By Elizabeth Hearst for AMLi
The European Commission today announced major new powers which criminalise sanctions violations – and also give EU police agencies greater powers to freeze the assets of the bloc’s organised crime gangs.
Significantly, the new powers will also extend non-criminal conviction based confiscation powers to seize assets from criminals in cases where it has not been possible to secure a criminal conviction.
The measures will give police agencies across Europe to seize “unexplained wealth linked to criminal activities” where officers can satisfy a court the frozen assets derive from crime and the “value of property is substantially disproportionate to the lawful income of the owner.”
Home Affairs Commissioner Ylva Johansson said the legislation would allow organised crime investigators to pursue Europe’s transnational crime gangs, such as the Dublin and Dubai Kinahan Organised Crime Group (OCG) – who were recently sanctioned by the US government.
“It’s a real new tool to after the highest bosses in these multinational organised crime groups,” she told reporters.
There were two main parts of the proposed new Directive, which has to be mandated by the European Council of governments and the European Parliament:
- Tackling the EU’s Russia sanctions busters and criminalising their actions
- Taking on Europe’s major international crime gangs through enhanced asset seizure laws
In a statement, the Commission said that while Russian aggression on Ukraine is ongoing, it is “paramount that EU restrictive measures are fully implemented and the violation of those measures must not be allowed to pay off.”
Today’s proposals will aim to ensure assets of sanctioned individuals and entities can be “effectively confiscated” in the future.
As part of the proposals, the Commission has called for the addition of violating EU sanctions to the list of EU crimes, which they say will “allow to set a common basic standard on criminal offences and penalties across the EU.”
Common rules would make it “easier to investigate, prosecute and punish violations of restrictive measures” in all EU Member States.
The Commission says that the violation of sanction is a particularly serious crime, as it may “perpetuate threats to international peace and security”, and boasts a clear cross-border context, requiring a “uniform response” at EU and global level.
The proposed powerful new Directive on criminal sanctions would include criminal offences such as:
- Engaging in actions or activities that seek to directly or indirectly circumvent sanctions including by concealing assets,
- Failing to freeze funds belonging to, held or controlled by the sanctioned person or entity
- Engaging in trade on goods covered by trade bans
The Commission has also put forward a proposal for a Directive on asset recovery and confiscation, which the Commission says is to “ensure that crime does not pay by depriving criminals of their ill-gotten gains and limiting their capacity to commit further crimes.”
The Commission has proposed extending the mandate of the Asset Recovery Offices, expanding the criteria for confiscation of assets from a wider set of crimes, and establishing an asset management office in all EU Member States.
Justice Commissioner Didier Reynders said the EU “must ensure that persons or companies that bypass the EU restrictive measures are held to account.”
“Such action is a criminal offence that should be sanctioned firmly throughout the EU… We need to close the loopholes and provide judicial authorities with the right tools to prosecute violations of Union restrictive measures,” he said.
Commissioner Johansson added: “Crime bosses use intimidation and fear to buy silence and loyalty. But usually their greed means embrace of a rich lifestyle. That always leaves a trail.”
“The European Commission is proposing new tools to fight organised crime by following this trail of assets.
“This proposal allows Asset Recovery officers to trace and freeze: trace where the assets are and issue an urgent freezing order. The tracing allows assets to be found and the urgent freezing gives time for courts to act,” she added.
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