Proceedings in criminal matters – asset recovery and confiscation

KEY POINTS

Scope

The directive applies to a range of criminal offences contained in European Union (EU) legislation, from terrorism and drug and human trafficking to money laundering and organised crime.

Tracing and identification

EU Member States must:

• systematically launch asset-tracing investigations parallel to criminal investigations into high-revenue-generating criminal offences committed by organised crime;
• ensure swift tracing and identification of instrumentalities¹, proceeds² or property³ that is, or might become, subject to a freezing⁴ or confiscation⁵ order, even after a final criminal conviction;
• establish asset-recovery offices with the power to:
  • support and cooperate with other national authorities, the European Public Prosecutors Office (EPPO) and counterparts in non-EU countries;
  • act on a freezing or confiscation order issued in another Member State;
  • request cooperation from relevant authorities when necessary;
  • trace and identify property belonging to people or bodies subject to EU restrictive measures;
  • access information held in various national databases and registers and the Secure Information Exchange Network Application;
  • reply to information requests from another Member State within specific time limits.

Freezing and confiscation

Member States must take measures to enable:

• the freezing of property;
• asset recovery offices to urgently freeze property in cross-border cases, where no other competent authority can act and where there is an imminent risk that the property may disappear;
• the confiscation, in whole or in part, of instrumentalities, proceeds or property:
  • from a criminal offence subject to a final conviction,
  • of the same value as a transfer a suspect or accused had made to a third party,
  • from a third party who knew, or ought to have known, the transfer was made to avoid confiscation,
  • where the criminal offence could result in direct or indirect economic benefit and the property is derived from criminal conduct (extended confiscation),
  • where criminal proceedings could not be completed for reasons such as the illness, disappearance or death of the accused (non-conviction-based confiscation), but could have led to a conviction if it weres not for one of the circumstances listed,
  • where a national court is satisfied that unexplained wealth stems from criminal conduct.
• Member States must ensure the claims of victims of a criminal offence are taken into account in asset-tracing, freezing and confiscation proceedings. Member States may also use, when appropriate, confiscated property for public interest or social purposes.

Management

Member States must ensure:

• the establishment of asset management offices that manage frozen and confiscated property or support other competent authorities with the management of property;
• efficient management of frozen and confiscated property until it is disposed of;
• asset management planning before or shortly after freezing property;
• frozen properties may be transferred or sold before actual confiscation (interlocutory sales) where the asset is perishable, rapidly depreciating, involves disproportionate costs or requires specific expertise.

Safeguards

Member States must ensure individuals affected by freezing and confiscation and interlocutory sales orders have the necessary safeguards, including the right to a fair trial and to an effective remedy.

Further rules

Member States must:

• adopt a national strategy on asset recovery by 24 May 2027 and update it at least every five years;
• ensure asset recovery and management offices have appropriately qualified staff and the necessary financial, technical and technological resources;
• collect and maintain comprehensive statistics on their confiscation systems, sending these to the European Commission by the end of the following year;
• notify the Commission, which records the data in an online register, of their competent authorities and contact points by 24 May 2027;
• bring their laws, regulations and administrative provisions into line with the directive by 23 November 2026.

The Commission:

• establishes an asset-recovery and confiscation cooperation network involving asset recovery offices, asset management offices and the European Union Agency for Law Enforcement Cooperation (Europol);
• submits to the European Parliament and the Council of the European Union an implementation report by 24 November 2028 and an evaluation report by 24 November 2031.

The directive replaces Framework Decision 2005/212/JHA, Decision 2007/845/JHA and Directive 2014/42/EU.

The directive does not apply to Denmark or Ireland.