“Crime does not pay”

The confiscation and recovery of proceeds of crime are a powerful means for fighting organised crime effectively. With this communication, the Commission is affirming its commitment to support the development of confiscation-related legislative and non-legislative measures.

ACT

Communication from the Commission to the European Parliament and the Council of 20 November 2008 – Proceeds of organised crime: ensuring that “crime does not pay” [COM(2008) 766 final – Not published in the Official Journal].

SUMMARY

The confiscation and recovery of criminal assets, as well as international cooperation in this field, are essential to fight organised crime in the European Union (EU). However, the results achieved in this area are modest if compared to the estimated revenues of organised crime, and the legal procedures in Member States have not yet been fully harmonised.

The existing EU legal framework consists of Framework Decisions:

• 2001/500/JHA on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime;
• 2003/577/JHA on the execution of orders freezing property or evidence;
• 2005/212/JHA on confiscation of crime-related proceeds, instrumentalities and property;
• 2006/783/JHA on the mutual recognition of confiscation orders.

These aim to ensure that a common approach prevails for confiscating and recovering the proceeds of crime. Nevertheless, implementation at national level remains incomplete with regard to Framework Decisions 2003/577/JHA and 2005/212/JHA. It is still too early to assess the implementation of Framework Decision 2006/783/JHA. The flawed implementation may be the result of a lack of clarity and coherence in the texts. Consequently, the Commission proposes that the existing EU legal framework be recast.

At the same time, the Commission proposes to proceed with discussions on the basis of Member States’ experience, in order to extend certain legal concepts and introduce new rules for confiscation. The focus would be on:

• non-conviction based (civil) confiscation, which could be allowed when assets are suspected to be proceeds of crime and the suspect is not available to be prosecuted (dead or a fugitive);
• “unjustified” assets, owning of which should be made a criminal offence when they are not proportionate to the income declared by a person who has regular contacts with known criminals;
• ensuring mutual recognition of freezing and confiscation orders in the EU, irrespective of their nature (criminal or civil);
• extending the scope of mandatory confiscation to cases where a conviction was issued for certain serious criminal offences;
• the obligatory provision of information on the bank accounts and banking operations of identified persons, thereby putting into effect the provisions of the 2001 Protocol to the EU Convention on Mutual Legal Assistance in Criminal Matters, which remains to be ratified by a number of countries.

Cooperation between Member States needs to be further improved, in order to enable national authorities to exchange information more swiftly and thus enhance the identification of criminal assets. To this end, the Commission is encouraging Member States to proceed with the transposition of Council Decision 2007/845/JHA, whereby national Asset Recovery Offices (AROs) are to be established. For the moment, not all Member States have designated such offices, where they have, the structures, powers and practices vary greatly. The Commission recommends that AROs are established as national contact points for all confiscation-related activities with:

• a multidisciplinary structure and expertise from a variety of related fields;
• a standardised secure channel of communication for easier and faster exchanges of information;
• the necessary powers to identify, trace and provisionally freeze assets;
• Europol coordinating their operational activities to ensure the rapid exchange of information;
• Eurojust facilitating their cooperation with judicial authorities as well as the mutual recognition of freezing and confiscation orders.

It is also essential to enhance cooperation with third countries on confiscation issues. Consequently, the Commission will continue to promote the ratification and implementation by the EU and Member States of the international conventions that contain provisions on the confiscation of criminal proceeds, such as the:

• UN Convention against Transnational Organised Crime (UNTOC);
• UN Convention against Corruption (UNCAC);
• Council of Europe Conventions on Money Laundering and Confiscation (“Strasbourg Conventions”).

These conventions aim at promoting international cooperation in the identification, tracing, freezing and confiscation of criminal assets. Nevertheless, cooperation with third countries needs to be developed further, in particular through the promotion of asset-sharing agreements as well as the sharing of best practices.

The Commission also encourages the take-up of non-legislative measures, such as:

• enhanced tools relating to the identification and tracing of assets, including centralised national registers to which the AROs should have access, and a list on outstanding freezing and confiscation orders in the EU;
• a common EU training programme for financial investigations and criminal analysis, development of which is currently underway;
• a methodology through which comparable statistics on frozen and confiscated assets may be made available, which is being developed in the context of the EU Action Plan 2006-10 on crime statistics.

Last updated: 22.05.2009