Select Committee on European Scrutiny Eleventh Report


13. CONFISCATION OF CRIME-RELATED PROCEEDS AND PROPERTY


(24038)

14582/02


Draft Framework Decision on confiscation of crime-related proceeds, instrumentalities and property.

Legal base:Articles 31 and 34(2)(b) EU; unanimity; consultation
Document originated:28 November 2002
Deposited in Parliament:3 December 2002
Department:Home Office
Basis of consideration:Minister's letter of 8 January 2003
Previous Committee Report:HC 63-v (2002-03), paragraph 8 (18 December 2002); and see (23065) 9956/02, (23811) 12250/1/02: HC 152-xli (2001-02), paragraph 9 (6 November 2002)
To be discussed in Council:No date fixed
Committee's assessment:Legally and political important
Committee's decision:Cleared



Background

  13.1  We last considered this proposal on 18 December 2002. We regarded it as a considerable improvement on previous versions. We also noted the Government's remaining reservations and expressed our own concern about the lack of clarity of some provisions. We decided to ask the Minister for further information and not to clear the document.

  13.2  Like its predecessors, this version of the proposal seeks to introduce new powers that would go beyond the existing provisions for the confiscation of the proceeds of specific crimes. Our remaining concerns as well as those of the Government all relate to the revised Article 3, which requires Member States, in certain circumstances, to introduce extended powers to confiscate from the defendant property that is not the proceeds of the offence of which he has been convicted.

  13.3  In his Explanatory Memorandum of 10 December 2002 the Parliamentary Under-Secretary of State at the Home Office (Mr Bob Ainsworth) expresses the Government's concern that the revised proposal may not apply to money laundering offences. We asked the Minister to clarify whether this meant that the Government intended to oppose the proposal until an appropriately revised text had been agreed which would ensure that extended confiscation powers applied to money laundering offences throughout the EU.

  13.4  The Minister also noted that in its revised form Article 3(3), which states that Member States "may" consider extending confiscation to the defendant's "closest relations" and to legal persons "controlled" by the defendant or by his closest relations, no longer imposed any obligations and was therefore otiose. We asked the Minister for assurance that this meant that the Government would seek to ensure the deletion of Article 3(3). We also asked for an explanation of the term "closest relations".

  13.5  We also expressed our concern about the wording of Article 3(2), which provides that Member States must introduce the extended powers of confiscation under Article 3(1) "at least where ... a national court based on specific facts is fully convinced that the property in question has been derived from criminal activities of the convicted person". We asked the Minister to explain, first, whether the expression "fully convinced" denoted the same standard of proof as "beyond reasonable doubt" and, secondly, to clarify the meaning of the phrase "criminal activities".

The Minister's reply

  13.6  In his letter of 8 January 2003 the Minister writes as follows:

"I note that the Committee considers the document we deposited last month to be a considerable improvement on previous versions. You raise issues on three particular areas, however: Article 3(3), the application of extended confiscation powers to the offence of money laundering, and the contents of Article 3(2).

"The Explanatory Memorandum of 10 December [2002] expressed the view that Article 3(3) of the instrument was superfluous and should be deleted. This was because it no longer imposed any obligations on Member States, stating only that they "may consider" extending confiscation to the defendant's closest relations etc. Unfortunately, this text remains, but as the Article does not require Member States actually to do anything, I do not think we need to insist on its deletion.

"I agree that the meaning of "closest relations" in Article 3(3) is not entirely clear. It would need to be interpreted by any Member State that proposed to introduce the measures suggested in the Article. However Article 3(3) would have no binding legal effect on Member States. They will remain free to consider the measures it suggests, or any other measures, anyway. Therefore, even if the definition of "closest relations" was clearer, this could not prevent Member States from extending confiscation beyond that definition, if they wanted to. Therefore, tightening the definition would not be of any practical value.

"I am pleased to say that we have now secured agreement to the inclusion of money laundering in the list of offences to which extended confiscation will apply. Therefore, the question of our opposing the proposal until this is agreed to does not arise.

"So far as Article 3(2) is concerned, my understanding is that the expression "fully convinced" represents a standard of proof that is no lower than our criminal standard of "beyond reasonable doubt". I do not consider the term "criminal activities" to refer necessarily to criminal convictions, either in the State imposing the confiscation or elsewhere. Rather, I consider that it refers to circumstances in which the court concludes that the defendants property has been acquired as a result of illegal activities, regardless of whether he or she has been convicted for such activities."

  13.7  The Minister concludes with a general comparison of the proposed measure with existing domestic legislation:

"Our own confiscation legislation — the Proceeds of Crime Act 2002 — takes a similar, if broader approach. It allows the Court, in certain circumstances, to confiscate a sum equal to what it finds to be the defendant's benefit from crime, even if he or she has not actually been convicted of acquiring those assets illegally. The draft Framework Decision will not require us to make any changes to our existing law on confiscation, as set out in that legislation."

Conclusion

  13.8  We thank the Minister for his reply, with its welcome information that the Government has secured agreement to include money laundering amongst the offences to which the proposal will apply. We are grateful to the Minister for his explanation of the effect of Article 3(2) and, in addition, for his helpful comment that it does not go beyond existing domestic legislation.

  13.9  In relation to Article 3(3), we note the Minister's continuing doubts about the clarity of aspects of its wording but we agree with him that seeking further amendment or deletion of the provision would have little practical value when the Article no longer requires Member States to do anything.

  13.10  We also welcome the Minister's assurance that the proposal will not require any changes to domestic legislation.

  13.11  We have no further questions to put to the Minister and are content to clear the document.


 
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Prepared 12 February 2003