Freezing and confiscating criminal money

The EU is taking action to better equip member states in their fight against organised crime and their illegal profits.

ministers of justice have agreed on the Council’s position on a draft directive on asset recovery and confiscation. It sets minimum rules on the tracing, identification, freezing, confiscation and management of criminal property.

In the fight against organised crime, it is crucial to cut criminals off from their illegal gains. The Council’s position on this draft directive is an important step in ensuring that crime does not pay off.

Gunnar Strömmer, Swedish minister for justice

The proposed rules will apply to a wide range of crimes, including the violation of sanctions once the directive on the definition of criminal offences and penalties for the violation of Union restrictive measures has been adopted. People profiteering from doing business with persons or companies on EU sanction lists will see their yields being seized the same way as traffickers in human beings or drug cartels.

The new law will also come with obligations for member states to ensure that the administrations dealing with tracing, freezing and managing criminal money have qualified staff and appropriate financial, technical and technological resources.

More powerful asset recovery offices

Once adopted, this new law will result in more competences of the asset recovery offices, to make sure that national administrations have the tools to go after criminal money. The new rules will facilitate cross-border cooperation of these offices. Information sharing between asset recovery offices in different member states will be enhanced.

In order to allow these asset recovery offices to perform their tasks, member state governments will have to make sure to give them access to relevant national databases and registers. In some cases, access should be immediate and direct.

Confiscation of unexplained wealth

Because crime by nature is a clandestine business it is not always possible to link property that is uncovered during a criminal investigation to a specific criminal activity. A novelty for many member states, a new rule on the confiscation of unexplained wealth will allow, under certain conditions, confiscation of assets based on involvement in organised crime activities. This form of confiscation will not require a criminal conviction. It can, however, only happen if a court is convinced that the property in question in derived from criminal conduct.

Asset management

Member states will be required to designate authorities (asset management offices) to manage the frozen or confiscated property, either through direct management or through providing support and expertise to other bodies responsible for the management of frozen and confiscated property.  Member states will also be required to enable the transfer or sale of frozen property even before a final confiscation under certain conditions, for instance when the property is perishable.

Background and next steps

According to Europol data, criminal organisations amass revenues which are estimated at least at €139 billion every year. Depriving criminals of these illicit profits is essential to disrupt the activities of criminal groups and to prevent their infiltration into the legal economy.

Despite the existence of a number of EU laws on the tracing and confiscation of illegal assets, the Council in 2020 called on the Commission to strengthen the legal framework. Also the European Parliament asked for stronger asset recovery rules. The present draft law was proposed on 25 May 2022.

On the basis of the general approach member states concluded today the Council will be able to start negotiations with the European Parliament in order to settle on a final legal text.