Annexes to COM(2020)217 - Asset recovery and confiscation: Ensuring that crime does not pay - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2020)217 - Asset recovery and confiscation: Ensuring that crime does not pay. |
|---|---|
| document | COM(2020)217  |
| date | June 2, 2020 |
In the context of the fight against money laundering and terrorism financing, the Financial Action Task Force (FATF) standards imply similar measures and require countries to put in place robust freezing and confiscation measures and to be able to cooperate to recover assets. The FATF recognises that “reducing the rewards of crime affects the balance of risk and reward, and the prospect of losing profits may deter some from crime. It may also allow the victim of the crime to be partially or fully compensated even when the proceeds are moved around the world. This is particularly relevant in the case of asset recovery” 30 .
The mutual assistance procedures under the United Nations and Council of Europe Conventions are formalistic and may take a long time to prepare. It is therefore essential to conduct informal consultations between the authorities of the countries concerned before such procedures are launched. This will make it possible to correctly prepare all relevant information according to the requirements of the country receiving the request and avoid having to restart the procedure because of a procedural error. Significant support for these procedures is provided by networks of asset recovery practitioners such as the Camden Asset Recovery Inter-Agency Network (CARIN). These informal networks have law enforcement and judicial contact points in each member country, which helps the informal exchange of information on both: (i) the identification and tracing of assets; and (ii) the preparation of mutual legal assistance requests. Together with the associated regional Asset Recovery Inter-Agency Networks (ARINs) 31 , the CARIN network covers over 150 countries and jurisdictions.
6.CONCLUSION AND THE WAY FORWARD
In recent years, the EU has made considerable efforts to assist financial investigations and harmonise the legislation on confiscation in the Member States. The adoption of the Directive has led to substantive progress in the Member States’ asset recovery frameworks. 24 out of 26 Member States, bound by the Directive, adopted new legislation since 2014 in order to ensure that their legislation is up to the high standards, required by the Directive. The overall level of implementation of the Directive across the EU can be considered as satisfactory.
The general improvement in Member States’ legal frameworks on asset recovery is also reflected in the positive rating that they received in the evaluations they underwent according to the standards of the FATF. So far, 16 Member States that had to transpose the Directive have been evaluated and they were all found to be fully or largely compliant with the standard relating to freezing and confiscation 32 . However, overall results in terms of assets confiscated are not satisfactory and the confiscation rates in the EU remain very low.
The analysis conducted in this report demonstrates that there is room for further progress in the area of asset recovery. This could be achieved by, for example, (i) extending the scope of criminal offences, to which the Directive is applicable; (ii) introducing more effective rules on non-conviction based confiscation; (iii) being more precise as regards the management of frozen assets; (iv) introducing provisions on the disposal of assets, including the social reuse of confiscated assets; (v) laying down rules on the compensation of victims of crime and (vi) reinforcing the capacity of the Asset Recovery Offices to trace and identify illicit assets.
The Commission will therefore assess the potential for greater harmonisation of the EU asset recovery regimes. This assessment will cover both Directive 2014/42/EU and Council Decision 2007/845/JHA, because the ability to freeze and confiscate illegal assets depends directly on the capacity to trace and identify them.
The possible revision of the Directive and the Council Decision would result in a broad modernisation of the EU legislation on asset recovery and further strengthen the competent authorities’ capacity to ensure that crime does not pay.
(1) https://www.europol.europa.eu/activities-services/main-reports/european-union-serious-and-organised-crime-threat-assessment-2017
(2) Transcrime, From illegal markets to legitimate businesses: the portfolio of organised crime in Europe, 2015, available at: http://www.transcrime.it/wp-content/uploads/2015/03/OCP-Full-Report.pdf
(3) Europol, Does crime still pay? Criminal Asset Recovery in the EU – Survey of statistical information 2010-2014, 2016, available at: https://www.europol.europa.eu/publications-documents/does-crime-still-pay
(4) Europol, From suspicion to action – Converting financial intelligence into greater operational impact, 2017, available at: https://www.europol.europa.eu/publications-documents/suspicion-to-action-converting-financial-intelligence-greater-operational-impact
(5) Regulation (EU) 2018/1805 of the European Parliament and of the Council of 14 November 2018 on the mutual recognition of freezing orders and confiscation orders, OJ L 303, 28.11.2018, pp.1-38.
(6) It will apply as from 19 December 2020.
(7) Council Decision 2007/845/JHA of 6 December 2007 concerning cooperation between Asset Recovery Offices of the Member States in the field of tracing and identification of proceeds from, or other property related to, crime, OJ L 332, 18.12.2007, pp. 103–105.
(8) Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU, OJ L 156, 19.6.2018, pp. 43–74
(9) Directive (EU) 2019/1153 of the European Parliament and of the Council of 20 June 2019 laying down rules facilitating the use of financial and other information for the prevention, detection, investigation or prosecution of certain criminal offences, and repealing Council Decision 2000/642/JHA, OJ L 186, 11.7.2019, pp. 122–137
(10) SWD(2019) 1050 final.
(11) Council doc. 7329/1/14 REV 1 ADD 1.
(12) For Bulgaria, Luxembourg and Romania, the conformity check has not been fully conducted yet and any elements contained in this implementation report concern the legislation already notified by these Member States and are without prejudice to future legislative developments.
(13) NL and SI stated that their existing rules on freezing and confiscation were in full compliance with the Directive and that no amendments were needed.
(14) Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law, OJ L 198, 28.7.2017, pp. 29–41.
(15) The scope of criminal offences, to which the Directive applies, is provided in Annex of this report.
(16) A degree of caution is necessary when comparing the formulations of the various national standards as there are different interpretations domestically.
(17) They content of Article 5(2) is provided in Annex of this report.
(18) It is important to highlight that recital 13 of Directive 2011/36/EU on preventing and combating trafficking in human beings and protecting its victims encourages the Member States to use the seized and confiscated instrumentalities and proceeds from the offences referred to in it to support victims’ assistance and protection, including compensation of victims. Further details are included in the Second progress report of the European Commission (COM(2018) 777 final) and (SWD(2018) 473 final).
(19) Member States are currently only required to submit such data to the Commission if it is available at a central level. Article 11(3) of the Directive encourages them to collect it centrally.
(20) Council doc. 7329/1/14 REV 1 ADD 1.
(21) Two meetings in 2016, on 16 September and 17 November, and one meeting in 2019 on 9 September.
(22) SWD(2019) 1050 final.
(23) In rem proceedings (action against the assets not the person) are initiated to confiscate assets obtained through unlawful conduct.
(24) Unexplained wealth proceedings compare the actual property a person has acquired against income declared by that person in order to identify any disparity between the two. Establishing a direct or indirect link to a predicate offence is not necessary.
(25) MORE - Modelling and mapping the risk of Serious and Organised Crime Infiltration in legitimate businesses across European territories and sectors, available at https://www.swp-berlin.org/en/projects/completed-projects-compl/more/
(26) Commission Staff Working Document ‘Comprehensive Assessment of EU Security Policy’, SWD(2017) 278 final, available at: https://eur-lex.europa.eu/resource.html?uri=cellar:b43f3517-720a-11e7-b2f2-01aa75ed71a1.0001.02/DOC_1&format=PDF
(27) https://www.unodc.org/unodc/en/organized-crime/intro/UNTOC.html
(28) https://www.unodc.org/unodc/en/corruption/ratification-status.html
(29) Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism, CETS No. 198.
(30) Financial Action Task Force, Best Practices Paper – Best practices on confiscation (recommendations 4 and 38) and a framework for ongoing work on asset recovery, October 2012, available at: https://www.fatf-gafi.org/media/fatf/documents/reports/Best%20Practices%20on%20%20Confiscation%20and%20a%20Framework%20for%20Ongoing%20Work%20on%20Asset%20Recovery.pdf
(31) The regional ARINs include ARINSA (Southern Africa), RRAG (Latin America), ARIN-AP (Asia Pacific), ARIN-EA (Eastern Africa), ARIN-WA (Western Africa) and ARIN-CARIB (Caribbean).
(32) For more information on the FATF/Moneyval mutual evaluations, visit http://www.fatf-gafi.org/