Joined Cases C‑845/19 and C‑863/19

Criminal proceedings

against

DR
and
TS

(Requests for a preliminary ruling from the Apelativen sad – Varna)

Judgment of the Court (Third Chamber), 21 October 2021

(Reference for a preliminary ruling – Judicial cooperation in criminal matters – Directive 2014/42/EU – Freezing and confiscation of instrumentalities and proceeds of crime in the European Union – Scope – Confiscation of illegally obtained assets – Economic benefit derived from a criminal offence which has not been the subject of a conviction – Article 4 – Confiscation – Article 5 – Extended confiscation – Article 6 – Confiscation from a third party – Conditions – Confiscation of money allegedly belonging to a third party – Third party having no right to appear as a party in the confiscation proceedings – Article 47 of the Charter of Fundamental Rights of the European Union)

1. Judicial cooperation in criminal matters – Freezing and confiscation of instrumentalities and proceeds of crime in the European Union – Directive 2014/42 – Scope – Offence consisting in the possession of narcotics for the purposes of their distribution – Included – All the elements inherent in the commission of that offence confined within a single Member State – Irrelevant

   (Art. 83(1), first subparagraph, TFEU; European Parliament and Council Directive 2014/42, Art. 3(g); Council Framework Decision 2004/757, Art. 2(1)(a) and (c))

   (see paragraphs 27-34, operative part 1)

2. Judicial cooperation in criminal matters – Freezing and confiscation of instrumentalities and proceeds of crime in the European Union – Directive 2014/42 – Economic benefit derived directly or indirectly from a criminal offence – Concept – Property constituting an economic benefit derived from the criminal offence that led to the conviction of its perpetrator – Property belonging to the same perpetrator derived, to the satisfaction of the national court hearing the case, from other criminal conduct – Included – Conditions – Compliance with the safeguards laid down in Article 8(8) of that directive – Offence at issue among those listed in Article 5(2) of that directive – Offence at issue liable to give rise, directly or indirectly, to economic benefit

   (European Parliament and Council Directive 2014/42, recitals 11, 19, 20 and 21 and Arts 2(1) and (2), 4(1), 5, 6 and 8(8); Council Framework Decision 2004/757, Arts 2(1)(c), 4(2)(b))

   (see paragraphs 38, 40, 44-46, 50-55, 58-60, 62, 64-67, 69-71, operative part 2)

3. Judicial cooperation in criminal matters – Freezing and confiscation of instrumentalities and proceeds of crime in the European Union – Directive 2014/42 – Fundamental rights – Right to an effective remedy – National legislation which allows for the confiscation, in favour of the State, of property belonging to a person other than the perpetrator of the offence – Person concerned having no right to appear as a party in the confiscation proceedings – Not permissible

   (Charter of Fundamental Rights of the European Union, Art. 47; European Parliament and Council Directive 2014/42, recital 33 and Art. 8(1), (7) and (9))

   (see paragraphs 75, 76, 78-85, operative part 3)

Résumé

The Court provides guidance on specific provisions of the directive on the freezing and confiscation of instrumentalities and proceeds of crime in the European Union

That directive precludes national legislation which allows for the confiscation, in favour of the State, of property allegedly belonging to a person other than the perpetrator of the criminal offence, without that person having the right to appear as a party in the confiscation proceedings

Two Bulgarian nationals (‘the persons concerned’) were convicted of the possession, in February 2019 in Varna (Bulgaria), of highly dangerous narcotics, without authorisation and with a view to their distribution. Following that criminal conviction, the Okrazhna prokuratura – Varna (Regional Public Prosecutor’s Office, Varna, Bulgaria) applied to the Okrazhen sad Varna (Regional Court, Varna, Bulgaria) for the confiscation of sums of money which had been discovered in their respective homes in the course of searches.

At the hearing before that court, the persons concerned stated that the sums of money seized belonged to members of their respective families. Those family members did not take part in the proceedings before that court, since national law does not permit them to do so. The referring court refused to authorise the confiscation of those sums of money, taking the view that the criminal offence of which the persons concerned had been convicted was not such as to generate an economic benefit. In addition, although there is evidence that the persons concerned had been selling narcotics, they had not been charged with nor convicted of such a criminal offence. The Regional Public Prosecutor’s Office, Varna, brought an appeal against that judgment, arguing that that court had failed to take account of Directive 2014/42 ( 1 ) when applying the relevant national provisions.

In those circumstances, the referring court decided to ask the Court of Justice whether Directive 2014/42 only applies in cross-border situations, and further referred questions concerning the extent of the confiscation provided for by that directive and the scope of the right to an effective remedy of a third party who claims, or in respect of whom it is claimed, that he or she is the owner of property which is subject to confiscation. In its judgment, the Court thus gives a ruling on questions of crucial importance for defining the scope of Directive 2014/42 and the interpretation of some of its key concepts.

Findings of the Court

In the first place, the Court finds that the possession of narcotics for the purposes of their distribution comes within the scope of Directive 2014/42, even though all the elements inherent in the commission of that offence are confined within a single Member State. Under the FEU Treaty, ( 2 ) such an offence is a particularly serious crime with a cross-border dimension, as referred to in that treaty. Consequently, the EU legislature is competent to adopt minimum harmonisation rules concerning the definition of criminal offences and sanctions in that area; that competence also covers situations in which the elements inherent in the commission of a particular offence are confined within a single Member State.

In the second place, the Court finds that Directive 2014/42 not only provides for the confiscation of property constituting an economic benefit derived from the criminal offence in respect of which the perpetrator has been convicted, but also provides for the confiscation of property belonging to that perpetrator in respect of which the national court hearing the case is satisfied that it derives from other criminal conduct. Such confiscation must, however, be carried out in compliance with the safeguards provided for in that directive ( 3 ) and is subject to the condition that the offence in respect of which the perpetrator has been convicted is among those listed in the directive ( 4 ) and that that offence is liable to give rise, directly or indirectly, to economic benefit.

As regards the first type of confiscation, it is necessary that the proceeds whose confiscation is being contemplated arise from the criminal offence in respect of which the perpetrator has been finally convicted.

As regards the second situation, which corresponds to extended confiscation, ( 5 ) the Court notes, first, that, in order to determine whether a criminal offence is liable to give rise to economic benefit, Member States may take into account the modus operandi, for example whether the offence was committed in the context of organised crime or with the intention of generating regular profits from criminal offences. ( 6 ) Secondly, the national court must be satisfied on the basis of the circumstances of the case, including the specific facts and available evidence, that the property is derived from criminal conduct. ( 7 ) To that end, that court may take account of the fact that the value of the property in question is disproportionate to the lawful income of the convicted person. ( 8 )

Lastly, confiscation from a third party ( 9 ) presupposes that it has been established that a suspected or accused person has transferred proceeds to a third party or a third party has acquired such proceeds, and that that third party was aware of the fact that the purpose of that transfer or acquisition was to avoid confiscation.

In the third place, the Court holds that Directive 2014/42, read in conjunction with Article 47 of the Charter of Fundamental Rights of the European Union, precludes national legislation which allows for the confiscation, in favour of the State, of property allegedly belonging to a person other than the perpetrator of the criminal offence, without that person having the right to appear as a party in the confiscation proceedings. That directive requires Member States to take the necessary measures to ensure that the persons affected by the measures provided for therein, including third parties who claim or in respect of whom it is claimed that they are the owner of the property whose confiscation is being contemplated, have the right to an effective remedy and a fair trial in order to uphold their rights. ( 10 ) In addition, that directive provides for several specific safeguards in order to guarantee the preservation of the fundamental rights of such third parties. Among those safeguards is the right of access to a lawyer throughout the confiscation proceedings, ( 11 ) which clearly entails the right of the third parties to be heard in the context of those proceedings, including the right to claim ownership of the property concerned by the confiscation. ( 12 )

( 1 ) 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 2014 L 127, p. 39).

( 2 ) Article 83(1) TFEU.

( 3 ) Article 8(8) of Directive 2014/42.

( 4 ) Article 5(2) of Directive 2014/42.

( 5 ) Article 5 of Directive 2014/42.

( 6 ) Recital 20 of Directive 2014/42.

( 7 ) Recital 21 of Directive 2014/42.

( 8 ) Article 5(1) of Directive 2014/42.

( 9 ) Article 6 of Directive 2014/42.

( 10 ) Article 8(1) of Directive 2014/42.

( 11 ) Article 8(7) of Directive 2014/42.

( 12 ) Article 8(9) of Directive 2014/42.