 20 november 2002, on the initiative of the Kingdom of Denmark with a view to the adoption of a Council Framework Decision on confiscation of crime-related proceeds, instrumentalities and property. (DI LELLO FINUOLI report adopted in the resolution)
  • Resolution on 20 november 2002, on the initiative of the Kingdom of Denmark with a view to the adoption of a Council Framework Decision on the execution in the European Union of confiscation orders. (DI LELLO FINUOLI report adopted in the resolution)

Assistance on matters of confiscation has been one of the key issues of international cooperation in criminal matters since the 1980s.
It is addressed in the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, signed in Vienna on 19 December 1988, and in Council of Europe Convention 141, which is the benchmark for these matters at European level. The Council of Europe opened to signature on 16 May 2005 a Convention that incorporates the content of Convention 141 and strengthens its measures.

The EU Member States, which have all ratified the Convention, have adopted various texts to improve the mechanism laid down in the Convention:

• a Joint Action (3 December 1998) reinforcing the mechanism of the 1990 Convention by introducing a number of “good practices” for confiscation requests;
• a Framework Decision (26 June 2001) supplementing the Joint Action and providing for the confiscation of the instrumentalities and proceeds of crimes punishable by imprisonment of over one year. Confiscation concerns either the proceeds directly or property whose value corresponds to such proceeds ("value confiscation"). The Framework Decision authorises the States to refuse to confiscate property of equivalent value in cases where that value is less than 4,000 euros.

The Commission made public on 6 April 2004 a report on Member State implementation of the Framework Decision. The report notes the poor level of transmission of information by States. The Commission calls on the States to proceed with full transposition of the text as soon as possible.

In parallel, the United Nations drew up:

• a Convention against Transnational Organised Crime, which was opened for signature on 15 November 2002,
• a Convention against Corruption, opened for signature on 9 December 2003.

Both texts establish measures relating to the confiscation of the proceeds of crime.

Extending the principle of mutual recognition of criminal decisions on confiscation of the proceeds from crime is currently a major focal point of the European Union's work in criminal matters. Meant to revolutionise the confiscation mechanism, this effort is the top priority of the Council's Action Programme of 30 November 2000 to implement the principle of mutual recognition in criminal matters.

Confiscation procedures are frequently long and complex and to prevent the proceeds of crime from disappearing while procedures are under way, the States may enact preservation measures (1.) consisting in securing property which may be the subject of a request for confiscation. (2.)

1. The preservation measures

The Convention of 8 November 1990 establishes that, at the request of another State that has initiated a confiscation action, a State must take any preservation measures as may be necessary.
The Convention also obliges States to adopt any legislative measures necessary to allow the execution of preservation measures.
The approximation of laws was seen as vital because international cooperation necessitates that States have at least comparable instruments.

The Council of Europe Convention on Cybercrime of 23 November 2001 establishes provisions allowing the seizure of computer data. The authorities may, by virtue of this text, seize a computer-data storage medium or make a copy of it.
It also provides that each State must take measures for the "expeditions preservation" of computer data. Preservation means that the party in possession of the data and Internet service providers must store data and preserve its integrity. Preservation is more flexible than seizure since it:

• is carried out by the party in possession of the data rather than by law enforcement authorities,
• does not necessarily require that data be "frozen", i.e. made inaccessible to legitimate users.

Preservation measures are governed inside the EU by the principle of mutual recognition of decisions in criminal matters.
The Member States reached a political agreement on 22 July 2003 on the content of a Framework Decision on the execution of orders freezing assets or evidence. This decision aims to give full and direct effect throughout the Union to a decision issued by the judicial authority of a Member State concerning any operation related to property that could be the subject of a confiscation order or constitute evidence.
The Framework Decision establishes that an order must be forwarded using a standard certificate by the authority of the issuing State to the authority of the executing State and executed forthwith, as if it were a national decision.

The Convention of 16 May 2005 provides for the creation of a central authority in each Member State, to serve, if necessary, as the entry or exit point for requests for assistance with preservation measures.
The Commission Communication of 29 November 2005 also proposes that each Member State create a central structure playing an operational role. It would be composed of different national authorities (police, customs, taxation services) and would have the aim of identifying and seizing property.

2. Confiscation measures

Concerning confiscation proper, the Convention of 8 November 1990 obliges the executing State to execute a request from a court in the issuing State. It provides two means for doing so. The court may:

• either purely and simply execute a confiscation decision,
• or present the request to its authorities to obtain a confiscation decision.

The executing authority is obliged to execute the confiscation order unless it has grounds for refusal recognised by the Convention.

The Danish Presidency proposed on 14 June 2002 an initiative meant to facilitate judicial assistance by introducing a system of mutual recognition in the European Union of decisions concerning the confiscation of the proceeds from crime.
Like the Framework Decision on the execution in the European Union of decisions concerning the freezing of assets or evidence, the authority of the issuing State transmits the confiscation order to the authority of the executing State using a standard certificate. The issuing State must then execute the order without delay.
Moreover, the draft Framework Decision, which is modelled on the text establishing the European arrest warrant, does not require verification of the double criminality of the act, in the case of certain serious crimes such as trafficking in human beings or money laundering.

The Council adopted on 24 February 2005 a Framework Decision that reinforces the confiscation mechanism of national laws by adding more details to the proposal on mutual recognition. It grants the national authorities wider powers of confiscation by permitting, for example, the confiscation of property when it can be established that its value is disproportionate to the convicted person's lifestyle.

The Convention on Mutual Assistance in Criminal Matters of 29 May 2000 contains specific provisions on the return of property obtained by criminal means. In principle, confiscation results in the property being placed at the disposal of the State carrying out confiscation. The Convention nonetheless provides that the requested Member State may make the property available to the requesting State with a view to its restitution to the rightful owner. The text nonetheless limits this action by stating that:

• this is an option and not an obligation for the State,
• restitution must not affect the rights of bona fide third parties.

The rightful owner may initiate proceedings before the confiscation order is issued. The Framework Decision of 22 July 2003 grants the latter and bona fide third parties the right of legal remedy against a freezing order implemented under the principle of mutual recognition. Such remedy may be exercised either before a court in the State issuing the order or before a court in the State executing the order. The text nonetheless states that:

• legal remedy does not have suspensive effect;
• the substantive reasons for issuing the freezing order can only be challenged in an action brought before a court in the issuing State.

In view of the effectiveness of confiscation in the fight against organised crime, the European Parliament supports actions in this area.
Parliament, however, in a report passed on 20 November 2002 (DI LELLO FINUOLI report), maintains a vigilant attitude towards the mechanism established under the Danish initiative, which establishes that property of the spouse and of business partners may be confiscated. This process could have unfair effects on third parties: by extending the scope of confiscation to property not belonging to the individual against whom the order is issued, innocent persons could be deprived of their property.
Moreover, even if work under way leads to significant improvements of judicial assistance on confiscation orders, a great deal of work still lies ahead. Assistance is often hindered by the absence of sharing of property by the States participating in the operation. However, the idea that all parties concerned could receive their "fair share of the cake" could help improve the fight against international crime.
To this end, a draft joint action was tabled by Austria on 8 November 1999. It establishes guidelines for the sharing of confiscated property. In spite of its importance, there has been no follow-up action on the Austrian initiative.