Members of the Council of the European Union have agreed on sweeping new measures for the freezing and confiscation of so-called “unexplained assets.” The Council has signed off on a proposal that was submitted late last year to change its policies on wealth confiscation since the existing framework “needed to be updated.”
“The Directive notably aims at laying down minimum rules on tracing and identification, freezing, confiscation and management of property within the framework of proceedings in criminal matters and to reinforce the capacity of competent authorities to deprive criminals of the proceeds from criminal activities.”
The directive, dubbed as a “Proposal for a Directive of the European Parliament and of the Council on asset recovery and confiscation,” states that in order to maintain harmonization and clarity across the EU, the property that can be frozen or seized should be “defined broadly.” It also mentions crypto by name.
“The definition should cover all forms of property, including crypto assets.” The directive also makes it clear that assets can be seized simply if there is no proof of how they were legally acquired, or if the asset’s owner is linked to other people involved with criminal organizations.
According to the new rules, owners of “unexplained assets” will have to prove that the value of their property is not “substantially disproportionate” to their lawful income or that there is no illicit source of the property.
“When determining whether or not the property in question derived from criminal conduct activities, the national courts should take into account all relevant circumstances of the case, including the available evidence and specific facts, such as that the value of the fact that the property is substantially disproportionate to the lawful income of the personal owner.
Another circumstance that could be considered is the absence of a plausible licit source of the property, as the provenance of lawfully acquired property can normally be accounted for. The person’s connection to people linked to a criminal organisation could also be of relevance. The assessment should be made on a case-by-case basis depending on the circumstances of the case.”
Now that the Council has agreed on the directive, it will now begin negotiations with the European Parliament to settle on a final legal text. Once a directive is fully adopted by member states, EU countries are given three years to bring it into effect.