Joined Cases C‑767/22, C‑49/23 and C‑161/23

1Dream and Others

(Request for a preliminary ruling from the Latvijas Republikas Satversmes tiesa)

Judgment of the Court (First Chamber) of 4 October 2024

(Reference for a preliminary ruling – Judicial cooperation in criminal matters – Confiscation of crime-related proceeds, instrumentalities and property – Framework Decision 2005/212/JHA – Directive 2014/42/EU – Scope – National criminal proceedings capable of leading to the confiscation of illegally obtained assets – No finding of a criminal offence – Confiscation without conviction – Reasons other than illness or absconding)

1. Questions referred for a preliminary ruling – Jurisdiction of the Court – Identification of the relevant aspects of EU law – Reformulation of the questions

   (Art. 267 TFEU)

   (see paragraphs 69, 71)

2. Judicial cooperation in criminal matters – Freezing and confiscation of instrumentalities and proceeds of crime in the European Union – Directive 2014/42 – Scope – National legislation providing for the possibility, in the course of criminal proceedings, of initiating proceedings for the confiscation of illegally obtained assets in the absence of a conviction and where there is no reason relating to the illness or absconding of the accused person – Precluded – Whether a criminal offence has actually been committed must be capable of being assessed by the court ordering confiscation

   (European Parliament and Council Directive 2014/42, recitals 5, 15 and 22 and Arts 2, points 1 and 3, 4(1) and (2) and 14(1); Council Framework Decision 2005/212; European Parliament and Council Regulation 2018/1805, recital 13)

   (see paragraphs 72-89, operative part 2)

Résumé

Hearing three separate requests for a preliminary ruling from the Latvijas Republikas Satversmes tiesa (Constitutional Court, Latvia), the Court of Justice rules on the scope of Framework Decision 2005/212 ( 1 ) and Directive 2014/42 ( 2 ) concerning the freezing and confiscation of crime-related proceeds, instrumentalities and property in the European Union.

The requests have been made in three cases involving seizures of funds, financial instruments and immovable property ordered at the investigation stage of various sets of criminal proceedings initiated in Latvia for large-scale laundering of the proceeds of crime. In the course of those criminal proceedings, proceedings relating to illegally obtained assets were brought that targeted the financial assets and immovable property at issue and some of those financial assets and immovable property were confiscated and transferred to the State budget.

In the context of the proceedings relating to illegally obtained assets, the persons concerned brought actions before the referring court, claiming, inter alia, that a number of provisions of the Kriminālprocesa likums (Law on criminal procedure) were inconsistent with the right to a fair trial ( 3 ) and the presumption of innocence. ( 4 ) That law provides, in particular, for the possibility, at the preliminary stage of criminal proceedings to determine whether a person has committed a criminal offence, of initiating a separate set of proceedings capable of leading to the swift confiscation of illegally obtained assets, where bringing the criminal case before the courts having jurisdiction in the foreseeable future is, for objective reasons, impossible or may give rise to substantial and unjustified costs.

Since a finding that assets were obtained illegally is made by the court before the commission of a criminal offence has been established or a conviction handed down, the referring court decided to stay the proceedings in those cases and to ask the Court, inter alia, whether national legislation such as that at issue in the main proceedings falls within the scope of Directive 2014/42 ( 5 ) and Framework Decision 2005/212. ( 6 )

Findings of the Court

The Court holds that neither Framework Decision 2005/212 nor Directive 2014/42 can be regarded as governing proceedings which, although provided for by national rules of criminal procedure, are intended exclusively to determine whether assets have been obtained illegally on the basis of case file materials that were taken from proceedings concerning the finding of one or more criminal offences referred to in those acts, without the court hearing the confiscation proceedings having the power, in the context of those proceedings, to find that such a criminal offence has been committed and without that finding being made in the course of the proceedings concerning the finding of one or more criminal offences.

First, although the fact that confiscation proceedings are governed by national rules of criminal procedure may point to the existence of a necessary link between the confiscation proceedings and the finding of a criminal offence, it is not in itself decisive for considering that such confiscation proceedings fall within the scope of Framework Decision 2005/212 or Directive 2014/42.

Article 4(2) of that directive does not cast doubt on the exclusion from the scope of Framework Decision 2005/212 and Directive 2014/42 of confiscation proceedings intended exclusively to determine whether assets have been obtained illegally, without the court hearing those proceedings having the power to find that a criminal offence has been committed and in the absence of a prior finding of such an offence.

The Court makes clear that that provision covers the situation where such a conviction is not possible due to the non-appearance of the suspected or accused person in certain circumstances, at least in the cases of illness or absconding of that suspected or accused person, but where criminal proceedings have been initiated regarding a criminal offence which is liable to give rise, directly or indirectly, to economic benefit, and such proceedings could have led to a criminal conviction if the suspected or accused person had been able to stand trial.

It follows that the confiscation provided for in Article 4(2) of Directive 2014/42, while referring to ‘instrumentalities’ and ‘proceeds’ within the meaning of Article 2, points 1 and 3, of that directive, requires that it be possible, irrespective even of any conviction of the perpetrator of the criminal offence, for the question whether that criminal offence has actually been committed to be assessed by the court ordering confiscation. Accordingly, Article 4(2) of Directive 2014/42 does not cover proceedings, such as those at issue in the main proceedings, enabling confiscation to be ordered swiftly but which are not intended to determine whether a criminal offence has been committed.

The Court concludes that Framework Decision 2005/212 and Directive 2014/42 must be interpreted as meaning that the scope of those acts does not cover national legislation which provides for the possibility, in the course of criminal proceedings to determine whether a person has committed a criminal offence, of initiating proceedings for the confiscation of illegally obtained assets, on the basis of materials contained in the file in the criminal proceedings, where those confiscation proceedings do not concern the finding of such a criminal offence and even though there is no reason relating to the illness or absconding of that person which would prevent him or her from standing trial.

( 1 ) Council Framework Decision 2005/212/JHA of 24 February 2005 on Confiscation of Crime-Related Proceeds, Instrumentalities and Property (OJ 2005 L 68, p. 49).

( 2 ) 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).

( 3 ) In Cases C‑767/22, C‑49/23 and C‑161/23.

( 4 ) In Case C‑161/23.

( 5 ) In particular, Article 4: ‘1. Member States shall take the necessary measures to enable the confiscation, either in whole or in part, of instrumentalities and proceeds or property the value of which corresponds to such instrumentalities or proceeds, subject to a final conviction for a criminal offence, which may also result from proceedings in absentia.

2. Where confiscation on the basis of paragraph 1 is not possible, at least where such impossibility is the result of illness or absconding of the suspected or accused person, Member States shall take the necessary measures to enable the confiscation of instrumentalities and proceeds in cases where criminal proceedings have been initiated regarding a criminal offence which is liable to give rise, directly or indirectly, to economic benefit, and such proceedings could have led to a criminal conviction if the suspected or accused person had been able to stand trial.’

( 6 ) Article 2(1): ‘Each Member State shall take the necessary measures to enable it to confiscate, either wholly or in part, instrumentalities and proceeds from criminal offences punishable by deprivation of liberty for more than one year, or property the value of which corresponds to such proceeds.’