Select Committee on European Scrutiny Twenty-First Report


6 Mutual recognition and execution of confiscation orders

(a)

(25335)

5738/04


(b)

(25540)

8225/04


(c)

(25667)

9465/04


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

Legal baseArticles 31(a) and 34(2)(b) EU; consultation; unanimity
Deposited in Parliament(b) 15 April 2004

(c) 17 May 2004

DepartmentHome Office
Basis of consideration(b) EM of 29 April 2004

(c) EM of 20 May 2004

Previous Committee Report(a) HC 42-xii (2003-04), para 7 (10 March 2004)
To be discussed in CouncilNo date fixed
Committee's assessmentLegally and politically important
Committee's decision(a) and (b) Cleared

(c) Not cleared

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 The term "proceeds" has been replaced by "property" to align it with the definition in Article 2(d). "Competent Authorities" has been replaced by "A court competent in criminal matters" to align it with Article 1.1.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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Prepared 17 June 2004