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The European Commission announced major new powers today that criminalize sanctions violations and give EU police agencies more authority to freeze the assets of organized crime gangs across the bloc.
Significantly, the new powers will allow non-criminal conviction-based confiscation powers to be used to seize assets from criminals in cases where a criminal conviction could not be obtained.
The measures will allow police forces across Europe to seize "unexplained wealth linked to criminal activities" if officers can prove to a court that the frozen assets are related to criminal activity and that the "value of property is substantially disproportionate to the lawful income of the owner."
The legislation, according to Home Affairs Commissioner Ylva Johansson, will allow investigators to go after Europe's transnational crime gangs, such as the Dublin and Dubai Kinahan Organised Crime Group (OCG), which were recently sanctioned by the US government.
She told reporters, "it’s a real new tool to after the highest bosses in these multinational organised crime groups."
The proposed new Directive, which must be mandated by the European Council of Governments and the European Parliament, had two main parts:
- Taking on the EU's Russia sanctions evaders and making their actions illega
- Using enhanced asset seizure laws to combat Europe's major international crime gangs
The Commission said in a statement that while Russia's aggression against Ukraine continues, it is "paramount that EU restrictive measures are fully implemented and the violation of those measures must not be allowed to pay off."
The proposals announced today are aimed at ensuring that sanctioned individuals and entities' assets can be "effectively confiscated" in the future.
The Commission has proposed that violating EU sanctions be added to the list of EU crimes, claiming that this will "allow to set a common basic standard on criminal offences and penalties across the EU."
In all EU Member States, common rules would make it "easier to investigate, prosecute, and punish violations of restrictive measures."
According to the Commission, sanction violations are a particularly serious crime because they can "perpetuate threats to international peace and security" and have a clear cross-border context, necessitating a "uniform response" at the EU and global levels.
The proposed new Criminal Sanctions Directive would cover criminal offenses such as:
- Taking actions or engaging in activities that seek to circumvent sanctions directly or indirectly, such as hiding assets,
- Failure to freeze funds that belong to, are held by, or are controlled by a sanctioned person or entity
- Engaging in trade in goods that are subject to trade restrictions
The Commission has also proposed a Directive on asset recovery and confiscation, with the goal of ensuring "that crime does not pay by depriving criminals of their ill-gotten gains and limiting their capacity to commit further crimes."
The Commission has proposed that the Asset Recovery Offices' mandate be extended, that the criteria for asset confiscation be expanded to include a broader range of crimes, and that an asset management office be established in each EU Member State.
Didier Reynders, the EU's Justice Commissioner, stated that the EU "must ensure that persons or companies that bypass the EU restrictive measures are held to account."
"Such action is a criminal offence that should be sanctioned firmly throughout the EU… We need to close the loopholes and provide judicial authorities with the right tools to prosecute violations of Union restrictive measures ," he said.
"Crime bosses use intimidation and fear to buy silence and loyalty," Commissioner Johansson continued. "But usually their greed means embrace of a rich lifestyle. That always leaves a trail."
"The European Commission is proposing new tools to fight organised crime by following this trail of assets."
"This proposal allows Asset Recovery officers to trace and freeze: trace where the assets are and issue an urgent freezing order. The tracing allows assets to be found and the urgent freezing gives time for courts to act," she added.
By fLEXI tEAM