Pan-European legislation will target wealthy criminals’ assets

Criminals gangs in Europe target various EU states to hide much of their €135bn yearly haul, handing it over to relatives or investing it in legitimate businesses.

But new pan-European legislation, similar to Ireland’s Criminal Assets Bureau, aims to confiscate goods and money, even if the original owner is dead or the authorities cannot prove how people came by their ill-gotten gains.

European Commissioner Cecilia Malmström outlined a case involving Irish and British criminals as an example of what could be achieved.

She referred to Operation Shovel where two years ago Irish, British and Spanish authorities made 38 arrests and seized 60 luxury properties in the Costa del Sol along with 25 luxury cars and froze 180 bank accounts.

The draft rules do not go as far as the Irish legislation where, if someone is suspected of crime and cannot explain where their goods come from, they can be confiscated.

But they allow for assets to be confiscated: if they are not directly linked to a specific crime but result from similar criminal activities by a convicted person; when transferred to a third party; when the suspect is dead, terminally ill or has fled.

It could allow the authorities to freeze assets that could be moved and allows investigations into a person’s assets to continue after a conviction.

The draft law, if passed, would also require authorities to manage frozen or confiscated assets so they do not lose value that would benefit the state when finally seized, and requires all countries to keep confiscation and asset recovery statistics.

Similar legislation exists in Italy to tackle the huge €150bn per year Mafia operations and has proved very successful. In one case alone in 2010, assets worth up to €2bn were seized from the heirs of a suspected criminal who had died in mysterious circumstances.

As a result, the state seized assets including 136 apartments, 11 warehouses, 75 land estates, eight shops, two villas, 51 garages, company shares and bank accounts, worth between €700m and €2bn.

The businessman’s relatives were not able to explain where they came from or the big difference between the income the deceased declared, and the value of the assets.

Commissioner Malmström explained the new rules will mean a single minimum standard across the EU, making it a lot easier to have cross-border co-operation between the authorities. Countries that wish to go further are free to do so, she added.

At the moment organised crime gangs reinvest substantial profits in legal businesses resulting in fraud which costs an estimated 1% of EU GDP each year, pushing up prices and depriving the state of revenues.

The gangs activities are often cross border, and the assets are increasingly invested outside the country where they live.