How to put confiscated criminal assets to good use?
- Author(s):
- Parliamentary Assembly
- Origin
- Assembly
debate on 27 April 2022 (14th sitting) (see Doc. 15500, report of the Committee on Legal Affairs and Human
Rights, rapporteur: Mr André Vallini). Text
adopted by the Assembly on 27 April 2022 (14th sitting).See
also Recommendation 2229
(2022).
1. The Parliamentary Assembly reaffirms
its full and wholehearted support for fighting organised crime and corruption.
This requires confiscating illicit profits and other criminal assets
as widely as possible. In
Resolutions
2218 (2018) and 2365 (2021), the Assembly called for
the non-conviction-based confiscation of illegal assets and the
reversal of the burden of proof, with appropriate safeguards, as
well as for the strengthening of financial intelligence units.
2. The Assembly considers that the impact of confiscating illegal
assets on the fight against organised crime and corruption is further
enhanced by making good use of confiscated financial assets and
any other confiscated property, such as buildings or vehicles, in
a way that is beneficial for society as a whole (in what is known
as “social reuse”). This can be achieved by financing specific projects
aimed at strengthening the State’s capacity to tackle organised
crime and confiscate more illegal assets or at repairing the damage
done by criminals to particular population groups, local communities,
towns or regions.
3. Instead of simply channelling seized assets into the overall
national budget, such projects send a clear and visible message
to all that crime does not pay and that society is ready to defend
itself and even use ill-gotten gains to fight crime and repair the
damage it does. Such projects build afflicted communities’ resilience to
crime and corruption by showing how confiscated property and assets
can be put to good use, in contrast to the hardship crime brings.
4. The State must be stronger than crime and reclaim the ground
occupied by the criminal underworld. The authorities must make a
visible and long-term commitment to win the trust of the populations
concerned, who should not have to live in fear of the criminals’
vengeance.
5. In international asset confiscation cases, the States where
the relevant assets have been confiscated and the States from which
the funds have come must agree on an equitable division of these
funds. This should take due account of the principle of social reuse
of the proceeds of crime (while avoiding the risk of any further misappropriation
of returned funds) and the resources mobilised to carry out the
confiscation.
6. The European Union has also called for the social reuse of
confiscated criminal assets (Regulation (EU) 2018/1805).
Paragraph
47 of the preamble to this regulation states: “Frozen
property and confiscated property could be earmarked, as a matter
of priority, for law enforcement and organised crime prevention
projects and for other projects of public interest and social utility”.
7. Various forms of social reuse of confiscated criminal assets
are already practised in several Council of Europe member States,
notably in Italy, Spain and the United Kingdom, and to a lesser
extent in Albania, Estonia, France, Georgia, Hungary, Latvia, the
Republic of Moldova, Montenegro, Norway, Romania, Slovenia and Turkey.
8. The Assembly notes the following best practices:
8.1 setting up a centralised institution
at national level responsible for the social use of confiscated criminal
assets (financial assets and movable and immovable property) with
the necessary powers and resources to administer the assets in question
and make them available for social purposes, in co-operation with
local public and non-governmental bodies;
8.2 giving priority to the use of confiscated funds to compensate
direct and indirect victims, according to a sufficiently broad definition;
8.3 using part of the confiscated assets and items to enhance
police and judicial capacity to identify, seize and confiscate as
many criminal assets as possible;
8.4 “directly using” confiscated assets for public purposes,
for example by converting mafia-owned villas into socio-cultural
centres, holiday accommodation for disadvantaged people or rehabilitation centres
for drug addicts and enabling law-enforcement agencies to use confiscated
luxury cars;
8.5 with regard to confiscated businesses, taking all possible
measures, in co-operation with business associations, trade unions
and banks, to help potentially viable companies overcome the “legality
shock” (payment of taxes and social security contributions or the
cessation of financing through money laundering), in order to avoid
the impression that “the mafia gives work, the State lays off”;
8.6 avoiding public auctions of confiscated items as far as
possible, as they may open the way to pressure being applied to
potential buyers or to the purchase of the items by frontmen for
the criminals themselves; in cases where such a sale or the takeover
of a confiscated business is necessary, strictly verifying the reliability
of the buyer or the person taking over the business;
8.7 ensuring civil society participation both in decision-making
processes and in designing and managing projects for the social
reuse of confiscated assets;
8.8 putting in place appropriate safeguards to avoid possible
conflicts of interest and to ensure transparency and accountability
for the use of confiscated assets to the same degree as for the management
of other public resources;
8.9 reporting at regular intervals to the parliament by the
competent authorities;
8.10 regular updating of legislation and administrative practice
to counter avoidance strategies used by mafia-type criminal groups.
9. The Assembly invites all member and observer States of the
Council of Europe and States whose parliaments enjoy observer or
partner for democracy status with the Assembly to:
9.1 introduce, or further promote,
the possibility of socially reusing confiscated illegal assets;
9.2 in the preparation of the relevant texts, take due account
of the best practices identified in various member States mentioned
above;
9.3 as a requested State having confiscated illegal assets
coming from a foreign requesting State, share the funds in an equitable
manner, taking into account the principle of social reuse in the
requesting State, but also the resources used to confiscate the
assets and the risk of any further misappropriation of the funds
in the requesting State;
9.4 as a State requesting the return of funds seized by a
requested State, provide the latter with precise assurances as to
the social reuse of the returned funds;
9.5 make foreign bribery a criminal offence if it is not already
and provide, in the relevant texts, for the possibility of using
any fines imposed for social reuse projects in the victim countries,
in accordance with the same principles as those applicable to confiscated
criminal assets;
9.6 concerning the assets of Russian citizens and state enterprises
subject to targeted sanctions for their responsibilities in the
war of aggression launched against Ukraine by the Russian Federation:
9.6.1 identify and freeze as many of these assets as possible,
without delay;
9.6.2 provide for the use of suitable assets, in particular
houses and apartments, for the reception of Ukrainian refugees;
9.6.3 adopt a decision on the final usage of these assets once
confiscated definitively, based on the following considerations:
these assets were stolen from the Russian people and should be returned
to them; as long as the current regime is in place, the risk of
renewed misappropriation of these assets is high; the Russian Federation
will be bound to compensate Ukraine for the damage caused by its
war of aggression. This would open the way for using these assets
to partly offset the financial debt of the Russian Federation vis-à-vis
Ukraine.
