Select Committee on European Scrutiny Twenty-Seventh Report


6. Execution of Confiscation Orders

(a)

(24432)

8353/03


(b)

(24545)

9158/03


Draft framework Decision on the execution in the European Union of Confiscation Orders.


Draft framework Decision on the execution in the European Union of Confiscation Orders.

Legal baseArticles 31(a) and 34(2)(b) EU; unanimity; consultation
Document originated (b) 7 May 2003
Deposited in Parliament (b) 20 May 2003
DepartmentHome Office
Basis of considerationEM of 5 June 2003
Previous Committee ReportHC 63-xxiii (2002-03), paragraph 9 (4 June 2003)
To be discussed in CouncilNo date set
Committee's assessmentLegally and politically important
Committee's decision(a) Cleared

(b)Not cleared; revised proposal awaited

Background

6.1 The proposed framework decision provides for confiscation orders made in one Member State to be enforced in any other Member State. It forms part of a programme of measures to assist in the fight against organised crime and money laundering and to implement the principle of mutual recognition in criminal matters. The aim of the programme of measures is to develop a system by which each EU Member State recognises as valid certain pre- and post-conviction decisions of other Member States' judicial authorities with the minimum of formality.

The document

6.2 Document (b) is a revised proposal which replaces document (a). Article 1 of the revised proposal sets out the objective of the proposed measure, which is to facilitate the recognition and execution between Member States of confiscation orders made by a court.

6.3 Article 2 covers the definitions used in the text. The definition of "property" in Article 2(d) has been extended in two respects. Article 2(d)(iii) now refers to property which the issuing state has decided "is liable to confiscation resulting from the application in the issuing state of any of the extended powers of confiscation specified in Article 3(1) and (2) of the draft Framework Decision on confiscation of crime-related proceeds, instrumentalities and property." Article 2 (d)(iv) now refers to "property which the court has decided is liable to confiscation under any other provisions relating to extended powers of confiscation under the law of the issuing state."

6.4 Article 5(1) provides a list of offences which may give rise to the execution of a confiscation order. Article 5(3), which deals with certain exceptions to the general rule, provides that recognition may be made subject to the condition that the acts giving rise to the criminal proceedings on which the order was based also constitute an offence in the executing State.

6.5 Article 7 sets out the grounds on which the executing State may refuse to execute a confiscation order and has been amended in minor respects. Articles 7.1 and 7.2 have been revised in the light of developments on the draft Framework Decision on Financial Penalties and now read that a Member State may "refuse to recognise and execute" an order. Article 7.2(f) relates to territoriality and has been amended to reflect practice under the Proceeds of Crime Act 2002. More important is the additional text inserted in new Article 7(g). Under Article 7(g), Member States may refuse to recognise and execute a confiscation order sent under Article 2(d)(iii) and (iv), where to do so would be contrary to their fundamental legal principles. As far as Article 2(d)(iii) is concerned, it will be necessary in addition for the executing state to have opted for a different extended confiscation regime from the issuing state before it may refuse recognition on this ground.

6.6 Article 9.1.(b) has been expanded to cover criminal "proceedings" in addition to "criminal investigations." Article 9.2. has also been amended and now more appropriately refers to property being "removed."

6.7 Article 10 which deals with multiple requests has been amended in two ways. First, it makes clear that the grounds given are only examples and are not mandatory. Secondly, it removes earlier reference to the use of the property to meet compensation claims.

6.8 Article 11, which deals with the law governing execution, has likewise been revised. Article 11.4 has been deleted as impracticable. Article 11.5. has been re-drafted and clarified as a result.

6.9 Article 14 on the sharing of assets remains under negotiation and no new text has been included in this proposal.

6.10 All other Articles of the proposed measure remain unchanged.

The Government's view

6.11 In his letter of 5 June 2003 the then Parliamentary Under-Secretary of State at the Home Office (Mr Bob Ainsworth) welcomes many of the revisions to the latest proposal on the grounds that they either bring the text into line with domestic legislation as restated in the Proceeds of Crime Act 2002, or improve the drafting of previously ambiguous or otherwise unclear provisions.

6.12 The Minister expressly welcomes the extension of the definition of "property" in Article 2(d) through the addition of subparagraphs 2(d)(iii) and 2(d)(iv) as these have been added as a result of a proposal from the United Kingdom and certain other Member States "to include extended confiscation provisions in this Framework Decision." He notes that Article 2(d)(iv) enables confiscation orders made the "criminal lifestyle" provisions of the Proceeds of Crime Act to be sent for execution to other Member States. He adds:

"You will be aware that with no language regarding extended confiscation, the UK was in danger of becoming party to a mutual recognition instrument under which UK confiscation orders made under [the Proceeds of Crime Act] could not be sent to other Member States for execution."

6.13 The addition in Article 5.3, of the words "criminal proceedings on which the order was based" also reflects a UK proposal and the Minister accordingly welcomes it. He adds that "a similar amendment will be required in article 5.1."

6.14 The Minister likewise supports the amendments to Articles 7.1, and 7.2, including subparagraph (f) of 7.2, as these bring the proposal into line with the provisions of both the draft Framework Decision on Financial Penalties and current practice under the Proceeds of Crime Act 2002. In relation to Article 7.2(g), which allows Member States to refuse and execute a confiscation order sent under Article 2(d)(iii) or (iv) where to do so would be contrary to their fundamental legal principles, the Minister expresses some reservations and comments:

"The Government acknowledges that this provision provides for a wider range of grounds for non-recognition than is desirable, including the ground that the issuing state has opted for different extended confiscation measure in the harmonisation instrument than the executing state. However, in order for a number of Member States to accept the extended confiscation provisions needed by the United Kingdom these non-recognition clauses are necessary."

6.15 The Minister adds that:

"Negotiations are still ongoing with regard to these proposals for Article 2(d) and the grounds for non-recognition, and have proved particularly difficult. However, the inclusion of these provisions in the text marks a significant step forward for the United Kingdom's position."

6.16 Finally the Minister endorses the changes made to Articles 9, 10 and 11. He adds that no new text has been suggested for Article 14 and that the issue of how assets are to be shared remains under negotiation.

Conclusion

6.17 We thank the Minister for his helpful comments on the latest text of the proposal. We note the Government's reservations about the new Article 7.2(g) but share its view that the new provision can be accepted in return for the insertion in the latest text of Article 2(d) of options (iii) and (iv). We agree with the Government in welcoming the other amendments.

6.18 We are content to clear document (a), as this has been superseded, but hold document (b) under scrutiny pending deposit of a further revised proposal. We also ask the Minister to keep us informed both about the negotiations on a new version of Article 14 on asset sharing and about any progress the Government is making in securing the redrafting of Article 5.3.


 
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