Europe has taken a significant step forward in its efforts to combat organized crime and illicit financial activities with the adoption of a new law focused on asset recovery and confiscation

The European Union, on Friday, officially endorsed legislation that establishes minimum standards across the EU for tracing, identifying, freezing, confiscating, and managing criminal assets associated with a broad spectrum of offenses.

According to the Council of the EU, this directive aims to provide member states with enhanced tools to combat organized crime and its financial gains. The directive mandates that EU countries ensure their authorities are adequately resourced for these endeavors, extending its scope even to violations of sanctions.

Under the new law, member states will be required to enable the freezing of assets and, upon final conviction, the confiscation of proceeds and instrumentalities derived from criminal activities. Moreover, they must adopt measures allowing for the confiscation of assets equivalent in value to the proceeds of a crime.

The legislation also addresses the issue of asset transfers to third parties to evade confiscation. It stipulates that assets or property of equal value, knowingly transferred to third parties for such purposes, can also be confiscated.

Importantly, the directive empowers member states to confiscate unexplained wealth, particularly when associated with criminal organizations and yielding substantial economic benefits.

To bolster cross-border cooperation in asset recovery, the law strengthens asset recovery offices. These offices will collaborate with national authorities and the European Public Prosecutor’s Office (EPPO) in tracing illicit assets. They will be granted access to pertinent databases and registers to facilitate these investigations.

Moreover, member states will designate asset management offices to handle frozen or confiscated assets directly or to provide support to relevant bodies. The legislation also allows for the sale of frozen assets under certain conditions, including perishability, and even prior to final confiscation.

The directive is set to become effective on the twentieth day following its publication in the Official Journal of the EU. Member states will then have 30 months to incorporate its provisions into their national legislation, marking a significant milestone in Europe’s ongoing efforts to combat financial crime and enhance asset recovery mechanisms.

By fLEXI tEAM