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Non-conviction based confiscation in the European Union—an assessment of Art. 5 of the proposal for a directive of the European Parliament and of the Council on the freezing and confiscation of proceeds of crime in the European Union

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Abstract

In this paper the author examines the non-conviction based confiscation system recently proposed by the European Commission in the draft directive on the freezing and confiscation of proceeds of crime in the European Union. Focusing on Art. 5 of the proposed Directive, he compares the legislative solution to the more traditional notion of non-conviction based confiscation legislation used in common-law jurisdictions.

Non-conviction based confiscation is a notion that allows property to be confiscated without the need to obtain a criminal conviction against the owner; this is done by filing civil action against the property itself. Many common law jurisdictions use this model and international bodies such as the United Nations Convention against Corruption (UNCAC), the Financial Action Task Force and the G8 have laid down provisions for this system. The need for this kind of policy comes from the difficulty of confiscating criminal assets when a criminal conviction is needed first. Instead, non-conviction based confiscation allows the link between the property and the crime to be established directly and on the balance of probabilities.

The author finds that the Commission’s proposal differs widely from commonly known non-conviction based confiscation law, primarily as it suggests proceedings would be conducted within a criminal law frame. He concludes that European Union Commission’s proposal would be less effective than the common law non-conviction based confiscation model, as it still faces the very problems the non-conviction based confiscation system seeks to avoid.

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Notes

  1. Smith/Owen [12], pp. 1–2.

  2. Cassella [2], pp. 24–25.

  3. Ennis [4], p. 176.

  4. Cassella [2], pp. 29–30.

  5. Kennedy [8], p. 132 and Stephenson/Grey/Power/Brun/Dunker/Panjer [14], p. 66.

  6. Nikolov [10], p. 66.

  7. Claman [3], p. 347.

  8. Greenberg/Samuel/Grant/ Grey [6], p. 9.

  9. Op.cit.

  10. FATF: The FATF Recommendations. International Standards on Combating Money Laundering and the Financing of Terrorism & Profileration, February 2012 p. 12.

  11. Resolution 1617 (2005) adopted by the Security Council at its 5244th meeting on 29 July 2005 para. 7.

  12. Stessens [15], p. 12.

  13. Ficher [5], p. 1782.

  14. Hotte/Heem [7], pp. 164–168 and p. 177.

  15. Sproat [13], pp. 146–147 and Rees/ Fischer/ Thomas [11], pp. 1–2.

  16. Proposal p. 2.

  17. Commission staff working paper. Accompanying document to the Proposal for a directive of the European Parliament and the Council on the freezing and confiscation of proceeds of crime in the European Union, Impact assessment, SWD (2012) 31 final, Brussels 12.3.2012, p. 19.

  18. Cassella [1], p. 10.

  19. Serious Organised Crime Agency: Annual Report and Accounts 2010/2011, London 2011, p. 81.

  20. McKenna/Egan [9], p. 92.

  21. European Commission: Proposal for a directive of the European Parliament and of the Council on the freezing and confiscation of proceeds of crime in the European Union (COM 2012) 85 final, 2012/0036 (COD), Brussels 12.3.2012 (Proposal), p. 11.

  22. Rees/Fischer/Thomas 2009, p. 165.

  23. McKenna/Egan 2009, pp. 68–74.

  24. novinite.com. Sofia News Agency: “Vice President: Civil Confiscation in EU Was Inspired by Bulgaria, published 26 March 2012 (http://www.novinite.com/view_news.php?id=137893).

  25. novinite.com. Sofia News Agency: Bulgaria Passes Controversial Illegal Assets Law in Dark of Night, published 27 April 2012 (http://www.novinite.com/view_news.php?id=138848).

  26. Proposal p. 9.

  27. Dassa Foundation and Others v. Liechtenstein, Application no. 696/05, Decision of 10 July 2007, “The Law”, C. Complaint under Art. 7 of the Convention.

  28. E.g. Engel and Others v. the Netherlands, Application no. 51700/71; 5101/71; 5102/71; 5354/72; 5370/72, plenary judgment of 8 June 1976 paras. 80-85 and Jussila v. Finland, Application no. 73053/01, Judgment of 23 November 2003 paras. 30–31.

  29. Phillips v. the United Kingdom, Application no. 41087/98, judgment of 5 July 2001 paras. 34–36 with further references.

  30. Sejdovic v. Italy, Application no. 36581/00, Grand Chamber Judgment of 1 March 2006 para. 81.

  31. Para. 82.

  32. Sejdovic v. Italy, Application no. 36581/00, Grand Chamber Judgment of 1 March 2006 paras. 86–88.

  33. Application no. 19958/92, Judgment of 29 August 1997.

  34. Para. 48.

  35. Proposal p. 11.

  36. Application no. 37568/97, Judgment of 3 October 2002.

  37. Para. 67.

  38. Young [16], p. 5.

  39. Op.cit.

  40. Smith/Owen [12].

  41. McKenna/Egan [9].

  42. Smith/Owen [12].

References

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  2. Cassella, S.D.: An overview of asset forfeiture in the United States. In: Young, S.N.M.: Civil Forfeiture of Criminal Property. Legal Measures for Targeting the Proceeds of Crime. Cheltenham/Northampton (2009)

  3. Claman, D.: The promise and limitations of asset recovery under the UNCAC. In: Pieth, M. (ed.) Recovering Stolen Assets. Bern (2008)

  4. Ennis, E.: An uncertain precedent: United states v. Santos and the possibility of a legislative remedy. Cornell Law Rev. (2009/2010)

  5. Ficher, T.: Strafgesetzbuch und Nebengesetze, 59. Auflage, München (2012)

  6. Greenberg, T.S., Samuel, L.M., Grant, W., Grey, L.: Stolen Asset Recovery. A Good Practices Guide for Non-conviction Based Asset Forfeiture. Washington (2009)

  7. Hotte, D.G., Heem, V.: La lutte contre le blanchiment des capitaux. Paris (2004)

  8. Kennedy: Designing a civil forfeiture system: an issues list for policymakers and legislators. J. Financ. Crime 13(2) (2006)

  9. McKenna, F.J., Egan, K.: Ireland: a multi-disciplinary approach to proceeds of crime. In: Young, S.N.M., Civil Forfeiture of Criminal Property. Legal Measures for Targeting the Proceeds of Crime. Cheltenham/Nothampton (2009)

  10. Nikolov, N.: General characteristics of civil forfeiture. J. Money Laund. Control 14(1) (2011)

  11. Rees, E., Fischer, R., Thomas, R.: The Blackstone’s Guide to the Proceeds of Crime Act 2002, 4th edn. Oxford (2011)

  12. Smith, I., Owen, T.: Asset Recovery: Criminal Confiscation and Civil Recovery. London (2003)

  13. Sproat, P.A.: To what extent is the UK’s anti-money laundering and asset recovery regime used against organised crime? J. Money Laund. Control 12(2) (2009)

  14. Stephenson, K.M., Grey, L., Power, R., Brun, J.-P., Dunker, G., Panjer, M.: Barriers to Asset Recovery. Washington (2011)

  15. Stessens, G.: Money Laundering: A new International Law Enforcement Model, 3rd edn. Cambridge (2002)

  16. Young, S.N.M.: Introduction. In: Young, S.N.M., Civil Forfeiture of Criminal Property. Legal Measures for Targeting the Proceeds of Crime. Cheltenham/Northampton (2009)

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Authors and Affiliations

  1. University of Tromsø, 9037, Tromsø, Norway

    Jon Petter Rui

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  1. Jon Petter Rui
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Correspondence to Jon Petter Rui.

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The article is based on my presentation held at the ERA Conference “Towards More Effective Asset Recovery in the EU” the 3 May 2012 in Copenhagen.

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Rui, J.P. Non-conviction based confiscation in the European Union—an assessment of Art. 5 of the proposal for a directive of the European Parliament and of the Council on the freezing and confiscation of proceeds of crime in the European Union. ERA Forum 13, 349–360 (2012). https://doi.org/10.1007/s12027-012-0269-5

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