We are delighted to welcome this Guest Post from Dr Colin King. Dr King is Lecturer in Law at the University of Manchester. Prior to joining Manchester, he was Lecturer in Criminal Law and Evidence at the University of Leeds and Director of the University of Leeds Innocence Project. He completed his PhD – ‘The Confiscation of Criminal Assets: Tackling Organised Crime Through a “Middleground” System of Justice’ – at the University of Limerick, Ireland in 2010. He is co-editor (with Prof. Clive Walker) of ‘Dirty Assets: Emerging Issues in the Regulation of Criminal and Terrorist Assets’ to be published by Ashgate in February 2014.
There are significant obstacles to prosecuting those engaged in organised criminal activities, especially where criminal groups operate across legal jurisdictions. In response, law enforcement and policing agencies have turned their attention to the assets accrued via criminal means. The most famous example of this is Al Capone, who was jailed not for murder, racketeering, or extortion, but rather for tax evasion. Today the use of asset recovery against criminals, seizing the proceeds of organised crime, is seen as a vital law enforcement tool. This is unsurprising; indeed a 2011 UNODC Report – ‘Estimating Illicit Financial Flows Resulting From Drug Trafficking and Other Transnational Organized Crimes’ – estimates the total value of all criminal proceeds to be approximately 3.6% of global GDP, or US$2.1 trillion. Within the EU, a European Commission Memo from 2012 – ‘Confiscation and asset recovery: Better tools to fight crime’ – points to individual examples such as Italy (where organised crime revenues were an estimated €150 billion in 2011) and the UK (where organised crime revenues were estimated at stg£15 billion in 2006).
Anti-money laundering offences and post-conviction confiscation of assets have long been tools in the armoury of police and law enforcement agencies. However, these tools were widely regarded as inadequate to target assets of the upper echelons of organised crime groups. Increasingly, a non-conviction based approach to seizing criminal assets is gaining favour. While such an approach has been adopted in, eg, Ireland (Proceeds of Crime Act 1996) and Italy (Decreto-legge 306/1992) for over two decades, other Member States have only recently implemented such a regime, including Bulgaria (Law on Forfeiture of Illegally Acquired Assets, 2012) and Romania (Law 63/2012 enacted on April 17, 2012). The non-conviction based approach – as the name suggests – allows for assets to be seized even in the absence of any criminal conviction.
The Irish model of non-conviction based forfeiture is well known, so this post wont repeat its intricacies (for an overview, see King (2013); Campbell (2007)). Instead, I want to build on a recent article printed in the Irish Independent which also refers to a thematic paper by the Irish MEP Gay Mitchell – ‘Asset Confiscation as an Instrument to Deprive Criminal Organisations of the Proceeds of their Activities’, which support moves towards an EU model of non-conviction based asset forfeiture based on the Irish model.
Organised crime, and its illicit finances, are seen as an urgent challenge to EU security, and are identified as one of five strategic objectives in the EU Internal Security Strategy in Action. The European Commission has recommended ‘recasting the EU legal framework’ and that ‘more should be done to highlight confiscation as one of the most effective ways to fight organised crime’. The current EU framework on asset recovery is set out in, amongst others, the Council Decision of 2007 and Framework Decisions in 2006, 2005, 2003, and 2001. The Commission has also proposed further developments. Yet, despite the importance of seizing criminal assets being repeatedly stressed, and placed high on the EU agenda, there remains a dearth of knowledge on the operation and impact of the increased focus on criminal assets. According to a 2012 Impact Assessment carried out for the European Commission:
‘Statistics on confiscation and asset recovery activities are scarce … Reliable data sources on the number of ongoing freezing and confiscation procedures (especially those to be executed in other Member States), the turnover of criminal organisations, the costs of judicial procedures or the administrative costs related to asset management or data collection activities are even scarcer. Therefore, the economic impacts of the foreseen actions are often difficult to quantify.’
There is a need for greater information on the impact of non-conviction based asset forfeiture – not only in terms of monetary returns, but also in relation to monetary costs as well as costs to individual rights. Such an evaluation of ‘impact’ needs to take place before an EU model of non-conviction based forfeiture is introduced. (This report by Matrix Insight is useful in that regard).
Further, it is not as simple as to say ‘we want an EU model of non-conviction based forfeiture, so lets just implement one’. There are a number of obstacles to harmonisation, especially with such a contentious measure. An obvious difficulty to harmonisation is the differing levels of constitutional protections across Member States. For example, some Member States (eg Romania) have expressed concern about the constitutionality of non-conviction based asset forfeiture, while in other Member States (eg Bulgaria) constitutional courts are currently grappling with practical and procedural issues concerning the non-conviction based approach. This has hampered recognition of such orders from jurisdictions where a non-conviction based approach is embraced (eg Ireland, Italy, UK).
We can be certain that neither Mr Mitchell’s thematic paper, nor the Commission’s proposal for a non-conviction based approach to dirty assets, will be the last we hear on this.
Campbell, L (2007) Theorising Asset Forfeiture in Ireland. 71 Journal of Criminal Law 441.
King, C (2013) Following the Money Trail: “Civil” Forfeiture of “Criminal” Assets in Ireland. In P.C van Duyne et al (eds), Human Dimensions in Organised Crime, Money Laundering and Corruption (Wolf Legal, Nijmegen) pp.265-291.