New legal instruments for the confiscation of criminal assets

The Dutch government will introduce legislation to provide additional legal means to confiscate criminal assets. Today, Minister Grapperhaus of Justice and Security submitted for consultation the Draft Bill on the Criminal Justice Approach to Subversive Crime II (conceptwetsvoorstel strafrechtelijke aanpak ondermijning II), which provides new instruments to disrupt criminal operations. This will make it possible to confiscate money and property originating from criminal activity without first having to obtain a criminal conviction. It also introduces the instrument of an emergency asset freeze on financial transactions to prevent criminal money being siphoned off.

Minster Grapperhaus:

‘Criminals are motivated by money, but their drug money is anything but a safe asset. We are not just going after their assets, their luxury villas, expensive watches, cars and yachts. We are also directly targeting their criminal operations. We are increasingly depriving criminals of opportunities to invest in further illegal activities. This way, we prevent dirty money from circulating in society and being used in the legal economy or reinvested in criminal activities.’

Non-conviction-based confiscation

The bill introduces new civil-law proceedings for ’non-conviction based confiscation’ (NCBC), which will enable the confiscation of criminal assets and illegally obtained property without first having to obtain a conviction of a person for a criminal offence. This will make it irrelevant in whose name the property is registered or that the owner is unknown. For confiscation by the government through these civil-law proceedings, all that will be required is that the Public Prosecution Service can demonstrate to the court that the property originates from criminal activity. If the police raid a house and find a large amount of cash, there will no longer be any need for lengthy criminal proceedings to forfeit that money to the state if those with whom it was found cannot give a proper explanation for the presence of so much cash.

The NCBC procedure will thus enable a faster intervention to take property originating from criminal activity off the market. Currently, lengthy criminal proceedings against a suspect are required before the investigative services and the Public Prosecution Service can confiscate criminal property, especially when its ownership is concealed through complex ownership structures, and also when international cooperation through legal assistance is required. The strength of the new confiscation method is that it reverses the current operating procedure: it focuses on the property, rather than the individual.

In view of breaching an individual’s right of ownership, civil-law confiscation will only be possible after a final judgment. To that end, the government will be required to demonstrate that the property is linked to crime. It will not be required that a specific criminal offence is proven. If there are any individuals who can lay claim to the property, they will need to be able to explain that the property originates from a legal source. The necessary legal safeguards will also be incorporated, such as the right to legal representation and the possibility to appeal the court judgment. This will also include the possibility for individuals to claim compensation if they have been disproportionately affected by the decision on the confiscation.

Emergency asset freeze

Payment transactions are becoming faster, increasingly take place electronically, and are not affected by borders. Criminals try to exploit this to siphon off their criminal profits, often to locations abroad. To tackle this, the bill introduces the ’emergency asset freeze’, which will broaden the legal basis for suspending financial transactions at the request of the Financial Intelligence Unit in case of questions about the background to a transaction and a possible link to money laundering. This new legal instrument can prevent that criminal money disappears before the transaction becomes the subject of a criminal investigation.