4/15/20151 A new EU legal framework on confiscation The new Commission proposal for a Directive on confiscation Sebastiano Tiné European Commission DG Home Affairs 6th ARO Platform meeting Brussels, 23 April 2012

4/15/20152 Introduction – key features of EU legislation on confiscation  The existing EU legal framework only applies to criminal proceedings and the issuance of confiscation orders generally requires a criminal conviction.  Some Member States and third countries apply also non-conviction based (NCB) procedures, which have proven to be very effective in targeting criminal assets. There are no binding rules on NCB confiscation at EU level.  There are no binding provisions at EU level on confiscating assets transferred to third parties.

4/15/20153 The EU legislative framework  Five EU instruments aim at ensuring a common approach to confiscation: Framework Decision 2001/500/JHA on money laundering, asset freezing and confiscation; Framework Decision 2003/577/JHA on the mutual recognition of freezing orders Framework Decision 2005/212/JHA on extended confiscation Framework Decision 2006/783/JHA on the mutual recognition of confiscation orders Council Decision 2007/845/JHA on Asset Recovery Offices

4/15/20154 Framework Decision on Extended Confiscation (2005)  Obligation to enable confiscation for offences providing deprivation of liberty for more than 1 year  Aims at providing extended confiscation powers  Minimum rules allowing confiscation for serious crimes (organised crime and terrorism) if offence generated financial gain  Provides alternative criteria for extended confiscation (property derived from criminal activities; from similar criminal activities; value of property disproportionate to lawful income)  Optional provisions on third party confiscation and non-conviction based confiscation  Commission issued implementation report December 2007 highlighting shortcomings in implementation

4/15/ Context of the proposal  Organised crime is profit-driven and creates enormous illegal wealth every year.  Estimates on the size of criminal profits in some Member States are very high (eg € 150 billion in Italy in 2011).  Criminal groups operate across the borders and increasingly acquire and hide assets in other Member States.  Compared to the estimated profits made from organised crime, the amounts confiscated in EU Member States remain modest.

4/15/20156 Rationale for the proposal  Extensive impact assessment study conducted in  Conclusion: Today's tools for freezing, managing and confiscating criminal assets are not effective enough.  The current EU legal framework on confiscation and asset recovery is inadequate and still incompletely implemented.  It has a narrower scope than the legislation in force in several Member States. More harmonisation is needed.

4/15/20157 Policy context of the proposal  Based on the Commission Communication on the proceeds of organised crime (2008)  In line with the Stockholm Programme (2009)  Responds to JHA Council Conclusions (June 2010) calling on the Commission to consider strengthening the EU legal framework.  Announced in Commission Communication on a EU Internal Security Strategy (November 2010)  Responds to the European Parliament Report on organised crime (2011), urging the Commission to propose new legislation.

4/15/ Objectives of the Commission proposal  Facilitate the confiscation of the proceeds of crime  In particular the Directive aims at: attacking the financial incentive which drives most organised crime protecting the EU licit economy against infiltration by criminal groups returning criminal assets to governments and citizens.  It draws on international Conventions and best practice recommendations.  It aims at simplifying existing rules and filling gaps which have benefited criminals until now.

4/15/20159 Scope (Art.2)  Under the Lisbon Treaty substantive criminal law provisions at EU level can be adopted only for specific offences («the Eurocrimes»)  No longer possible to have EU provisions on confiscation which apply to all crimes  The new Directive applies to specific serious offences already harmonised at EU level (eg drug trafficking, trafficking of human beings, sexual exploitation of children, money laundering, corruption, organised crime, cybercrime)

4/15/ Extended confiscation (Art. 4)  Clearer and more efficient rules to confiscate assets not directly linked to a specific crime  Scope is now widened to all Eurocrimes harmonised at EU level  Only one minimum criterion for extended confiscation (“similar criminal activities by the convicted person”) instead of the previous three alternative/cumulative criteria  Less stringent burden of proof (from «court fully convinced» to «substantially more probable»)  Cases of exclusion of extended confiscation (previous acquittal, « ne bis in idem », prescription)

4/15/ Non-conviction based confiscation (Art. 5)  Possible in limited cases where a criminal conviction is not possible because the suspect is dead, permanently ill or is a fugitive  Requires evidence that the person could have been convicted  Directive leaves to Member States whether NCB procedures should be held in a criminal, administrative or civil court

4/15/ Third party confiscation (Art. 6)  Will mitigate the effects of the practice of transferring property to friends or relatives with a view to avoiding confiscation.  Allows confiscation of assets transferred for less than market value by the suspect to a third party who should have realised that it is a result of crime.  Also applies to licit assets transferred in order to avoid value confiscation  Requires assessment that confiscation of the assets of the suspect is unlikely to succeed

4/15/ Freezing (Art. 7)  Introduces harmonised EU provisions enabling freezing in urgent cases  Provides for precautionary freezing powers in urgent cases, for assets that risk disappearing if no action is taken  Precautionary freezing powers can be exercised prior to seeking a court order or pending its request and are subject to confirmation by a court.

4/15/ Effective execution of confiscation orders (Art. 9)  Will allow the police and prosecutors to continue investigations on the assets of a convicted person when confiscation was ordered, but insufficient assets were confiscated.  Measures can be taken to confiscate assets for the full amount of the unexecuted confiscation order  This provision should prevent assets successfully hidden by criminals from “resurfacing” years later. and will stop criminals from ultimately enjoying their gains.

4/15/ Safeguards (Art. 8)  The proposal introduces safeguards at EU level in line with the EU Charter on Fundamental Rights (instead of making reference to national safeguards).  Rationale: balancing far reaching confiscation measures with the respect of the right to property and other fundamental rights  Safeguards aim at ensuring the respect of the presumption of innocence, the right to a fair trial, the existence of effective judicial remedies and the right to be informed on how to exercise them.

4/15/ Asset Management (Art. 10)  Objective: decreases in the value of assets frozen before confiscation should be avoided  Requires Member States to have in place centralised (Asset Management Offices) or equivalent structures in order to properly manage frozen assets  Requires Member States to grant to their national agencies the powers to realise frozen assets which are liable to decline in value

4/15/ Other provisions  Requires Member States to regularly collect statistics on freezing and confiscation and send them to the Commission annually  The proposal does not fully replace former Framework Decisions (2001/500 JHA and 2005/212/JHA) in order to maintain the obligation for Member States to enable confiscation for any criminal offence

4/15/ /15/ Next steps  First reading of the proposal in Council expected under Danish Presidency of the Union  Future Cypriot Presidency indicated this proposal as one of their priorities  European Parliament is taking initial steps to prepare their report