Confiscation and due process Lisa van der Wal

Confiscation and due process Lisa van der Wal The International Academy of Financial Crime Litigators October 26, 2019

Prejudgment attachment For the purpose of preserving the right of recovery for a fine and/or a confiscation order to be imposed by the court. Legal requirements: - felony; - maximum fine of the 5 th category can be imposed; - prior authorization by the examining magistrate.

Prejudgment attachment - Very commonly used in white collar crime cases. - The seized assets do not have to be linked to a specific crime. - The PPO provides an estimation of the illegaly obtained profits.

Prejudgment attachment Although there exists only a suspicion the suspect is factually deprived of his property. For example, when bank accounts are frozen the suspect, whether it is a company or an individual, has no access to the seized funds. The suspect therefore cannot comply with his payment obligations and is not able to pay legal fees.

Prejudgment attachment The value of the frozen/seized assets are often not in reasonable proportion to the expected confiscation order. The PPO insufficiently takes into account the proportionality when it seizes assets.

Prejudgment attachment – legal remedies? - Discussions with PPO to partially lift the attachment in order to make payments necessary for the continuation of the business (for companies), and to make sure they can pay the mortgage or rent and the basic needs (for individuals). PPO not often willing to lift the attachment, only in exceptional cases, where an amount per month was lifted to pay legal fees.

Prejudgment attachment – legal remedies? - File a written complaint against the prejudgment attachment with the court. However, the Court’s assessment of the complaint is very marginal. The Court is not allowed to anticipate the outcome of the criminal and confiscation case.

Prejudgment attachment – legal remedies? The court is only allowed to assess whether: - the legal requirements for the prejudgement attachment are met; and - it is not ‘highly unlikely’ that the court who will rule on the merits of the case will impose a fine or confiscation order.

Prejudgment attachment – legal remedies? The Court does not have to assess whether the attachment meet the requirements of proportionality. In the legitimate interest of the person whose assets have been seized, the Court should review the proportionality of the prejudgment attachment of its own motion.

Prejudgment attachment – legal remedies? - Supreme Court of the Netherlands ruled in 2008 that there may be circumstances in which the Court has to rule about the proportionality. The defence has to bring forward arguments which may result in a further assessment by the Court.

Prejudgment attachment – EHRM Even if an interference has taken place subject to the conditions provided for by law and in the public interest, there must also be a reasonable relationship of proportionality between the means employed and the aim sought to be realised by any measures applied by the State, including measures designed to control the use of the individual’s property.

Prejudgment attachment – EHRM That requirement is expressed by the notion of a “fair balance” that must be struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights (Hutten. Czapska v. Poland, Depalle v. France and Herrmann v. Germany).

Prejudgment attachment – EHRM Džinić v. Croatia, EHRM 17 August 2016 (38359/13) The impugned seizure of the applicant’s real property in the context of the criminal proceedings at issue, although in principle legitimate and justified, was imposed and kept in force without an assessment of whether the value of the seized property corresponded to the possible confiscation claim.

Prejudgment attachment – EHRM The Court therefore finds that the application of such a measure was not adequate to demonstrate that a requirement of “fair balance” inherent in the second paragraph of Article 1 of Protocol No. 1 was satisfied.

Prejudgment attachment – legal remedies? The Dutch complaint procedure is not an effective legal remedy against the prejudgment attachment. Although provisional, the suspect can be deprived of his property for many years. Prejudgment attachment may have final consequences.

Confiscation in The Netherlands Dutch PPO describes confiscation as an important part of combatting organized crime as money is the driving force, the motive and gain from mostly all criminal offences. It has to be made clear that crime doesn’t pay. Furthermore it has to be avoided that criminal profits are re-invested in the legitimate economy.

Confiscation results in The Netherlands 2018: Euro 171 million. Goal for 2018: Euro 160. 5 million.

Confiscation results in The Netherlands PPO not completely satisfied: too dependent on the big ‘hits’, such as ING. Top 3 highest amounts (in Euro): -100 million ING settlement; - 3 million cash that was seized has been confiscated by the court; - 2, 2 million settlement with a shipping company for beaching a ship (in India).

Confiscation results in The Netherlands As from 2019 more focus on illegal profits and the flow of the money. To do for PPO: -commence more confiscation procedures and achieve more and higher confiscation orders. -invest and cooperate in international networks like Carin.

Confiscation results in The Netherlands Value of the seized assets in the beginning of 2019: Euro 1, 863, 000. -

Being creative Investigating authorities have to pay (more) attention during a search to exclusive clothes, watches and designer items. Auction of seized exclusive designer items in September 2019: Handbags, shoes and clothes from designer labels such as Chanel, Gucci or Louboutin. Result: Euro 232, 000