The European Parliament has reached a political agreement on an EU regulation on asset recovery and seizure. The new directive establishes minimum standards across the Union on the tracing, identification, freezing, seizure and management of criminal goods. This agreement should enhance the capabilities of Member States to fight organised crime.

The directive should apply to a wide range of crimes, such as organised crime, terrorism, human trafficking and drug trafficking. It also entails an obligation for Member States to ensure that the authorities involved in tracing, freezing and managing criminal money have qualified staff and the appropriate financial, technical and technological resources.

The proposed rules will also apply to the violation of sanctions once a still pending directive on the definition of criminal offences and sanctions for violation of EU restrictive measures is adopted. As a result, individuals and companies that profit from circumventing sanctions will see their profits seized in the same way as those of human traffickers or drug cartels.

Member States will have to strengthen asset recovery offices, whose role will be to facilitate cross-border cooperation in relation to asset-tracing investigations.

Asset recovery offices will also be tasked with tracing and identifying criminal money, in support of asset-tracing investigations conducted by state authorities and the European Public Prosecutor’s Office. They will also perform the tracing and confiscation of proceeds that are subject to a seizure or confiscation order issued by an agency of another Member State.

In order for asset recovery offices to be able to perform their tasks, Member State governments will have to ensure that they are given access to the relevant national databases and registers. In some cases, access must be immediate and direct.

According to the agreed text, Member States must adopt measures to enable the freezing of goods to ensure a possible seizure and to ensure, in the event of a final conviction, the seizure of instrumentalities and proceeds derived from a criminal offence.

However, Member States will not only be obliged to ensure the seizure of criminal money. They will also have to adopt rules allowing them to seize goods of a value corresponding to the criminal proceeds.

Where criminal goods or goods of equal value are transferred to a third party, it should also be possible to seize them, but only if the third party knew or should have known that the purpose of the transfer or acquisition was to avoid confiscation.

In some cases, the seizure of criminal proceeds will also be possible where criminal proceedings have been initiated but cannot be continued.

For the first time for many Member States, a new directive on the seizure of unexplained wealth will allow, under certain conditions, the seizure of goods identified in the context of an investigation relating to criminal offences, provided that a state court is satisfied that the identified goods derive from criminal activities committed within the framework of a criminal organisation and that these activities result in a substantial financial benefit. The agreement pays particular attention to procedural guarantees.

Member States will have to designate authorities (asset management offices) to manage frozen or seized goods, either by direct management or by providing support and expertise to other bodies responsible for the management of frozen and seized goods. Member States should also allow the sale of frozen goods, even before final seizure, under certain conditions, for example if the goods are perishable.

According to data from Europol, criminal organisations accumulate revenues estimated to amount to at least €139,000 million annually.

Despite the existence of a number of EU laws on the tracing and seizure of illegal goods, in 2020, the Council called on the Commission to strengthen the legal framework. The European Parliament also called for stricter asset recovery rules. This draft directive was proposed on 25 May 2022.

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