Over the past two decades the confiscation of assets has become one of the most effective (and politically successful) tools to tackle profit-based crime. With several jurisdictions across the world implementing this measure within their legislations (often under the influence of international and supranational legal instruments), the emergence of confiscation as an instrument to recover instrumentalities and proceeds of crime has grown to become a global phenomenon. Arguably, the priority given to the introduction (or reform) of confiscation regimes is part of a wider policy trend inspired by a ‘follow-the-money’ approach to crime.
In this context, the emphasis is increasingly placed on the profits deriving from an offence, rather than on the individual who allegedly committed the offence. Besides being presented as a more effective deterrent against certain forms of crime, the establishment of asset confiscation regimes is also credibly motivated by the need to prevent the re-investment of illicit capitals into new criminal activities and obtaining a reimbursement of the costs incurred by law enforcement agencies in the fight against crime.
The emergence of non-conviction based confiscation
Driven by this renewed interest in the recovery and management of criminal assets, several countries have come to develop and experiment with new forms of confiscation. Traditionally, the imposition of a confiscation order has only been possible if such measure was attached to a previous conviction handed down in the context of a criminal proceeding. Recent developments in domestic and international law, however, reveal the tendency to develop legislative schemes allowing for confiscation without a prior conviction by a criminal court. Such forms of confiscation usually apply to proceeds linked to one or more offences for which the sentencing judge has not pronounced a final conviction during a criminal proceeding (e.g. due to the inability of the defendant to stand trial). Alternatively, analogous forms of asset forfeiture may take place in the context of civil or administrative procedures.
Yet this innovative approach to fighting profit-based crime has proven contentious, raising questions as to its compliance with human rights law. One of the most debatable issues, in this context, lies with the qualification of this form of confiscation as a full-fledged criminal sanction. Acknowledging the criminal nature of confiscation orders, even in the absence of a previous conviction, would indeed amount to requiring the respect of the full set of principles and safeguards applicable to criminal cases.
The case law of the ECtHR on matters of confiscation
The recent ruling delivered by the Grand Chamber of the ECtHR (G.I.E.M. and others v. Italy) offers valuable indications to assess the legitimacy of this controversial confiscation regime. The Court's decision is extremely relevant in that it corrects some of its previous findings on this issue, paving the way for a larger use of confiscation orders in the absence of a prior conviction. The applicants in the case at hand complained that the imposition of an order to confiscate their lands, due to unlawful site development, had breached several Convention's rights and in particular those protected by Articles 6 (right to a fair trial), 7 (no punishment without law) as well as Article 1 of Protocol no. 1 to the ECHR (right to property).
Under the Italian construction act, the development of a site, which is incompatible with (or is carried out in the absence of) a planning permission or regulation, is a punishable criminal offence. Article 44 of the same act requires sentencing courts to order the confiscation of the unlawfully developed land and the illegally erected buildings. However, the national case law has long considered this measure “a mandatory administrative sanction”: this meant that a confiscation order could be issued even if the perpetrator had been acquitted on the grounds of a lack of any mental element (mens rea).
What is more, being allegedly independent from the outcomes of the criminal proceeding, this form of confiscation was routinely imposed in the absence of a prior conviction – to the point that it could even be ordered when the offence was already time-barred. In the present case, the Court of Strasbourg reiterates the view (expressed in previous judgments) that such confiscation should be regarded as a ‘penalty’ within the meaning of Article 7 of the Convention, in spite of the fact that no criminal conviction has been imposed on the applicants. Such conclusion stems from the implementation of what are commonly referred to as Engel criteria, namely the guidelines developed by the Court of Strasbourg to ascertain whether a sanction, without being formally defined as criminal, can nonetheless be regarded as substantially punitive for the purposes of the Convention.
In the Court's view, the punitive nature of the confiscation orders in the case at hand is demonstrated by the fact that, under Italian law, their imposition derives automatically by the unlawful nature of the construction, not being subject to the proof of a situation of actual danger or of concrete risk for the environment. In addition, in spite of its administrative nature, the measure is ordered by a criminal court at the end of a criminal proceeding.
The conclusion that a confiscation measure amounts to “criminal penalty” within the meaning of Article 7 ECHR triggers the obligation for the respondent State to respect the safeguards enshrined by the Convention in criminal matters. By way of example, in a previous judgment, the Court found that imposing a confiscation order despite the decision to acquit the applicant for lack of mens rea violated Article 7 (see Sud Fondi v. Italy). As confirmed by the decision in the case G.I.E.M., the Court supports an interpretation of this article whereby, in order for a punishment to be legally inflicted, “an element of liability may be detected in the conduct of the person who physically committed the offence”. By the same token, in the recent Varvara case, the Court concluded that confiscating a defendant's assets in the absence of “a finding of liability by the national courts” would violate the principle of legality under Article 7 ECHR. This latter decision has been widely interpreted as requiring the confiscation order to be based on a formal declaration of criminal liability (or verdict of guilt).
The notion of “prior conviction”: form or substance?
The obligation to ground the adoption of such measures on a prior (and formal) conviction, however, has been vividly criticised, sparking a judicial dialogue with the Italian Constitutional Court. In a decision delivered in 2015, the Italian judges have suggested that, while referring to the term “conviction”, the ECtHR did not have in mind “the form of the ruling by a sentencing court” (or a formal declaration of guilt) but rather a more generic “finding of responsibility”. This solution would have allowed a less restrictive interpretation of the Convention's safeguards, thereby shielding the domestic practice of imposing confiscation orders for offences that are already time-barred. In fact, although such orders are formally embedded within an acquittal decision, they require the sentencing court to provide adequate grounds for establishing the personal responsibility of the person subject to the confiscation order.
The reasoning of the Italian Constitutional Court summarised above seems to have been incorporated within the latest findings of the ECtHR's jurisprudence. In G.I.E.M., the Court has conceded that while “the declaration of criminal liability is often made in a criminal-court judgment formally convicting the defendant, this should not be seen as a mandatory rule. The Court therefore departs from the idea that a formal declaration of guilt must always be necessary to inflict a criminal punishment and accepts that a simple declaration of liability may in substance be sufficient.
To reach this conclusion, the decision in G.I.E.M. refers to the “importance of upholding the rule of law and public trust in the justice system”. In this connection, the ECtHR observes that in the case at hand the national rules allowing for confiscation in the absence of a formal declaration of guilt sought to prevent the impunity caused by the “combined effect of complex offences and relatively short limitation periods”.
While these conclusions seem to uphold the use of non-conviction based confiscation as a far-reaching tool to fight against certain forms of crime, one might fear that they may justify a larger restriction of fundamental rights only on the grounds of effectiveness (or “fight against impunity”). It is highly debatable, however, whether this kind of reasoning can be validly relied on to derogate from the Convention's safeguards in criminal matters. After all, as François Tulkens once put it, it is inherent to the obligation of respecting fundamental rights in criminal matters that the State's ability to prevent impunity would suffer limitations.
These considerations would then suggest being more cautious in the interpretation of provisions (such as Article 7 ECHR) that currently restrict a wider use of confiscation in the absence of a prior conviction.