Criminal asset recovery – legal frameworkConfiscation – legal framework
Describe the legal framework in relation to confiscation of the proceeds of crime, including how the benefit figure is calculated.
Legislation prescribes certain rules on tracing assets that have derived from committing a criminal offence.
The Law on Confiscation of Assets Derived by Criminal Offence (Official Herald of RS, Nos. 32/2013, 94/2016 and 35/2019) prescribes the rules and conditions, procedures and the authorities responsible for detection, seizure and management of assets of natural and legal persons that derive from committing a criminal offence.
The benefit figure is calculated according to an expert report during the criminal case. This figure is used in the process of confiscation.
The Criminal Code (Official Herald of RS, Nos. 85/2005, 88/2005 – correction No. 107/2005 – correction Nos. 72/2009, 111/2009, 121/2012, 104/2013, 108/2014, 94/2016 and 35/2019) also prescribes rules on the confiscation of objects and seizure of property gained by committing a criminal offence.
Article 87 of the Criminal Code regulates the security measure of the confiscation of objects and prescribes that objects used or intended to be used for the commission of a criminal offence, or objects arising from a criminal offence, may be confiscated in criminal proceedings, as well as objects when there is a danger that the object will be reused for the commission of a crime, when it is necessary to protect the public safety, or for moral reasons.
In respect of the seizure of property gained by a criminal offence, the Criminal Code prescribes in article 92 that any property gained by committing a criminal offence shall be confiscated from the offender. Under the court’s decision, property gained by committing a criminal offence, such as money, things of value and any other property, shall be confiscated from the offender to the amount of the profit acquired by a criminal offence as determined in a criminal proceeding.
If in criminal proceedings a claim on the property of the victim is determined, the court shall order the confiscation of property gained through a criminal offence only if it exceeds the amount of the property claim awarded to the victim.
Under the Criminal Procedure Code, property gained by the commission of a criminal offence shall be determined in the criminal proceedings ex officio. The court is obliged to determine the amount of property gained by the criminal offence. To that end, the court has to present all the necessary evidence in a criminal proceeding.
The court is entitled by the provisions of the Criminal Procedure Code to determine temporary measures in a criminal proceeding under the provisions of the Law on Enforcement and Security, to secure the claim of the victim and the collection of property gained during the criminal offence.
Criminal asset recovery – confiscationSecondary proceeds
Is confiscation of secondary proceeds possible?
Confiscation of secondary proceeds is certainly possible and very often is in practice. In such a case, the defendant must prove that this property has no legitimate link to a criminal act.Third-party ownership
Is it possible to confiscate property acquired by a third party or close relatives?
Confiscation is permitted from a third party, provided that the assets to be confiscated are obtained directly from an offence. Otherwise, this kind of request can be successfully challenged by a third party.Expenses
Can the costs of tracing and confiscating assets be recovered by a relevant state agency?
The cost of tracing and confiscating assets is the state’s responsibility until the end of the case. In the final and binding court decision after sentencing and fining, the court will determine the resolution cost. The defendant must pay the cost. If the defendant refuses to pay court costs, a state agency will have the right to recover the cost from confiscated assets according to the enforcement law.Value-based confiscation
Is value-based confiscation allowed? If yes, how is the value assessment made?
Value-based confiscation is permitted if the assets subject to confiscation are no longer available. In such a case, the court may uphold a claim for compensation by the state in respect of a sum of equivalent value. The amount of compensation must be equivalent to the value of the assets, were the assets still available for confiscation.Burden of proof
On whom is the burden of proof in a procedure to confiscate the proceeds of crime? Can the burden be reversed?
When the prosecutor initiates an official investigation proceeding, he or she immediately orders the Financial Investigation Unit to investigate the financial aspects of a specific criminal offence and all assets of a suspect. The prosecutor then delivers an order on the confiscation of those assets that have been found. When the court receives the prosecutor’s order, a hearing is scheduled in which the defendant explains and proves whether those assets have any connection with the crime. The burden of proof is with the defendant.Using confiscated property to settle claims
May confiscated property be used in satisfaction of civil claims for damages or compensation from a claim arising from the conviction?
The state has precedence over payment collection. Should any assets remain, they can be partly used in satisfaction of civil claims for damages, or compensation from a claim arising from the conviction.Confiscation of profits
Is it possible to recover the financial advantage or profit obtained through the commission of criminal offences?
It is possible to recover the financial advantage or profit obtained through the commission of criminal offences as part of the court judgment in a criminal procedure.Non-conviction based forfeiture
Can the proceeds of crime be confiscated without a conviction? Describe how the system works and any legal challenges to in rem confiscation.
Without a conviction, assets cannot be confiscated (ie, should the suspect be released or should the prosecutor abandon the criminal prosecution, the assets should be returned). They (eg, money and weapons of unknown origin, jewellery and works of art without a certificate of origin and similar) will not be returned even though no conviction has taken place, then the burden of proof will be on the suspect to prove the legality of those funds.Management of assets
After the seizure of the assets, how are they managed, and by whom? How does the managing authority deal with the hidden cost of management of the assets? Can the assets be utilised by the managing authority or a government agency as their own?
Under the law, the state established the Directorate for the Management of Seized Assets Directorate (the Directorate), which is part of the Ministry of Justice.
The Directorate acts on and undertakes the following actions prescribed by the Law on Confiscation of Assets:
- manages temporarily and permanently assets seized after a criminal offence, temporarily seized assets under the order of the Public Prosecutor’s Office in investigatory proceedings, objects used in committing an offence and that derived from committing a criminal offence, and assets gained by a criminal offence;
- assesses seized assets derived from criminal offences;
- stores, keeps and sells temporarily seized assets, and manages funds gained;
- keeps records on seized assets; and
- provides international legal assistance.
The Directorate usually covers its costs by renting or leasing seized assets as it collects the monthly rent.