Revision of the Directive on the freezing and confiscation of the proceeds of crime
In “Promoting our European Way of Life”
Proceeds from organised crime in Europe are estimated at around €139 billion annually. Freezing and confiscating criminal assets is an essential element of the fight against organised crime.
Directive 2014/42/EU institutes minimum standards on freezing and confiscation of instrumentalities and proceeds of crime in criminal proceedings in the EU, including extended confiscation and third-party confiscation, and introduces a limited form of non-conviction based confiscation (NCBC) in criminal proceedings in cases where the suspect is permanently ill or has fled. The directive covers the 'eurocrimes' defined in Article 83 TFEU; however, confiscation has a broader scope applying to all offences punishable with prison for at least one year.
In 2021, the Commission announced its intention to revise the 2014 Directive and the Council Decision 2007/845/JHA on national asset recovery offices (AROs). On 9 March 2021, the Commission launched a public consultation on the Inception Impact Assessment (IIA) that closed on 6 April 2021. Between 21 June and 27 September 2021, another consultation on the evaluation of the two acts was open.
The EPRS published an Implementation Appraisal of Directive 2014/42/EU in May 2022.
On 25 May 2022, the Commission adopted its proposal on revising the asset recovery system. If adopted, it will replace 5 instruments, including Council Decision 2007/845/JHA and Directive 2014/42/EU. Main provisions:
- Scope: it covers the eurocrimes, but also crimes harmonised at EU level (e.g. environmental crime, migrant smuggling and fraud) and a series of offences linked to organised crime. It will also apply to the violation of EU restrictive measures provided harmonised measures on this matter are adopted.
- Freezing and confiscation: AROs may take temporary urgent freezing measures until a freezing order is issued. The proposal provides for standard and value confiscation, following a final criminal conviction; for third party confiscation; extended confiscation; and extends the possibilities for NCBC to situations such as the death of the suspected or accused person, immunity or amnesty, or expired time limits in national law (for offences with a prison term of at least 4 years). It also allows for the confiscation of frozen assets where the court is convinced they derive from criminal activities, by assessing all circumstances, including unexplained wealth, for offences punished with a prison term of 4 years. The proposal institutes safeguards for the affected persons.
- Member States must set up at least one ARO and at least one asset management office (AMO). The proposal enhances the tasks of AROs and includes obligations on the exchange of information between AROs.
- Member States must adopt a national strategy on asset recovery and set up centralised registries with information on frozen, managed and confiscated assets. They must collect relevant statistics and send them to the Commission annually.
- Transposition: within one year of entry into force.
The directive will not apply to Denmark. Ireland has yet to decide if it takes part in the adoption of the directive.
The proposal was assigned to the Committee on Civil Liberties, Justice and Home Affairs (LIBE). The appointed rapporteur is Loránt VINCZE (EPP, Romania). The Committees on Legal Affairs (JURI) - designated as associated committee -and on Budgets (BUDG) will provide opinions.
The Czech Chamber of Deputies submitted a reasoned opinion which criticised the unexplained wealth provisions and the generalised application of extended confiscation.
The European Data Protection Supervisor's opinion of 19 July 2022 recommends to exclude from the scope of the proposal certain categories of personal data and to adopt clear national provisions regarding the purposes for which centralised registries may be accessed and searched.
The European Economic and Social Committee's opinion of 14 December 2022 calls for stronger procedural rights and safeguards for defendants in confiscation procedures and for giving clear priority to victim's rights to compensation.
In the Council, the proposal was discussed in November and December 2022.
On 14 February 2023, the LIBE draft report on the proposal was published. It proposes, inter alia, to expand the scope of the directive to other crimes; to set up a Platform on asset recovery and confiscation, composed of AROs and AMOs, to advise the Commission on the implementation of the directive and assess the national strategies; to use confiscated property for public interest or for social purposes and for giving priority to victims' claims for restitution. AROs should be provided with the necessary resources and have access (direct or indirect) to an expanded list of registries and databases. On 24 March and 3 April, JURI respectively BUDG published their opinions. LIBE adopted its report on 23 May 2023, with 50 votes in favour, 1 against and 4 abstentions. On 12 June, the EP Plenary approved the Committee's decision to enter into interinstitutional negotiations.
On 9 March 2023, EU Justice Ministers concluded that substantial progress was made on the proposal.
On 9 June 2023, the Council adopted its general approach. Among other things, the Council removes the violation of EU sanctions from the scope of asset tracing investigations and from the tasks assigned to AROs; extends the time limits for the exchange of information between AROs; clarifies that extended confiscation applies to the covered offences, if punishable with a prison term of at least 4 years; removes the condition of deprivation of liberty of at least 4 years in case of NCBC, but not for confiscation of unexplained wealth. The Council also introduces more flexibility concerning the proposed national strategies on asset recovery, the national registries and the statistics to be sent to the Commission. The transposition period is prolonged to 36 months.
Two political trilogues took place so far.
- European Commission, 2021 Commission work programme, 19 October 2020.
- Directive 2014/42/EU of the European Parliament and of the Council of 3 April 2014 on the freezing and confiscation of instrumentalities and proceeds of crime in the European Union, OJ L 127, 29.4.2014, p. 39–50.
- European Commission, Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on asset recovery and confiscation, COM/2022/245 final, 25 May 2022.
- European Commission, Asset recovery and confiscation: Ensuring that crime does not pay, June 2020.
- European Commission, Analysis of non-conviction based confiscation measures in the European Union, Staff Working Document, April 2019.
- European Commission, Inception Impact Assessment: Fighting organised crime – freezing and confiscating the proceeds of crime, March 2021.
- European Parliament Legislative Observatory, Asset recovery and confiscation, 2022/0167(COD).
- European Data Protection Supervisor, EDPS Opinion on the Proposal for a Directive of the European Parliament and of the Council on asset recovery and confiscation, 19 July 2022.
- European Economic and Social Committee, Asset recovery and confiscation, Opinion, 14 December 2022.
- Council of the EU, General Approach - Proposal for a Directive of the European Parliament and of the Council on asset recovery and confiscation, 9 June 2023.
- Revision of the EU rules on asset recovery and confiscation, EPRS Briefing, March 2023.
- European Parliament, EPRS, Mutual recognition of freezing and confiscation orders, Briefing, December 2018.
- European Commission, Study on freezing, confiscation and asset recovery : what works, what does not work : country chapters, 2022.
- European Parliament, EPRS, Revision of Directive 2014/42/EU on the freezing and confiscation of the proceeds of crime and proposal for a new directive on asset recovery offices, Implementation Appraisal, May 2022.
Authors: Carmen-Cristina Cîrlig, Members' Research Service, email@example.com