Learning from failure: cross-border confiscation in the EU

Abstract

Purpose The purpose of this paper is to critically examine the strengths and weaknesses of a new European Union (EU) initiative attempting an interesting paradigm shift in the field of cross-border asset freezing and confiscation. The entry into force of the Lisbon Treaty and lessons learned from the manifest failure of past EU initiatives (Framework Decisions 2003/577/JHA and 2006/783/JHA) have allowed for such a paradigm shift for the strengthening of mutual recognition of freezing and confiscation orders in the EU. Design/methodology/approach This paper draws on reports, legal scholarship and other open source data to examine a legislative innovation for the mutual recognition of freezing and confiscation orders in the EU. Findings The EU legislative initiative that will be examined is innovative in nature and goes beyond international norms on cross-border asset freezing and confiscation. The new initiative needs to be integrated into the broader EU framework that targets criminal proceeds, and at the same time, to be anchored to respect for human rights. Originality/value This study examines the strengths and weaknesses of an important new EU initiative, its compatibility with human rights standards and its relationship to international standards of cross-border asset freezing and confiscation.

Asset recovery in the European Union: implementing a “no safe haven” strategy for illicit proceeds

“…A recent EU initiative, Regulation 2018/1805 [8], represents an interesting paradigm shift in cross-border asset freezing and confiscation. Having learned from previous failed initiatives (Pavlidis, 2019), the EU has decided to implement the mutual recognition of freezing and confiscation orders. This constitutes a shift from the mutual legal assistance approach under international law to the "direct enforcement" model, which is simpler and faster (UNODC, 2016).…”

“…We can mention the example of the Council of Europe conventions, in particular Convention No 141 and Convention No 198, the implementation of which suffered from delays and broad grounds for refusal. The EU regulation covers a variety of freezing and confiscation orders, limits the grounds for refusing to recognize and to execute judgements, introduces strict deadlines for implementation and addresses the protection of victim and bona fide third-party rights (Pavlidis, 2019).…”

Financial action task force and the fight against money laundering and the financing of terrorism

“…198, as demonstrated by Article 13. The FATF Recommendations have also influenced the work of the European Union (Spreutels and Scohier, 1998; Gilmore, 2005), from the drafting of the First Money Laundering Directive 91/308 to the recent Fifth Money Laundering Directive 2018/843 and numerous other instruments, such as Directive 2014/42 on confiscation, Regulation 2018/1805 on mutual recognition of confiscation orders and so on (Pavlidis, 2019; House of Lords, 2009; Mitsilegas and Gilmore, 2007). At the UN level, there are several examples of the instruments explicitly:…”

Financial information in the context of anti-money laundering

“…This is a major step forward for enhancing asset recovery at the EU level, since it would create a network of AROs with access to a network of centralised bank account registries, thus rendering the EU banking system a “no-safe haven” for assets subject to criminal confiscation. Indeed, bank accounts belonging to criminals and organised crime networks, including terrorist groups, will be located more easily across the EU under Directive 2019/1153 and, subsequently, funds will be confiscated more easily under the new Regulation (EU) 2018/1805 on the mutual recognition of confiscation orders (Pavlidis, 2019; Maugeri, 2018)[4].…”