New rules to freeze and confiscate the proceeds of crime

Only 2.2 % of the proceeds of crime are currently confiscated

Make seizing criminal assets across the EU faster and more efficient

Unexplained wealth linked to criminal organisations can be confiscated

The new legislation on seizing criminal assets would ensure fast and efficient freezing and confiscation everywhere in the EU and improve the rights of victims in these processes.

The European Parliament has voted to approve the result from inter-institutional negotiations on new legislation to boost the freezing and confiscation of criminal assets. The agreement was adopted with 598 votes in favour, 19 against, and 7 abstentions.

Compared to existing legislation, the new directive would cover a wider range of crimes committed within the framework of a criminal organisation, such as trafficking in human beings, drugs or firearms, sexual exploitation of children, and money-laundering.

The law would also crack down on cases where confiscation is evaded with the help of a third person, and allow confiscation in certain cases where conviction is not possible, for example in cases of illness or death of a suspect. To prevent assets from degrading, member states would have to set up dedicated offices to manage confiscated assets, and tools to manage information related to them, for example central registries.

Plugging information gaps to track criminal assets

To make cross-border investigations more efficient, the law would strengthen the powers of asset recovery offices (AROs) set up by member states, ensuring that they get swift access to necessary information including real estate, citizenship, and commercial registries, including fiscal and securities data. During negotiations, MEPs managed to also include beneficial ownership registries and centralised bank account registries in the scope of ARO direct access.

New forms of confiscation

To new law allows for immediate freezing measures to ensure that suspected criminal assets do not go missing during investigations. For their confiscation, the law introduces two new forms: non-conviction based confiscation, and confiscation of unexplained wealth, when it is uncovered during a criminal investigation and a court believes it is connected to criminal activity.

Securing the rights of victims

The law also includes extensive provisions to ensure that the rights of victims are fully taken into account within the asset tracing, freezing and confiscation proceedings, prioritizing restitution to victims and ensuring their compensation.

Better tracing to support the effective implementation of EU sanctions

In future, AROs can contribute to the enforcement of EU sanctions by assisting national competent authorities in the tracing and identification of property belonging to people and entities subject to EU sanctions. Assets confiscated in this way can also be used to support third countries impacted by a war of aggression or another situation that prompted the EU to adopt sanctions.

In parallel, MEPs have also agreed new rules to criminalise the violations of EU sanctions consistently.

Quote

After the vote, rapporteur Loránt Vincze (EPP, Romania) said: “An effective confiscation framework of assets deriving from criminal activity serves as a proactive and impactful strategy in the fight against organized crime, targeting its core motivation—financial gain. With today’s vote on the Directive on Asset Recovery and Confiscation, we managed to take a great step in this regard: the law strengthens the capabilities of competent authorities to identify, freeze, confiscate and manage assets through improved access to relevant databases, better and faster information-sharing among competent authorities, and the introduction of novel, more effective procedures to confiscate criminal assets.“

Background

In 2010–2014, only 2.2% of the proceeds of crime were frozen in the EU, and only 1.1% of these proceeds were confiscated. In December 2021, the European Parliament called for the EU’s regime on asset recovery and confiscation to be harmonised, and in the EU Strategy to tackle Organised Crime (2021-2025), the Commission proposed strengthening these rules.