CONFISCATION OF ASSETS AND THE PROCEEDS
FROM CRIME
(21442)
9903/00
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Draft Framework Decision on the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds from crime.
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| Legal base: |
Article 34(2)(b) EU; consultation; unanimity
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| Forwarded to the Council:
| 23 June 2000 |
| Deposited in Parliament:
| 21 July 2000 |
| Department: |
Home Office |
| Basis of consideration:
| EM of 24 July 2000 |
| Previous Committee Report:
| None |
| To be discussed in Council:
| October 2000 |
| Committee's assessment:
| Politically important |
| Committee's decision:
| Not cleared; further information requested
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Background
8.1 This proposal involves converting the
Joint Action of 3 December 1998 on the same subject into a Framework
Decision to strengthen Member States' commitment to providing
each other with assistance in the identification, tracing, freezing,
seizing and confiscation of "instrumentalities" (ie
the assets used to commit offences, such as vehicles) and the
proceeds from crime. The UK complies fully with all measures proposed
by the Joint Action. (The change in our Standing Orders which
allowed us to scrutinise Third Pillar documents did not take place
in time for us to consider this Joint Action before its adoption.)
8.2 The proposal complements a number of
others currently under negotiation which arise from the Tampere
conclusions about mutual recognition of judicial decisions.
The document and the Government's view
8.3 The Minister of State at the Home Office
(Mrs Barbara Roche) takes us through the proposal, explaining
any changes from the Joint Action and giving the Government's
view. She says:
Article 1
"This article deals with Member States' implementation
of the 1990 Convention.[17]
It imposes an obligation on Member States to ensure that no reservations
are maintained under Articles 2 (confiscation measures) and 6
(money laundering offences) of the Convention. The text is virtually
unchanged from the previous Joint Action and defines a broad range
of crimes to be the subject of asset confiscation and money laundering
legislation.
"The only change from the original text provided
for the draft Framework Decision would remove Member States' abilities
to make reservations with regard to the confiscation of proceeds
from offences punishable under legislation on taxation. Tax evasion
is already considered a serious crime in the UK and our confiscation
régime applies fully to it.
Article 2
"This article specifies that laundering offences
defined under the 1990 Convention and Framework Decision are to
be punishable by a penalty of not less than 5 years.
"The specific offences referred to — of
the conversion or transfer of property and concealment or disguise
of the true nature or ownership, knowing that such property is
the proceeds of crime — are punishable by a maximum of 14
years under UK legislation contained within the 1994 Drug Trafficking
Offences Act and 1988 Criminal Justice Act as amended.
Article 3
"This article requires that Member States' law
should allow for the confiscation not only of the proceeds of
crime but also of property of equivalent value. This provision
was included in the original Joint Action and is a principle which
UK confiscation legislation fully allows for. There is one minor
revision to the original article, whereby the exclusion clause
relating to property of a value less than 4000 euro replaces what
was previously referred to as 'the proceeds of crime in minor
cases'. Initial consideration suggests that this will not affect
application of this article in practice.
Article 4
"This article contains two provisions. Firstly
it imposes a general obligation on Member States to ensure that
their legislation and procedures make it easy to quickly trace
and identify criminal proceeds in response to applications from
other Member States.
"Secondly the article develops Article 1.3 of
the 1998 Joint Action which referred to making restrictive use
of the optional grounds for refusal of a request for assistance
under Article 18(2) and (3) of the 1990 Convention. These optional
grounds for refusal and a further one at 18(4) have now been removed,
and would have the effect of not allowing the UK to refuse
a request on the basis that confiscation is not provided for in
respect of a certain offence in the UK [the Minister's emphasis].
This abrogation of the principle of dual criminality is a step
which the UK considers essential if mutual recognition is to work
effectively. There will therefore be a clear connection between
negotiations on this article and those taking place on other initiatives
in particular relating to mutual recognition generally and with
respect to the freezing of assets in particular.
Article 5
"This article reflects a provision included
in the original Joint Action with no obvious change of effect.
Article 6
"This updates the Joint Action provision relating
to the freezing of assets — upon receipt of a request from
another Member State — to prevent assets being dissipated
and therefore not available for potential future confiscation.
The revised version removes an exception clause that such action
would not be mandatory where contrary to the national law.
"At present many of the requests from other
Member States relating to asset freezing are made very early in
proceedings, typically at the investigative stage; this is consistent
with many European States' domestic powers. By contrast, UK legislation
requires that proceedings have been instituted against an individual
or are imminent before we can take such an action.
"Measures agreed at the Special European Council
Summit in Tampere in October 1999, commit Member States to work
towards the implementation of the principle of mutual recognition
and, as already mentioned, this principle is first being applied
to pre-trial orders to freeze assets. If agreement can be reached
in this context, this will meet the objectives of the proposed
article.
Articles 7-9
"These relate to the implementation of the measure.
Member States must complete any necessary steps to enable them
to conform to this Framework Decision by 31 December 2001."
8.4 The Minister undertakes to send us a
copy of the Presidency's explanatory note (referred to in the
document, but not attached to it) once it becomes available.
Conclusion
8.5 This is one of a number of current
proposals in the area of mutual recognition of decisions. That
concerned with pre-trial orders to freeze assets appears to be
in the lead (although it has not yet been deposited in Parliament),
and, as the Minister makes clear, agreement on its provisions
will have implications for this draft Framework Decision. In these
circumstances, although we understand that there is a possibility
that this document may be on the JHA Council agenda for 17 October,
we do not feel able to complete its scrutiny before we have seen
the other measure, and learned more about the general approach
being taken, by the Presidency and by the UK, to mutual recognition
issues.
8.6 In this context, we ask the Minister
to clarify her statement: "abrogation of the principle
of dual criminality is a step which the UK considers essential
if mutual recognition is to work effectively." Does she have
in mind both the situation where a crime in one Member
State is not recognised as a crime in another and the situation
where an action is criminalised in two Member States, but the
punishment for it differs? Is she stating that the UK is prepared
to abrogate this principle in all cases both as regards the crime
itself and as regards the punishment or will she scrutinise each
measure on its own merits? How does she expect the other Member
States to proceed?
8.7 We also note that, whereas UK legislation
requires criminal proceedings to be at least imminent before assets
can be frozen, the Government is apparently ready to concede that,
in response to requests from other Member States, assets may be
frozen at the investigative stage. If there are good reasons for
the existing UK restrictions on seizure of assets, we would expect
the Government to seek to maintain them even in the case of requests
from other Member States. If, on the other hand, relaxation of
these restrictions can be justified in the case of those requests,
why does the Government seek to maintain them in domestic cases?
Is this an example of the UK making concessions in the cause of
mutual recognition?
8.8 A clear response to these questions
will help us considerably in our scrutiny of this and related
proposals. We will also wish to see the Presidency's explanatory
note before we consider the draft Framework Decision again.
8.9 Finally, we do not find it very satisfactory
that the measure relies heavily on a Council of Europe Convention
which is not readily to hand. We ask the Minister to propose that
a copy of the Convention be annexed to the draft Framework Decision
text, in the interests of transparency. If this is not possible,
we ask her to supply us with a copy when she responds to our questions.
8.10 Meanwhile, we do not clear the document.
17 1990 Council of Europe Convention on laundering,
search, seizure and confiscation of the proceeds of crime. Back
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