Introduction

The common approach to fight crime is to collect evidence, charge the defendant in a criminal trial and, if proven guilty, to impose criminal sanctions such as fines or imprisonment. Most legal systems also provide for the possibility to confiscate the proceeds of crime following a criminal conviction. As organised crime has evolved, attempts have been made by governments and international institutions to fight it through this traditional criminal law approach. In order to be better able to obtain a criminal conviction of organised criminals, the criminalisation of money laundering is perhaps the most known measure. However, the common experience in most legal systems is that the criminalisation of money laundering has not been an effective measure to fight organised crime; criminal convictions are almost absent.¹ Efforts to improve the system have also been made as regards confiscation rules, i.a. the introduction of statutory presumptions and reversed burden of proof. But as long as a criminal conviction is required to confiscate, these measures are as well insufficient.²

The reason why the traditional criminal law approach has proven insufficient, lies in the very nature of organised crime. Organised criminals use their power and intelligence to keep themselves distant from the crimes they are controlling and they are able to mask the criminal origin of their assets. For this reason it has become extremely difficult to carry out successful criminal investigations leading to the prosecution and conviction of such individuals. The result is that finances derived from crime are often effectively out of reach of the law and are available to be used to finance more crime and acquire more economic power. If this spiral is not interrupted, it will damage the public confidence in the rule of law and provide harmful role models.³ In the long term organised crime will disrupt the credibility and predictability of the economic system⁴ and vital government institutions,⁵ and, thus, shake the very foundations of society.

In addition to attacking organised crime trough the traditional criminal law approach, a number of alternative approaches have been launched. A first is the administrative law approach. Perhaps the most prominent example is the U.S. government´s use of tax legislation to attack the criminal organisation of Al Capone.⁶ With the introduction of the Proceeds of Crime Act (POCA) in 2002, the United Kingdom has taken tax legislation into use to fight organised crime.⁷

A second measure against organised crime is the mobilisation of the private sector through the preventive approach. On the European level the Third Money Laundering Directive serves as a good example.⁸ The directive imposes duties on the financial sector and a vast number of private businesses (for example lawyers and real estate agents) to carry out customer due dilligence, to investigate customers and clients if suspicion of money laundering or terrorist financing arises, and to report the suspicion to the authorities. But as long as the authorities only have traditional criminal law measures at hand when it comes to following up on suspicious transactions, the information received from the private sector often has limited impact.

A third way to combat organised crime is through the civil litigation approach, which is especially used to recover corruptly acquired assets from politicians who have looted their country and placed money abroad, so called «regime change lawsuits».⁹ The civil litigation approach is in princple the same process that would be used by private citizens or corprate entities with a claim against each other, in the context of i.a. fraud, by a liquidator seeking to recover assets wrongfully diverted from an insolvent company.¹⁰ The use of civil proceedings to fight organised crime is recognised in the United Nations Convention against Corruption (UNCAC) Article 53.¹¹

A fourth tool in combating organised crime is the civil asset forfeiture regime. The purpose of this article is to look deeper into the civil asset forfeiture approach on tackling organised crime. Firstly, it will be outlined what civil asset forfeiture is by doing a survey into two operative civil asset forfeiture models (sections 2 and 3). Secondly, it will be dicussed to what extent civil asset forfeiture might be introduced on the European level (4). Thirdly, some conlusions will be drawn (5).

The U.S. Model

The notion civil asset forfeiture is strange to most civil law systems, but it is well known and has deep historical roots in common law.¹² Building on ancient English common law, the First United States Congress, in 1789, enacted statutes which allowed the government to forfeit property by filing a civil lawsuit against the property itself, rather than by filing an action - civil or criminal - against the property owner. In other words, the government could proceed against the property without having to wait until the owner was identified, apprehended and convicted. The notion was that the property itself was the offender. Frequently, in cases involving smuggling, piracy and slave trafficking, the ship or its cargo was found within the jurisdiction of the U.S, but the property owner either remained abroad or could not be found at all.¹³ Thus, designing a measure to attack the property was the only way to tackle this types of crime.

In the 1980´s the organised crime wave evolving from drug crimes, first and foremost represented by the Medellin- and Cali cartels, hit the U.S.¹⁴ This led, among other measures, to the resurrection of the old English common law notion of civil asset forfeiture. Instead of ships, the objects were now houses, businesses and bank accounts.¹⁵

The current U.S. civil asset forfeiture regime is entirely independent of and wholly unaffected by any criminal proceeding. Thus, an aquittal in a criminal case does not bar civil forfeiture proceedings.¹⁶ Statutes permitting civil forfeiture are spread in numerous acts and it has to be decided in each case whether the law allows civil forfeiture proceedings. In practice, civil forfeiture proceedings are allowed in a vast number of cases.¹⁷

U.S. federal law has two forms of forfeiture regimes not requiring a criminal conviction of the offender to forfeit property. The first is administrative forfeiture. Basically, an administrative forfeiture begins when a federal law enforcement agency seizes property discovered in the course of an investigation. The seizure must be based on probable cause to believe that the property is subject to forfeiture. As a main rule the seizure has to be done pursuant to a judicial warrant, but there are numerous exceptions. In practice, it is fair to say that administrative forfeiture entails forfeiture of property without formal court action.¹⁸ Once the property has been seized, the agency commences the administrative forfeiture proceeding by sending notice of its intent to forfeit to anyone with potential interest in contesting that action and by publishing a notice in the newspaper. If nobody contests the forfeiture by filing a claim within the prescribed time limit, the agency concludes the matter by entering a declaration of forfeiture that has the same force and effect as a judicial order.¹⁹ In the U.S. 80 percent of all seizures for forfeiture are uncontested. In 2006, the US. Department of Justice forfeited $ 1,2 billions and 38 percent came from uncontested civil cases ($ 456 millions). The other numbers were 29 percent from contested civil cases (§ 348 millions) and 33 percent from criminal cases (§ 400 millions). ²⁰

If someone does file a claim contesting the administrative forfeiture, the government have two options, being criminal forfeiture through securing a criminal conviction (traditional criminal law approach) or civil asset forfeiture. The civil forfeiture proceedings begins with the government filing a verified complaint alleging that the property is subject to forfeiture, and that claimants are required to file claims to the property and to answer the forfeiture complaint within a certain period of time. Thereafter the case is prepared for trial by civil courts through civil procedure. During trial the government bears the burden of establishing the forfeitability of the property by a balance of probablities. Even if if the government succeeds in establishing a nexus between the property and an offence, the case is not over. To protect the interests of truly innocent property owners who were unaware that their property was being used for illegal purpose, or who took all responsable steps under the circumstances to prevent it, the «uniform innocent owner defense» is available. Under this statute, a person contesting the forfeiture must establish his ownership interests and his inncence on a balance of probabilities. If such a plea is not successful, the court will enter judgment for the government and title to the property will pass to the U.S.²¹

The U.K. Model

In the United Kingdom, the modern concept of civil asset forfeiture (civil recovery) was introduced by the Proceeds of Crime Act (POCA) in 2002. It has been said that this part of the act was the most significant and innovative aspect of the law, but also the most controversial.²² Like in the U.S, civil asset forfeiture (civil recovery) is directed against property and not a person, it operates totally independent from criminal proceedings, and an acquittal in criminal proceedings is no bar to the bringing of civil recovery proceedings.²³ All property obtained through unlawful conduct, except cash, might be object for civil recovery, irrespective of what sort of crime it stems.²⁴

POCA allows two types of civil recovery; the High Court procedure and the cash seizure and forfeiture procedure. The enforcement authority in the High Court procedure is the Seriuos Organised Crime Agency (SOCA). In practice, the recovery process starts off with an ex parte application for a freezing order prohibiting use or disposal of assets before the formal civil recovery process commences.²⁵ If successful, SOCA launches a claim, proving on the balance of probabilities that the property is obtained by criminal conduct.²⁶ The claim is sent to the High Court, which is a civil court. SOCA is obliged to serve the claim on the respondent «wherever domiciled, resident or present».²⁷ A respondent who absconds would not usually result in any delay in the proceedings as long as he was served with the relevant pleadings, and judgment can be entered against the respondent in his absence.²⁸

If the High Court finds, on the balance of probabilities, that the property is obtained by criminal conduct and recoverable, it makes a recovery order vesting the property in a «trustee for civil recovery». The trustee is a suitably qualified person nominated by SOCA. There are two exceptions for the court not to issue a recovery order. Firstly, the order may not contain any provision affecting the property if it is incompatible with the Human Rights Act 1998. Secondly, the court has discretion not to include recoverable property if it would not be just equitable to do so and if various conditions regarding aquisition in good faith are satisfied.²⁹

The second type of civil recovery - the cash seizure and forfeiture procedure - allows the authorities, firstly, to seize and forfeit cash which is being imported into or exported from the United Kingdom, and which is related to all forms of unlawful conduct. Secondly, the authorities may provide for the seizure of such cash «found at any place in the United Kingdom» regardless of its geographical provenance or destination. The conditions in both situations are that the cash is either «recoverable property» or was «intended for use by any person in unlawful conduct». The seizure may be uphold without a trial for up to two years. The Magistrates Court decides on the matter of forfeiture.³⁰

Exploring the Possibilities for an European Model of Civil Asset Forfeiture

Introduction

A substantial civil asset forfeiture model on the EU-level will most likely be developed trough the principle of mutual recognition and harmonisation of substantial law. The principle of mutual recognition and harmonisation are intrinsically connected; to promote mutual recognition a certain level of harmonisation will be helpful, and to achieve harmonisation, mutual recognition might be the first step on the way.³¹ As we will see in the next section, in the case of civil asset forfeiture, the latter seems to be the appropriate way.

A first important organisatorial step towards closer cooperation in the field of asset forfeiture in the EU has already been taken. A Council Decision from 2007 obliges member states to set up or designate national Asset Recovery Offices (ARO).³² These offices will function as national central contact points «which faciliate, through enhanced cooperation, the fastest possible EU-wide tracing of assets derived from crime. The decision allows the AROs to exchange information and best practices, both upon request and spontaneously, regardless of their status (administrative, law enforcement or judicial authority)».³³ The implementation deadline set by the Commission is 2014.³⁴

Before we approach the European Union level, some remarks are appropriate on the status of civil asset forfeiture at the international global and national level. The first legal instrument worth mentioning at the international global level is the UNCAC Art. 54 (1) (c), which directs States Parties to consider taking measures to permit confiscation «without a criminal conviction, in cases in which the offender cannot be prosecuted by reason of death, flight or in other appropriate cases». This statement reflects the growing number of jurisdictions in which forfeiture can be ordered in the absence of a criminal conviction. With this endorsement, the UNCAC for the first time in the text of a global criminal law convention, acknowledges the importance of non-conviction based forfeiture to the recovery of criminal proceeds.³⁵

In UNCAC Art. 54 (1) (a), which regards international cooperation for purposes of forfeiture, States Parties are obliged to enable domestic authorities to recognise and act on «an order of confiscation issued by a court of another State Party». Art. 54 (1) (b) sets out an obligation «to permit its competent authorities, where they have jurisdiction, to order the confiscation of such property of foreign origin». These passages are broadly worded and will most likely encompass civil asset forfeiture measures.³⁶ In addition, UNCAC Art. 43 requires States Parties to consider assisting each other in investigations of and proceedings in civil and administrative matters related to corruption. This would include civil asset forfeiture proceedings and adresses the problem encountered in the past, whereby states could provide legal assistance and cooperation in criminal matters, but not in civil cases.³⁷

Secondly, the 3rd of the Financial Action Task Force (FATF)´s 40 Recommendations³⁸ states that countries «may consider adopting measures that allow such proceeds or instrumentalities to be confiscated without requiring a criminal conviction... to the extent that such a requirement is consistent with the principles of their domestic law». This is clearly a reference to civil asset forfeiture. FATF is perhaps the most influential international organisation in the field of combating money laundering and terrorist financing. The UN Security Council in Resolution 1617 «(s)trongly urges all Member States to implement the comprehensive, international standards embodied in the Financial Action Task Force’s (FATF) Forty Recommendations on Money Laundering and the FATF Nine Special Recommendations on Terrorist Financing».³⁹ EU is a member of FATF.

Thirdly, the G8-Countries best Practice Principles on Tracing, Freezing and Confiscation of Assets para. 26 gives the following advice: «Where they have not already done so, States are encouraged to examine the possibility to extend, to the extent consistent with the fundamental principles of their domestic law, confiscation by: permitting the forfeiture of property in the absence of a criminal conviction; requiring that the lawful origin of alleged proceeds of crime or other property be demonstrated by the claimant.»

On the national level, we have seen that civil asset forfeiture regimes are operative in the U.S. and U.K. In addition, civil asset forfeiture is found in numerous common law jurisdictions around the world, for example Australia, five Canadian provinces, Ireland, South Africa and a number of Caribbean jurisdictions.⁴⁰ On the European continent, Bulgaria, Italy, Serbia and Slovenia have civil asset forfeiture laws.⁴¹

Mutual Recognition of Civil Asset Forfeiture Orders

As we already have seen, UNCAC Art. 54 (1) (b) taken in combination with Art. 54 (1) (c) do most likely oblige the ratifying States to recognise a civil asset forfeiture order from another jurisdiction in cases concerning corruption, even if the requested State does not have an operative civil asset forfeiture regime. But there are no treaty obligations which requires states to recognise civil asset forfeiture orders from other states in general, not linked to the specific offence of corruption.

Thus, the EU will probably be the first international body to introduce legislation to faciliate mutual recognition of civil asset forfeiture orders between jurisdictions in general terms. In the Communication «The EU Internal Security Strategy in Action: Five steps towards a more secure Europe» from the Commission to the European Parliament and the Council, the Commission reveals that it will propose such legislation in 2011.⁴² It is to be expected that the legislation will take the form of a relatively detailed directive, and that an autonomous notion of civil asset forfeiture will be carved out. A common understanding of what civil asset forfeiture amounts to on the European level is essential to make such legislation practical and effective.

Investigating the Possibilities for Introducing Substantial Rules on Civil Asset Forfeiture

Introduction

The question in this section is whether it is recommendable to introduce substantial EU-legislation on civil asset forfeiture. In the Communication «Proceeds of organised crime: Ensuring that ‘crime does not pay’» from the Commission to the European Parliament and the Council,⁴³ the Commission indicates that this is a current topic. In addition to a recasting of the existing legal framework on forfeiture, the Commission states that, among other topics, «(c)onfiscation without a criminal conviction (civil confiscation)» could be considered for discussion:

«Under most MS jurisdictions confiscation is a sanction linked to a criminal conviction. However, a new legal instrument could introduce instances where confiscation takes place without a prior criminal conviction (thereby transposing FATF Recommendation 3 into EU legislation). For example:

• When there is a suspicion that assets are the proceeds of serious crimes, due to their disproportion with the declared income of their owner and to the fact that he/she has habitual contacts with known criminals. In this instance a case may be brought before a civil court (which may order the confiscation of assets) based on an assumption, on the balance of probabilities, that the assets may be derived from proceeds of crime. In these cases the burden of proof is reversed and the alleged criminal should prove the legitimate origin of the assets.

• When the person suspected of certain serious crimes is dead, fugitive for a certain period of time or otherwise not available for prosecution.

• In certain cases, when cash is seized by customs authorities in breach of the EC Regulation on Cash Controls. An administrative decision may empower authorities to detain the amounts above EUR 10 000 which were not declared when entering or leaving the EU. However, if these amounts need to be confiscated (for example as the proceeds from tax evasion) a court order is ultimately needed. As tax evasion is not prosecuted in all EU MS with criminal proceedings, this may be a further case of civil confiscation.»⁴⁴

An ongoing research project at the Max-Planck-Institute of Foreign and International Criminal Law, Freiburg im Breisgau, Germany, focuses on the questions 1) whether, 2) to what extent and 3) how it might be recommendable to introduce substantial rules of civil asset forfeiture on the EU-level.

Advantages

An introduction of a civil asset forfeiture model at the EU-level would undoubtedly offer some significant advantages. A very current example of the benefits civil asset forfeiture may offer is the challenges that fallen (and falling) dictators in Arabic countries represent to Europe. Today, billions of Euros belonging to these persons are frozen all across Europe. It is an unacceptable situation for a country adhering to the rule of law not to be able to repatriate frozen money which appears to have been looted from a whole population. As regards dictators in office, it goes without saying that acquiring a forfeiture of the property placed in Europe through a criminal conviction in the country of the dictator concerned in practice is impossible. Obtaining a criminal conviction in Europe will in most cases be impossible as well; it is enough to mention problems gathering evidence to fulfil the burden of proof required in the European Convention on Human Rights (ECHR) Art. 6 No. 2 («beyond reasonable doubt»)⁴⁵ and the limitations on judgments in absentia in the ECHR Art. 6 No. 1.⁴⁶

The case of the «failing State»⁴⁷ could as well represent a problem in aquiring a criminal conviction of a political leader no longer in office. The essential problem will often be to establish an independent and impartial tribunal in the country where the political leader, perhaps for decades, has had control over all government branches. The other side of the coin is the problem of inagurating former strong system opponents as prosecutors and judges. Failures on this point have the potential to underpin the effect of a criminal conviction on the forfeiture and recovery stage. A lawyer in Europe successfully arguing that a criminal conviction against a former leader was not impartial and independent in terms of ECHR Art. 6 No. 1 will effectively bar the use of the conviction of the former leader in recovery proceedings. An operative civil asset forfeiture regime in the European countries where the leader has placed his property solves these problems: the property will be forfeitable without a criminal conviction.

In less prominent cases as well, civil asset forfeiture proceedings offer advantages compared to criminal forfeiture requiring a criminal conviction. Criminal trials are often made impossible when a suspected criminal is fugitive, dead or dies before conviction or if he is immune from criminal prosecution. The case might also be that the offender is unknown and assets are found (for example, assets found in the hands of a courier who is not involved in the commission of the criminal offense). If assets are derived from crime, an owner or violator may be unwilling to come forward and defend himself in civil recovery proceedings for fear that this would lead to a criminal prosecution. Another example is where the relevant property is held by a third party who has not been charged with a criminal offense but is aware - or is wilfully blind to the fact - that the property is tainted. While traditional criminal forfeiture may not reach property held by bona fide third parties, civil asset forfeiture makes it possible to forfeit the property from a third party without a bona fide defense.⁴⁸

As mentioned, the European standard of evidence to convict in a criminal case is very high («beyond reasonable doubt»). Civil asset forfeiture, however, is not a criminal punishment (at least sensu stricto). As we have seen in the U.S and U.K models of civil asset forfeiture, the facts have only to be established on a balance of probablities. In addition, as civil asset forfeiture focuses on the link between property and criminal conduct, it is not necessary to prove a nexus between the property and a person having comitted crime. This is perhaps the greatest advantage of the civil asset forfeiture regime and makes it a very useful tool to fight organised crime. Very often investigations of organised criminals end up at the gates of tax havens where secrecy laws make it impossible to get access to information on which physical persons are hiding behind complex company schemes. It is evident that the possibility to consentrate on property situated in Europe often will be the only way to tackle the protection that tax haven legislation offers.

Another pre about the U.S.- and U.K. models are that a civil asset forfeiture case is totally independent of any criminal case. In these jurisdictions it is allowed to proceed with a civil asset forfeiture case if the defendant is acquitted in criminal proceedings. It has also been advocated that civil asset forfeiture law can be made retrospective⁴⁹ and, thus, can be used to recover proceeds that were acquired before the law came into force and that civil asset forfeiture proceedings is less time-consuming than criminal trials.⁵⁰

Challenges

To investigate which challenges a European civil asset forfeiture model might represent, it is necessary to outline some contours of such a model. Based i.a. on. the U.S. and U.K. models presented above, the following common denominators surface: Civil asset forfeiture is an action against the asset itself and not against an individual. It is a totally separate action from any criminal proceeding. The essential substantial question is whether it can be established a nexus between the property and criminal conduct. The authorities has the burden of proof and the link between the property and crime has to be established on the balance of probabilities. Because the action is not against an individual defendant but against the property, the owner of the property is a third party having the right to defend the property. If such a third party appears and is able - on the balance of probabilities - to establish ownership of the property and that he was in good faith as regards the link between the property and crime, forfeiture is not executed. If the third party does not succeed, the property will be forfeited. An independent and impartial court decides on the matter.

An European model of civil asset forfeiture will meet at least three challenges. The first focal question is whether such a civil asset forfeiture model will be considered as a «criminal» measure in terms of the ECHR Art. 6. If answered in the positive, several problems may arise. Firstly, it has to be decided whether the burden of proof («balance of brobabilities» and not «beyond reasonable doubt») is compatible with the preumption of innocence in ECHR Art. 6 No. 2. A second question is whether the reversed burden of proof for the third party claiming rights to the property is in accordance with the same Article. A third question would be how the requirement for the third party to speak and produce evidence should be considered in light of the right to remain silent and not to incriminate himself, which is encompassed in ECHR Art. 6 No. 1.⁵¹ A fourth area of potential conflict would be the the possibility to launch a civil asset forfeiture procedure after a final acquittal in a criminal case. ECHR Protocol 7 Art. 4 contains a prohibition on double jeopardy (ne bis in idem) and the notion of what constitutes a «criminal» case in the Article is to be understood mainly in the same terms as in Article 6.⁵² Last, but not least; if the civil asset forfeiture system is regarded as a criminal measure in terms of ECHR Art. 7, the prohibition on retrospectivity will apply. The notion of «criminal» in Art. 7 is identical with that in Art. 6.⁵³

According to well established case law, the European Court of Human Rights (ECtHR) sets out three criteria to be considered in the assessment of whether a measure is to be regarded as «criminal» in terms of Art. 6. These are: the claasification of the measure in national law, the nature of the offence and the severity of the sanction. The second and third criteria are alternative; it is enough that the offense in question by its nature is to be regarded as criminal.⁵⁴ Even though the ECtHR on a genereal level holds that a measure might be considered as «criminal» if the sanction is severe and the nature of the offence is not criminal it has, to my knowldge, never happened. IThe reason is most likely that it is a contradiction in terms to conclude that a measure is not criminal in nature but nevertheless «criminal».

As a possible EU civil asset forfeiture system would be classified as civil and operate totally separated from criminal proceedings, the decisive question will be whether the ECtHR finds that civil asset forfeiture is criminal in nature. When analysing this matter, the Court turns the focus on how the government has reasoned when introducing the measure. If the government has given persuasive reasons for not placing the measure in the criminal sphere, the general impression of the Courts case law is that the choice is respected.⁵⁵ This leads us to a crucial question: What is the aim and purpose of a civil asset forfeiture system?

The ECtHR has touched upon the question in relation to ECHR Art. 7 in an admissibility decision,⁵⁶ but has not yet had the possibility to scrutinise in depth a true civil asset forfeiture model as described above.

The question has been vividly debated among commentators.⁵⁷ Young poses the question «whether civil forfeiture is really ‘criminal forfeiture dressed up in sheep´s clothing’».⁵⁸ A common criticism is that civil asset forfeiture acheives the same objectives as criminal forfeiture but without the procedural safeguards and human rights protections which apply to criminal proceedings.⁵⁹ Smith/Owen finds that «(t)here is no doubt that the consequence of both criminal confiscation and civil recovery is to circumvent (the) staple aspects of due process protection in the criminal law».⁶⁰

Turning to formal authorities, the first test of the purpose of a civil asset forfeiture system was done by the Irish Supreme Court in 2001.⁶¹ The Irish civil asset forfeiture system has the same main characteristics as the system outlined above.⁶² The defendants alleged that the civil asset forfeiture system formed part of criminal law and not civil law. Thus, they had been deprived of some of the most important safeguards which were historically a feature of criminal law, like the standard of proof-requirement in criminal cases, the presumption of innocence and the double jeopardy protection. Art. 38 of the Irish Constitution states that «No person shall be tried on any criminal charge save in the due course of law». The Supreme Court concluded that the purpose of the civil asset forfeiture system was not to punish, reasoning i.a. that «there is no provision for the arrest or detention of any person, for the admission of persons to bail, for the imprisonment of a person in default of payment of a penalty, for a form of criminal trial initiated by summons or indictment, for the recording of a conviction in any form or for the entering of a nolle prosequi at any stage».⁶³

In 2005, the Court of Appeal of Northern Ireland concluded that the U.K. civil asset forfeiture model did not amount to a criminal charge in terms of ECHR Art. 6,⁶⁴ reasoning i.a. that «the essence of art 6 in its criminal dimension is the charging of a person with a criminal offence for the purpose of securing a conviction with a view to exposing that person to criminal sanction. These proceedings are obviously and significantly different from that type of application. They are not directed towards him in the sense that they seek to inflict punishment beyond the recovery of assets that do not lawfully belong to him. As such, while they will obviously have an impact on the appellant, these are predominantly proceedings in rem. They are designed to recover the proceeds of crime, rather than to establish, in the context of criminal proceedings, guilt of specific offences».⁶⁵

In contrast, the U.S. Supreme Court has concluded that the federal civil asset forfeiture legislation had to be regarded «in part» as a punishment in relation to the Excessive Fines Clause in the Eight Amendment of the Constitution.⁶⁶ On the other hand - after considerable twists and turns - the Supreme Court has held that civil asset forfeiture neither amounts to a punishment nor is a criminal sanction in relation to the double jeopardy clause in the Fifth Amendment. However, several State Supreme Courts have held that civil asset forfeiture laws are punitive and violate the double jeopardy clause.⁶⁷

Based on this short survey, two conclusions can be drawn. Firstly, it is not clear whether a EU civil asset forfeiture model containing the elements described above will be considered as «criminal» in terms of the ECHR. If such a model is considered as «criminal» it is, however, not sure that all procedural guarantees in Art. 6 will apply with full force. There are some judgments from the ECtHR suggesting that the guarantees may be relativised in appropriate circumstances, especially in «quasi criminal» cases.⁶⁸

Secondly, even though the ECtHR executes an objective and independent evaluation of the aim and purpose of a measure presented by the government, it has an impact on the Court´s scrutiny how the legislator describes the aim and purpose of the civil asset forfeiture system. There are several possibilities: One is that it is necessary to remove criminal tainted property from circulation in legal channels to prevent the disruption of the credibility and predictablitiy of the economic system. It is open to discussion whether this line of reasoning completely removes civil asset forfeiture from the «criminal» or «sanction» realm. Another way of looking at civil asset forfeiture would be as a proprietary remedy. In U.S. v. Ursery, Justice Stevens explained the proprietary angle in the following terms: «Those funds are the proceeds of unlawful activity. They are not property that the respondents have any right to retain. The forfeiture of such proceeds, like the confiscation of money stolen from a bank, does not punish respondents because it extracts no price in liberty or lawfully derived property from them. I agree that the forfeiture of such proceeds is not punitive...».⁶⁹ This line of reasoning rests on the logic that the holder of criminally tainted property cannot rightfully be owned by a private person, and, that such property belongs to the state.⁷⁰

The second challenge for an European civil asset forfeiture model lies on a more (practical-)philosophical level: Is it recommendable to rely on the construction that the property itself is a wrongdoer? The construction may be vital to regard civil asset forfeiture proceedings as totally independent of any criminal proceedings against a person. The quality and logic of the construction has been intensively debated in several U.S. Supreme Court cases.⁷¹

The third main challenge will be how to carve out a civil asset forfeiture model which is fair, practical and adaptable in all 27 EU member states. It is not possible to face this challenge in its full extent within the frames of this article. However, some preliminary remarks are possible. First and foremost, a civil asset forfeiture system should be limited to cases of organised crime. Secondly, it might be in the interest of justice to limit the possibilties for administrative authorities to forfeit property without the scrutiny of an independent and impartial tribunal. In addition, the funding of the civil asset forfeiture-authorities should not be linked to the amounts of property forfeited. Much of the critisism launched by U.S. commentators on the civil asset forfeiture system can be traced back to the lack of judicial control on the federal administrative authorities´competence to execute administrative forfeiture and how civil asset forfeiture-authorities are funded.⁷² Thirdly, a civil asset forfeiture system should not be used as a means to circumvent the guaranteees which is afforded in the European criminal procedural systems.

Conclusion

The first step towards an European civil asset forfeiture model will be taken this year when the European Commission proposes legislation that facilitates mutual recognition of civil asset forfeiture orders between the EU member states. The next step is to develop substantial EU-legislation on civil asset forfeiture. The Commission has already signalised that such legislation could be considered for discussion. As we have seen, there are clear provisions in important international global legal instruments directing authorities to consider implementing civil asset forfeiture legislation. By 2011 it is common knowledge that fighting organised crime at the national level alone is impossible. EU-legislation in this field has a clear added value over national action and will be legitimate and credible.⁷³ We also know that the European Union measures up to establish a common area of freedom, security and justice.⁷⁴ Thus, it lies in the hands of the European Union to develop a EU-model of civil asset forfeiture.

A civil asset forfeiture model on the EU-level will offer significant advantages in fighting organised crime. However, it is evident that the introduction of such a model will meet (at least) three focal challenges. The recipe for success is being able to strike a fair balance between adopting practical and effective rules to fight organised crime on the one hand and protecting the rights of individuals on the other. The ongoing research project at the Max-Planck Institute of Foreign and International Criminal Law aims to contribute. The project will be completed in 2012.