29 April 2014, by Diana Kovatcheva.
A newly adopted EU Directive makes it easier for countries to freeze and confiscate the proceeds of cross-border and organised crime. Although a positive step towards developing common EU standards, it is still limited in scope by dealing only with criminal – rather than illegal – asset forfeiture. Recent research by Transparency International identifies the need for increased safeguards, accountability and transparency in the forfeiture of illegal assets throughout Europe and will be monitoring how national institutions in three countries are functioning.
The EU Directive and Civil Forfeiture
The directive fails to address the confiscation and forfeiture of illegal assets, however, which takes place in the absence of a criminal conviction of the wrongdoer (civil forfeiture). As a result, it does not provide the adequate levels of safeguards, accountability or transparency over processes.
Civil forfeiture is an important tool for governments to react quickly and seize illegal assets independently of criminal justice proceedings. It eases the burden on governments, so that they may confiscate assets when there is insufficient evidence to support a criminal conviction, or in cases where the perpetrator is no longer alive, has flown the court’s jurisdiction or enjoys criminal immunity.
In the context of organised crime and corruption undermining governance and economic development, it is a means of channelling illegal funds back to the state in the public interest and for social purposes and acts as a preventative measure – reducing the incentives of crime.
Enhancing Integrity and Effectiveness of Illegal Asset Confiscation: Three European Approaches
Transparency International Bulgaria’s research project “Enhancing Integrity and Effectiveness of Illegal Asset Confiscation” was launched in 2013 to support the effectiveness, transparency and accountability of asset confiscation policies and practices in Europe. The project, jointly carried out with TI Italy and TI Romania covers their respective countries.
On 27 February 2014 the project launched reports on Bulgaria, Italy and Romania, presenting three models for the forfeiture and management of assets and providing recommendations as the basis for on-going monitoring of the confiscation authorities. The reports highlight weaknesses in legislation and in the management and administration of assets forfeited as well as levels of accountability and transparency.
The research supports the need for a harmonised approach led by the EU that would provide a clear policy on preventing the accumulation of illegal assets in Europe and identifies the need for increased safeguards.
The research and all relevant materials can be found at Illegal Asset Confiscation.
Defining freezing, confiscation and forfeiture of assets
- Freezing assets involves “prohibition of the transfer, destruction, conversion, disposal or movement of property or temporarily assuming custody or control of property”.
- Confiscation of assets involves“a final deprivation of property ordered by a court in relation to a criminal offence”.
- Forfeiture of assets is a judicial or administrative procedure that transfers the ownership of specified funds or other assets to the state.
About Diana Kovatcheva
Diana Kovatcheva is Doctor in International Public Law, former Director of Transparency International-Bulgaria and former Minister of Justice. Currently she is Lead researcher of the Illegal Assets Confiscation project.
- Press release: Council adopts directive on the freezing and confiscation of proceeds of crime.
Directive: Directive of the European Parliament and of the Council on the freezing and confiscation of instrumentalities and proceeds of crime in the European Union.
Definitions can be found in Article 2.