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Confiscation and recovery of illicit assets: a new Directive will help combat organised crime

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The European Economic and Social Committee (EESC) welcomed the Commission’s proposal for a Directive on asset recovery and confiscation as an important step towards combatting money laundering and terrorist financing in the EU. Despite a general improvement in some of the Member States, the percentage of criminal assets that are frozen or confiscated remains extremely low across the EU.

The new Directive adds a significant list of crimes to those contained in the Confiscation Directive from 2014, including organ trafficking, kidnapping, environmental crimes, and trafficking in stolen vehicles, to name but a few.

It also improves cross border cooperation between all authorities involved in asset recovery, encourages EU countries to develop national strategies and requires them to set up at least one Asset Recovery Office, a specialised body for tracing and identifying proceeds of crime and other crime-related property, the EESC said in its Opinion on asset recovery and confiscation, adopted at the plenary session in December.

We think the Commission’s proposal is very good as it responds to the need to broaden the scope of the confiscation mechanisms. It also establishes cross-border cooperation mechanisms to increase the rate of asset recovery. At the moment, the rates are very low, with only 2% of criminal assets frozen and only 1% confiscated, said the rapporteur of the opinion Ionuţ Sibian.

However, the EESC noted that the Directive falls short of explicitly including migrant smuggling and illicit tobacco trade within its scope, despite the significant annual revenues of these criminal markets, worth an estimated EUR 289.4 million and EUR 8 309.3 million respectively, and urged the Commission to add them to the list.

The EESC also asked the Commission to be more ambitious regarding the social reuse of confiscated assets and to set a minimum percentage for social reuse for Member States.

It is very important that affected communities get restorative damages directly and benefit from the returns from these damages. It is one area in which we expected developments, but there is a stagnation. Civil society has to be involved in managing and disposing of confiscated assets, Mr Sibian said.

The EESC also requested that the Commission should be more precise in setting out victims’ rights to compensation. When ranking creditors, victims should be given priority.

In the EESC’s view, separate legislation is needed to cover violations of EU restrictive measures.

Asset Recovery Offices, which should be established in every Member State, are very important for ensuring the smooth implementation of the Directive. Their roles should be defined in detail and they should be allocated sufficient financial, human and technical resources to be able to efficiently trace illicit assets.

Furthermore, national authorities should regularly report to the Commission on their available resources to ensure a fair balance between the various Asset Recovery Offices and a minimum standard for their functioning, the EESC maintained.

At the same time, Asset Management Offices will be specialised bodies set up or designated in each Member State to ensure the efficient management of frozen and confiscated property, and to cooperate with other competent authorities responsible for tracing, identifying, freezing, confiscating and managing either at national level or in cross-border cases. Both Asset Recovery and Management Offices should be given relevant competences to be able to carry out asset disposal or return in cross-border proceedings, based on asset-sharing agreements signed by Member States.

In the EESC’s view, the Directive should include more concrete tools for assisting third countries’ officials and to actively encourage Member States to develop cooperation with these countries in order to maximise the asset recovery mechanisms. Also, victims of criminal offences in third countries must also be given the full right to compensation.

The EESC also suggested that the proposed Directive should explicitly state that national authorities and the Commission are obliged to regularly publish comprehensive statistics on the measures taken under the Directive and ensure public access to information.

Source: EESC

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