Asset recovery

Asset recovery

Most organised criminal activity is profit-driven. Criminal groups need resources to finance their activities, while criminals often move and spread their assets across different countries to avoid detection. Tracing, freezing confiscating, and actually recovering money and illegally acquired assets is therefore an important priority for national authorities in the Member States and represents a strategic priority in the European Union's fight against organised crime.

Eurojust facilitates the asset recovery process by providing legal and practical support to judicial authorities throughout the different stages of asset recovery, by helping practitioners to resolve issues and answer questions, and by facilitating effective cooperation and communication between the involved States.

Asset recovery life cycle

The four central stages of asset recovery are as follows:

  1. Asset tracing is the process by which investigators examine revenues generated by criminal activity and follow the trail of illegally acquired proceeds.

  2. Asset freezing involves the temporary retaining of property pending a final decision in a criminal case, thereby preventing assets from being destroyed, transformed, removed, transferred or disposed of before the case is closed.

  3. Asset confiscation stops criminals from accessing the property, which is permanently taken away.

  4. Asset disposal is the actual recovery of criminal assets, after which the assets either revert to the relevant state, are shared among the respective states or are returned to the victim.

On a general level, Eurojust facilitates the asset recovery process by providing legal and practical support to judicial authorities throughout the asset recovery lifecycle, by helping practitioners to resolve issues and answer questions, and by facilitating effective cooperation and communication between the involved States. Further to this, Eurojust provides support on complex investigations, including the setting up of joint investigation teams and the organisation of coordinated action days. The Agency also organises coordination meetings between the States involved, including EU and non-EU participants.

The specific forms of assistance Eurojust provides to national authorities during the respective stages of asset recovery is detailed in the adjacent tabs.
 

The Report on Eurojust’s Casework in Asset Recovery

In 2019, Eurojust published the Report on Eurojust’s Casework in Asset Recovery, to assist competent judicial authorities in the EU Member States in effectively recovering criminal assets during cross-border cases. The report is primarily based on the analysis of cases addressing asset recovery issues registered at Eurojust and is complemented by views expressed during dedicated discussions with the Eurojust National Desks. It provides an overview of the main legal and practical issues encountered by Eurojust in its casework in asset recovery. Further, it details the support Eurojust provides at the different stages of the asset recovery process, the main judicial cooperation instruments and tools used, and the identified best practices.

The report can be accessed here.

Asset tracing

Common issues encountered by national authorities during the asset tracing stage include correct identification of assets abroad and use of Asset Recovery Offices (AROs), as well as difficulties in persuading the requested authorities to conduct inquiries; for example, due to insufficient awareness of the existence of AROs and their role.

In other cases, there may be also issues regarding communication and cooperation between the Member States involved, including Financial Intelligence Units (FIUs). For instance, these can include confusion resulting from the simultaneous transmission of Letters of Request (LoRs) or European Investigation Orders (EIOs) for banking and financial information, or uncertainty as to the required channel for transmission for this information.

Further considerations include delays stemming from poor translations and other deficiencies in the LoRs or EIOs, as well as procedural issues, for example regarding the notification rights of bank account owners.

With regard to asset tracing, Eurojust provides support to judicial authorities as follows:

  • ensuring correct identification of relevant national authorities and correct contacts between Member States;
     
  • facilitating efficient information exchanges between judicial authorities without the need for an LoR or EIO;
     
  • enabling the transmission of financial and banking information, including by facilitating direct or indirect access to national registers or databases;
     
  • assisting in obtaining information on the state of play of the execution of LoRs or EIOs;
     
  • providing Contact Points in third States;
     
  • organising coordination meetings to enable the execution of LoRs or EIOs involving several countries;
     
  • preparing overviews of the links between the suspects under investigation;
     
  • supporting the setting up of joint investigation teams (JITs), including for the purpose of a financial investigation;
     
  • raising awareness of the role of the AROs among practitioners; and
     
  • providing advice to national authorities and facilitating solutions to practical problems.

Asset freezing

Issues arising during the asset freezing stage of asset recovery include uncertainties surrounding the requirements for issuing a freezing order, for example as a result of differences in national implementation procedures and/or legislation.

Questions may also arise from the identification of the competent national authority, e.g. when assets are situated in different locations in the executing/requested State, as well as the choice of legal instruments used in freezing assets.

In other cases, practitioners may encounter issues linked to grounds for refusing the execution of a freezing order or an LoR seeking the freezing of assets, as well as those stemming from challenges and legal remedies, and from poor communication of the execution of a freezing order or an LoR.

Issues may also pertain to asset management; for example, in relation to costs, the value of assets, the possibility of early sale, the manner in which the assessment of the value was conducted, or the absence of judicial administrators of companies subject to a freezing order.

With regard to asset freezing, the practical and legal support provided by Eurojust may include:

  • offering advice and clarification regarding practical, legal and formal requirements, and serving as a channel for transmission of freezing orders, LoRs, and other related materials;
     
  • supporting the execution stage of freezing orders or LoRs;
     
  • enabling the speedy clarification of legal requirements for extending the duration of the freezing order, or maintaining the validity of a given seizure;
     
  • hosting coordination meetings at Eurojust’s premises in preparation for coordinated action days, as well as organising coordination centres; and
     
  • advising on possible conflicts between domestic freezing orders and the requested freezing measure, and on possible ne bis in idem issues.

Asset confiscation

Issues relating specifically to the confiscation of assets may include requirements for issuing a confiscation order or an LoR seeking confiscation measures, or to the consideration of their execution. Equally, issues may stem from requests for additional documentation or information, or involve issues of third-party ownership of property awaiting confiscation.

Cost-related issues also emerge during the confiscation stage; for example, when the requested State requires the translation of both the first instance and the high court decisions in the requesting State before considering execution of the confiscation measure.

Other common issues include delays by executing authorities in confirming the execution of confiscation measures, or those resulting from misunderstandings between requesting and requested authorities.

With regard to confiscating assets, Eurojust’s support includes:

  • providing various advice and clarification in relation to the practical, legal and formal requirements;
     
  • helping requesting States with drafting the relevant documents (certificates or LoRs) seeking confiscation;
     
  • assisting in the identification of the competent authority in the executing/requested State and in the transmission of the confiscation order;
     
  • providing ad hoc support in very urgent cases or in cases in which other channels have proved insufficient;
     
  • facilitating the translation of the executing State’s relevant provisions of the legislation on judicial cooperation in criminal matters;
     
  • acting as a central communication channel between involved countries, including the use of Eurojust’s Liaison Prosecutors as contact points during communications with third States;
     
  • advising on the choice of legal instrument, including the legal requirements concerning the translation of the confiscation order;
     
  • facilitating the exchange of information regarding recognition of confiscation orders or execution of the LoR;
     
  • mediating on discussions over translation costs, and clarifying the legal and practical possibilities in the countries involved with a view to reaching an agreement; and
     
  • facilitating the transmission of information on time limits, with regard to appellate court decisions, and recognising and ordering the execution of confiscation orders.

Asset disposal

Issues arising during the asset disposal stage may relate to the sale of the confiscated assets, for example when the convicted person challenges the manner in which the executing authority chose to assess the estimated value of the property.

Questions may also relate to asset sharing, involving, for instance, the requested State’s regime on asset sharing and the temporal scope of the application of the changes in the legislation of the executing State, the issue of the formalisation of the asset-sharing agreement, and delays in reaching the actual asset-sharing agreement.

Cases may also raise issues concerning the restitution of confiscated assets to victims. For example, Member State authorities may be required to establish possible legal bases for the confiscation and possible transfer of assets to a third State in question, and the issue of ‘victims of crime’.

Eurojust may support judicial practitioners during the asset disposal stage as follows:

  • advising on the legal possibilities available in the executing State for assessing the value of the confiscated assets;

  • facilitating the clarification of the legal requirements of the requested State to allow the return of the assets;

  • issuing advice on the legal basis, procedural steps and appropriate channel of communication for potential asset-sharing agreements between involved countries;

  • advising requested authorities on how to draft the required formal communication to the competent requesting authority to initiate the asset-sharing agreement, and liaising with the authority in the requested State competent to enable the recovery of assets; and

  • organising coordination meetings to enable the efficient exchange of information and enhance trust and mutual understanding.