Author: Tina Popović (ID Vijesti)
Deleting the possibility of confiscating assets from family members of the perpetrator, introducing a six-month deadline during which the financial investigation must be completed, and reducing the time frame during which the prosecutor must submit a request for the permanent confiscation of the proceeds of crime could enable criminal structures to hide or alienate assets.
This is stated in the remarks of the Network for Affirmation of NGO Sector (MANS) on the Draft Law on Amendments to the Law on Seizure and Confiscation of Material Benefit Derived from Criminal Activity.
The draft law was published by the Ministry of Justice, while the department headed by Andrej Milović did not answer the questions of “Vijesti” regarding who and from which institutions was in the Working Group that wrote that document.
Vanja Ćalović Marković
The Executive Director of MANS, Vanja Ćalović Marković, warns in her remarks that the Draft deletes the possibility of confiscating assets from family members of the perpetrator, and that they are treated as third parties, where there is an obligation of the State Prosecutor’s Office to prove that the assets registered in their name is in real property of the accused person.
“This may include complicated financial investigations and analysis of transactions and ownership structures, which further strains resources of the State Prosecutor’s Office. In addition, there is a risk that such an approach will enable the perpetrators to more effectively hide the material benefit derived from criminal activity, transferring assets to family members or using complex legal and financial arrangements to conceal the real ownership”, Ćalović Marković stated in the remarks submitted to the Ministry of Justice.
THE PROSECUTOR MUST NOT BE THE MAIN ACTOR IN FINANCIAL INVESTIGATIONS AS WELL
The draft stipulates that the police can, instead of being obliged, to take the necessary measures to detect and identify the material benefit derived from criminal activity on their own initiative or at the request of the state prosecutor.
“Without a clearly defined duty to take measures to identify material benefit derived from criminal activity, there is a risk of uneven practice and the possibility for some cases to remain uninvestigated,” the Director of MANS warned.
The draft also foresees that other authorities – police, military police, administrative authorities responsible for tax affairs, customs and prevention of money laundering and financing of terrorism… can no longer propose the forming of a financial investigation team, as provided for by the current Law, however, it can, but does not have to, be done only by the state prosecutor.
“First, the state prosecutor is placed in the position of the main actor in deciding on initiating of complex financial investigations. While the prosecutor already has a key role in the prosecution of criminal acts, this kind of centralization can result in a delay in the decision-making process in situations where a quick reaction is crucial… Second, the multidisciplinary approach to investigation of financial crime is reduced. Financial investigation teams, which include experts from various fields, are key to effective addressing the complex cases of financial crime that often cross the boundaries of a single jurisdiction or area of expertise. Limiting the possibility to form such teams at the suggestion of various authorities may reduce the ability of the system to respond quickly and efficiently to the challenges posed by financial crime. Third, this kind of change can put an additional burden on the State Prosecutor’s Office, which already bears a heavy burden in the process of investigating and prosecuting crime,” Ćalović Marković specifies.
LEGAL UNCERTAINTY DUE TO SHORT DEADLINES
According to the Director of MANS, the introduction of a deadline within which the financial investigation must be completed could cause more negative outcomes.
“First of all, superficiality in investigations – the deadline can force prosecutors to rush the completion of investigations in order to meet the legal deadline, which can lead to less thorough investigations and lower quality of evidence. Then there is a suspension of investigations – in cases where it is evident that the investigation cannot be completed within six months, there is a risk that the investigations will be suspended or disregarded. This could allow individuals who benefitted from criminal activity to keep their assets without fear of legal repercussions. Financial investigations that require international cooperation can be particularly challenging to complete in a short time frame. “Strict deadlines can lead to a legal uncertainty and the perception of inequality before the law, especially if deadlines are applied selectively or if investigations are stopped due to technical obstacles, and not due to lack of evidence”, Ćalović Marković states.
She emphasizes that the deadline of only eight days is too short for the State Prosecutor’s Office to submit a reasoned proposal for determining the temporary security measure that the prosecutor adopted by order, or that measure would be abolished.
“This may jeopardize the fundamental purpose of these measures, which is to prevent suspects from managing their assets that could be subject to confiscation at a later stage of the proceedings. The State Prosecutor’s Office faces limited resources and a heavy caseload, which makes it challenging to respond quickly within such a short time frame. In practice, this means that prosecutors must quickly gather and present detailed evidence and arguments in support of a request for interim measures, which can be difficult to do without compromising the quality of the proposed measures. If the State Prosecutor’s Office fails to submit a reasoned proposal within the eight-day deadline, there is a risk that the temporary security measure will be revoked. This would open up the possibility for suspects to alienate or conceal their assets, which significantly reduces the chance of its subsequent confiscation”, Ćalović Marković says.
Current Law stipulates that temporary security measure determined in the investigation is abolished ex officio if the indictment does not enter into legal force within two years from the date of the decision on its determination. The decision from the Draft, according to which in such cases a proposal for establishing such a measure in relation to the same assets cannot be submitted again, is a particularly problematic solution due to the well-known issues related to untimely work of the courts.
“In practice, this could lead to the alienation of the assets during court proceedings and prevent its permanent confiscation even in cases where the person is convicted. If the assets that is the subject of a temporary security measure is alienated in the period after the lifting of the temporary measure and before the filing of a new indictment, or during court proceedings, that may seriously jeopardize the state’s ability to permanently confiscate assets derived from criminal activity. Such a situation opens the door for abuses, where individuals can take advantage of legal loopholes and technical issues within the judicial system to protect the assets derived from illegal activities,” Ćalović Marković assesses.
FEW PROSECUTORS, COMPLICATED INVESTIGATIONS
The deadline of up to six months in which the prosecutor must submit a request for permanent confiscation of material benefit prescribed by the draft law is four times shorter than the current legal solution, which provides for two years.
“Taking into account the limited capacities of the State Prosecutor’s Office and the complexity of investigations related to confiscation of assets, as stated in previous comments, we believe that prescribing such a short deadline can in practice make it impossible to confiscate valuable assets. It is especially problematic in cases where criminal proceedings cannot be continued due to reasons such as death, illness, exile, immunity, amnesty or pardoning the perpetrator. These cases represent challenges for the justice system and require additional time to adapt and find alternative legal solutions…”, the Director of MANS emphasizes.
