6 Mutual recognition and execution of
confiscation orders
| (a)
(25335)
5738/04
—
(b)
(25540)
8225/04
—
(c)
(25667)
9465/04
—
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Draft Framework Decision on the application of the principle of mutual recognition to confiscation orders
Draft Framework Decision on the application of the principle of mutual recognition to confiscation orders
Draft Framework Decision on the application of the principle of mutual recognition to confiscation orders — Certificate
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| Legal base | Articles 31(a) and 34(2)(b) EU; consultation; unanimity
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| Deposited in Parliament | (b) 15 April 2004
(c) 17 May 2004
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| Department | Home Office |
| Basis of consideration | (b) EM of 29 April 2004
(c) EM of 20 May 2004
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| Previous Committee Report | (a) HC 42-xii (2003-04), para 7 (10 March 2004)
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| To be discussed in Council | No date fixed
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| Committee's assessment | Legally and politically important
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| Committee's decision | (a) and (b) Cleared
(c) Not cleared
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Background
6.1 The proposed Framework Decision provides for confiscation
orders made in one Member State to be recognised and 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 of decisions
in criminal matters. The aim of the 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 minimal formalities.
The proposal
6.2 Document (b) is a revised proposal which replaces document
(a). There have been a number of detailed amendments to the text.
6.3 Recital 4 has been amended and refers directly
to Article 2 of the Council of Europe Convention on money laundering
rather than to general provisions relating to confiscation in
the Convention. Recital 6 has been amended to take account of
the adoption of the Framework Decision on the mutual recognition
of orders freezing property or evidence. Recital 8 has been updated.
The term "proceeds" has been replaced by "property"
to align it with the definition in Article 2(d). "Competent
Authorities" has been replaced by "A court competent
in criminal matters" to align it with Article 1.1. The recital
also takes account of the general approach reached on the Framework
Decision on the confiscation of crime related proceeds, instrumentalities
and property.
6.4 Recital 9(aa) has been added. The term "Objects"
has been deleted from the definition of property in Article 2(d)(ii)
at the request of one Member State, on the grounds that its meaning
was not clear. Instead it accepted this recital, which states
that the terms "proceeds" and "instrumentalities"
are sufficiently clear to include the objects of offences. This
approach is similar to that taken in the 1990 Council of Europe
Convention on money laundering, but a similar provision has been
added to the explanatory note to the convention. Recitals 9(b)
and 13 have also been added. The former is intended to ensure
that Member States use all means available to them to identify
the correct location of the property, whilst the latter makes
clear that the Framework Decision is not intended to prejudice
the end to which the Member States shall apply the amounts obtained
after the application of Article 14 on the disposal of confiscated
assets.
6.5 Article 2 on definitions has been amended to
remove those terms that have become otiose as a result of other
changes.
6.6 A paragraph has been added to Article 4(1) stating
that "[if] there are no reasonable grounds [which would allow
the issuing] Member State to determine the Member State to which
the confiscation order may be sent", the order may be sent
to the Member State where the natural or legal person against
whom the order has been made is normally resident or has a registered
seat.
6.7 Article 4(a)(2) has been expanded so that confiscation
orders concerning specific items of property can be transmitted
to more than one executing state where the confiscation of an
item of property involves action in more than one executing state.
It can also be sent to more than one state where the competent
authority of the issuing state has reasonable grounds to believe
that a specific item of property covered by the confiscation order
is located in one of two or more specified executing states.
6.8 Article 7.2(g) has been amended to become a ground
for refusal only where the confiscation order has been made under
the extended confiscation provisions in Article 2(d)(iv). Article
2(d)(iv) defines property as that which the court in the issuing
state has decided is liable to confiscation under any provisions
relating to extended powers of confiscation under the law of the
issuing state. Due to this amendment, Article 7.2(g) no longer
deals with orders falling within Article 2(d)(iii), i.e. orders
falling within the extended confiscation arrangements provided
for in Articles 3(1) and (2) of the draft Framework Decision on
the confiscation of crime related proceeds, instrumentalities
and properties. These are now dealt with in Article 7.2 (a),
which provides that such an order can only be refused when it
falls outside of the scope of the extended confiscation option
adopted by the executing Member State and could not have been
executed in a similar domestic case under the national law of
the executing state.
6.9 The obligation to consult in Article 7.4 has
been amended to require consultation where an order has been refused
under paragraph 2(d) (which permits refusal of execution where
the rights of third parties make it impossible to do so) or where
execution would be inconsistent with the ne bis in idem
principle.
6.10 Article 9.1(aa) has been amended to allow postponement
where it is considered that there is a risk of confiscating more
than the amount specified in the order. The reference to "total
value of the confiscation" has been replaced by "total
value derived from its execution". Article 9.1(d) has been
added so that cases can be postponed where the property in the
order is already the subject of confiscation proceedings in the
executing states. Article 9.1(b) has been amended so that, in
addition to informing the competent authority of the issuing state
of the postponement of the confiscation order, the issuing state
must also comply with the obligations in Article 12(a)2 (which
states that the total derived from the execution of the confiscation
order may not exceed the maximum amount specified in the confiscation
order).
6.11 Consequential amendments have been made to Articles
9.2, 11.4, 12(a) and 15(a).
6.12 Article 19.3 has been amended to include declarations
made under Article 6.4 where Member States are able to declare
that they will not recognise orders made under the extended confiscation
provisions in Article 2(d)(iv). The Council will inform the Commission
and Member States of declarations made under this provision.
6.13 Finally, a new Article 19(5) has been added
to oblige Member States to inform the Council and the Commission
of the number of cases that they have refused at the beginning
of each calendar year. Within five years of the date of implementation
of the Framework Decision the Commission is to produce a report
on the basis of the information received along with any initiatives
it deems appropriate.
The certificate
6.14 Document (c) is the draft certificate, which
accompanies the Framework Decision and which the issuing Member
State is to send with the order to the executing Member State.
6.15 Section (a) requires details of the Member State
issuing the confiscation order to be provided. Section (b) provides
details of the court that issued the decision imposing the confiscation
order, including contact details so that additional information
about the order can be sought. Section (c) details the authority
competent for the enforcement of the decision imposing the confiscation
order in the issuing state if the authority is different from
that in section (b). Section (d) requires information about any
central authority which has been made responsible for the administrative
transmission and reception of the confiscation orders in the issuing
state. Section (e) provides details of which authorities may
be contacted in relation to specific queries when an authority
in addition to the court has been used.
6.16 Section (f) requires details to be given of
any other executing state. Section (g) requires details of the
situation where a confiscation order has been sent to more than
one executing state, because a specific item of property involves
action in more than one state. Section (h) requires information
about the natural or legal person on whom the financial penalties
has been imposed.
6.17 Section (i) details information on the confiscation
order itself. The issuing state must provide details about whether
the order concerns an amount of money or property. The section
corresponds to the definition of property in Article 2(d) of the
Framework Decision. The issuing state must indicate whether the
property represents the proceeds of an offence, the instrumentalities
of an offence, or whether it is liable to confiscation under the
extended confiscation options in Article 3(1) and 3(2) of the
framework decision on confiscation of crime-related proceeds,
instrumentalities and property, or whether it is liable to confiscation
under any other provision under the law of the issuing state.
6.18 Section (j) details the status of the confiscation
order. Here the issuing state must confirm whether the order
is the final decision and that an order against the same person
in respect of the same acts has not been delivered in the executing
state.
6.19 Section (k) concerns the situation where part
of the confiscation order has been partially executed in the issuing
state or in another state. Section (l) enables the issuing state
to indicate, in circumstances where an order concerns an amount
of money, whether or not it allows the confiscation in the executing
state to take the form of the requirement to pay a sum of money
corresponding to the value of the property. In section (m) the
issuing state can state whether or not the issuing state allows
for the application of alternative measures where it is not possible
to enforce the confiscation order, either totally or in part.
Section (n) provides details and the official stamp of the authority,
which issued the confiscation order.
The Government's view
6.20 In her Explanatory Memorandum of 29 April 2004,
the Parliamentary Under-Secretary of State at the Home Office
(Caroline Flint) expresses the Government's agreement with the
above revisions of the proposal. She does not identify any areas
of continued concern or reservations on the part of the Government.
6.21 In her subsequent Explanatory Memorandum of
20 May 2004, which deals with the draft certificate, the Minister
writes that overall "the Government is satisfied that this
Certificate covers the relevant information which would permit
the executing state to discharge its obligations under the Framework
Decision." The Minister does, however, indicate three areas
where the Government is currently sounding out the Presidency
with a view to making amendments before the text is finalised.
6.22 Regarding section (i) of the certificate the
Minister writes:
"The Government is of the opinion that more
detail is needed in this section. If the confiscation order has
been sent under Article 3(1) and 3(2) of the Framework Decision,
the issuing state should indicate under which of the three options
the order is being sent. This is necessary because the executing
state can refuse to execute the order on the grounds that it falls
outside the scope of the option adopted by the issuing state.
Therefore more information is needed for the executing state.
Under point 3 of this section the issuing state must indicate
from a list of offences those in relation to which the confiscation
order has been made. This will need expansion to cover the maximum
sentence which is available for that offence in the issuing state
(to ensure that the three years imprisonment criterion is met)
and, for other offences, further information to enable any dual-criminality
test to be applied."
6.23 In relation to section (j) the Minister informs
us that:
"the Government believes that this section
should also provide for cases where the defendant was not represented,
nor informed, and has not indicated that he does not object to
the confiscation order. This would cover for example cases such
as those under Sections 27 and 28 of the Proceeds of Crime Act
2002. We are currently discussing this with the Presidency and
the Council Secretariat and will seek that appropriate language
be added."
6.24 Finally, the Minister emphasises the Government's
awareness "that there is no separate section regarding appeals
against confiscation orders in the issuing state. However by
their very nature (and the definition in the Framework Decision),
confiscation orders (unlike freezing instruments) are final decisions
and the scope for challenge on the merits will be very limited.
Persons subject to the order will of course be able to challenge
the modalities of execution, under the national law (Article 11
of the Framework Decision) of the executing state. We are however
liaising with the Presidency and the Secretariat over the provision
of contact details in the Certificate if a challenge in the issuing
state is contemplated."
6.25 The Minister also informs us that the Irish
Presidency is continuing negotiations with a view to reaching
a general approach on 8 June and final agreement before the end
of the Irish Presidency, in line with the deadline set by the
Spring European Council.
Conclusion
6.26 We thank the Minister for her helpful summary
and comments on the latest amendments to the proposal. We note
that the Government no longer has any reservations about the current
text of the proposed measure. We agree with the Government's
position and agree that the latest text of the proposal satisfactorily
takes account of the relevant provisions under domestic law.
We are content to clear documents (a) and (b).
6.27 We note the Government's remaining concerns
about aspects of the draft certificate and hold document (c) under
scrutiny pending submission of a revised draft certificate. We
note the Minister's concerns over the case of absconding defendants,
but we are concerned that any wording dealing with such cases
may increase the risk of orders being made against a defendant
who has not been properly informed of the confiscation proceedings.
We wish to see the outcome of further negotiations on this important
point before clearing the document from scrutiny.
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