The new EU directive on Confiscation : a good (even if still prudent) starting point for the post-Lisbon EU strategy on tracking and confiscating illicit money

(Original version : italian)

by Gabriella Arcifa

Foreword

According to UN estimates the total amount of criminal proceeds generated in 2009 is around $2.1 trillion; however less than 1% of it are frozen and confiscated, proving that dirty money remains in the criminals’ pockets. In a globalized financial world, money laundering is an essential element of facilitate corruption, organized crime, and terrorism, and affect competition with law abiding economy. Tracking and recovering illicit money has then become since the ’90 a political priority at international level. Since then the international acquis is growing steadily. Suffice to remember :

a) the 1990 Council of Europe Convention on laundering, search, seizure and confiscation of the proceeds from crime, of 1990,

b) the 2000 UN Convention against Transnational Organised Crime ;

c) the 2003 United Nations Convention against Corruption (Articles 52-59, which to date has been ratified by the European Union and 23 Member States),

d) the 2008 Council of Europe Convention on laundering, search, seizure and confiscation of the proceeds of crime and on the financing of terrorism (CETS 198), (to date signed by 19 EU Member States and the European Union, and ratified by 11 Member States)

d) the 2010 OECD Financial Action Task Force (FATF) recommendations on Confiscation and Asset recovery (Recommendations 3, 4 and 38)

At European Union level, after the adoption in 1999 of the Tampere European Council Conclusions, a first legislative text on confiscation has been adopted on July 2001: the Framework Decision 2001/500/JHA However it soon appeared soon ineffective because of the MS too wide marge of discretion. It was then soon replaced by the Framework Decision 2005/212/JHAof 24 February 2005 on Confiscation of Crime-Related Proceeds, Instrumentalities and Property and by the Framework Decision 2006/783/JHA on mutual recognition of the confiscation orders. Again, even these texts didn’t reach their objective because of the persisting substantial differences among the MS’ legislation so that there was an high number of decisions opposing the confiscation orders issued by another EU MS[i]. To overcome these problems in 2008 the Commission proposed a more ambitious strategy with its Communication “Proceeds of organised crime – Ensuring that ‘crime does no pay’ (COM(2008) 766 final).

However it is only after the entry into force of the Lisbon Treaty and the adoption of the Stockholm Program by the European Council on December 10 2009 that it has been possible to adopt at qualified majority this kind of measures by paving the way to more ambitious common standards.

The new strategy has been endorsed by the 2010 Council Conclusions on Confiscation and Asset Recovery which made reference also to not-conviction-based confiscation procedures[ii] and in the Commission 2010 Communication The EU Internal Security Strategy in Action[iii]” as well as in the 2011 “anti-corruption package” submitted to the European Parliament and the Council in 2011.

Since then tracking the illicit money has become the common objective of several EU legislative measures recently examined by the European Parliament and dealing with

– the protection of EU financial interests

-,the revision of the anti-money laundering directive and the exchange of information linked with the transfer of funds

– the freezing and confiscation of criminal assets.

The new Directive on Confiscation

On March 14 the EU Council of Ministers has adopted the new directive on the freezing and confiscation of the proceeds of crime in the EU (only Poland voted against and UK and DK did’nt take part to the vote. The text was agreed with the European Parliament which adopted its position on February 25 (only EFD group voted against – see here).The agreement has been welcomed by many but concerns have also been raised (for instance by the European Criminal Bar Association – ECBA) which has considered that the new legislation could have an impact on protection of fundamental rights and against the proportionality principle.

The legal basis of the new Directive are art. 82.2 and 83 p. 1 of the TFUE so that it defines the minimum rules to be applied in the EU MS when “..freezing property with a view of possible later confiscation and confiscation of property, recommending general principles for the management and disposal of the confiscation objects[iv].

The new directive has at least the merit to establish a clearer legal framework which can strengthen the judicial cooperation between the EU MS. That having been said it is worth noting that the initial scope of the draft Directive as submitted by the Commission has been significantly reduced during the negotiations between the European Parliament and the Council.

To better understand the dynamics of the interinstitutional negotiation in the following paragraphs the initial negotiation mandate adopted by the Parliamentary Committee (draft report A7-0178/2013 ) is juxtaposed with the final text as adopted by the Plenary (and by the Council). The following aspects require a particular attention :

– the scope

– the definition of proceeds and instrumentalities related to the criminal offence;

– the regime of confiscation;

– the eligibility and the meaning of the “extended confiscation powers”

– the conditions to admit a confiscation from a third party;

Continue reading “The new EU directive on Confiscation : a good (even if still prudent) starting point for the post-Lisbon EU strategy on tracking and confiscating illicit money”

EP STUDY : NATIONAL CONSTITUTIONAL AVENUES FOR FURTHER EU INTEGRATION

This study was requested by the European Parliament’s Committees on Legal Affairs and on Constitutional Affairs. It investigates national constitutional limits to further EU integration and explores ways to overcome them. It includes an in-depth examination of the constitutional systems of 12 Member States (Croatia, the Czech Republic, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, the Netherlands, Poland, and the United Kingdom) and a bird’s eye view of all Member States. EU integration can be advanced by avoiding substantive constitutional obstacles in various ways. Overcoming the substantive obstacles requires managing national procedural constitutional hurdles. This is possible to the extent that the required broad political consensus exists.

AUTHOR(S) : Mr Leonard F.M. BESSELINK, Mrs Monica CLAES, Mrs Šejla IMAMOVIû, Mr Jan Herman REESTMAN.
This document is available on the Internet

EXECUTIVE SUMMARY

1. The central research question of this study is whether, and to what extent, national constitutions provide guidance for further European integration and reversely how the latter can take place in full respect for national constitutional identities.

2. The research involved an in-depth analysis of a representative selection of Member States: Croatia, the Czech Republic, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, the Netherlands, Poland, and the UK; and a bird’s eye view of all Member States. The study conducts a cross-national comparative analysis of the national constitutional approaches to EU integration, on the basis of which some final conclusions are offered.

3. This study deals with the relationship between the EU and national constitutions mainly from a national perspective. But there is also another side of the story, taking the EU perspective.
The EU Treaties (TEU and TFEU) acknowledge the central role of national constitutions, for instance when they require ratification by all the Member States ‘in accordance with their respective constitutional requirements’ for their entry into force, for their amendment and for the accession of new Member States. This presumably implies more than a mere procedural rule and acknowledges that the Treaties should also substantively be in accordance with national constitutions, or at least, it grants the Member States the opportunity, if their constitution so requires, to ensure that they do not enter into Treaties which would be unconstitutional.
On a more general level, the EU expects its Member States to comply with the common fundamental constitutional values that all Member States share, and which also apply to the European Union (Arts. 2 and 7 TEU). More specifically with respect to fundamental rights protection, the Treaty, the EU Charter of Fundamental Rights and the CJEU case law explicitly seek to connect EU human rights to the common constitutional traditions of the Member States. Yet, under the Treaties, the EU is not only bound to respect the common constitutional values of the Member States.
In addition, Article 4(2) TEU obliges the Union to respect ‘their national identities, inherent in their fundamental structures, political and constitutional, inclusive of regional and local self-government’.
Accordingly, if the Union should fail to respect these national identities as inherent in their fundamental constitutional and political structures, it would infringe not only those identities, but also the Treaty obligation to respect them. Whether this is indeed the case is, as a matter of EU law, to be decided ultimately by the Court of Justice of the Union, and not unilaterally by the Member States.
In addition, the Union must, under Article 4(2) TEU, respect the Member States’ essential State functions, including ensuring the territorial integrity of the State, maintaining law and order and safeguarding national security. In particular, national security remains the sole responsibility of each Member State.
The Treaty thus recognises that there are ‘essential State functions’ which remain with the Member States and which the EU must respect.
What exactly these functions are is not clear, beyond those mentioned in the provision.
On the other hand, and despite the central role of national constitutions in the EU constitutional edifice, Member States cannot invoke their national constitutions to escape compliance with EU law before the Court of Justice of the European Union. And even before national courts, national constitutional law should not, as a matter of EU law, take priority over conflicting provisions of national law.
Indeed, the principle of primacy of EU law,1 which is firmly settled in the case law of the CJEU, and has been confirmed in Declaration 17 annexed to the TEU, applies to national constitutional law as well. With respect to fundamental rights, more specifically, Article 53 of the Charter does not lead to a different conclusion.

4. Turning the perspective to national constitutions, it can be said that, in general, constitutions generally perform the four main functions of
* constituting the polity, which may be understood as expressing the basic social contract;
* organising and structuring the exercise of public authority and dividing powers between the various branches;
* limiting the exercise of public authority, which also includes fundamental rights protection of individuals and
* expressing common values of society and/or carrying its ‘national identity’.

As power-organizing tools, two of the main functions of constitutions go in different directions.
One is the enabling function of constitutions: constitutions constitute the institutions which are to exercise public authority and empower these institutions.
A second function is associated with ‘constitutionalism’ in a narrow sense and concerns the limiting function of constitutions: constitutions limit the exercise of public authority, for instance via human rights and a division of powers.
These different functions of a constitution are also reflected with regard to EU integration: national constitutions help to enable, and limit.

5. In the context of participation in the EU, the enabling function of constitutions is illustrated by those constitutional provisions which allow for a ‘limitation of sovereignty’ or a ‘transfer of sovereign powers’ to the EU.
However, national constitutions not only enable, but also set limits to further EU integration.
Membership of the European Union challenges the national constitutions in various ways: powers, which under the constitution have been attributed to national bodies, are transferred to the EU, and hence they are exercised differently from the way it was intended under the national constitution.
The EU is, as such, not bound by those national constitutions, but does indeed require the Member States to apply EU law even if it should infringe the national constitution.
Accordingly, the supremacy of the Constitution itself is challenged.
Seen in this light, it should come as no surprise that many Member States, while having adapted their constitutions to allow for membership and facilitate it, have at the same time retained constitutional limits and reservations, and impose conditions on EU law.
Moreover, constitutions are not only often considered to be expressions of the will of the people to form a polity (political autonomy) and to be governed under the constitution, but many constitutions also legally and judicially protect this foundational will.
This may take different forms, for instance by protecting the sovereignty of the state, statehood itself or the national nature of democracy, or a combination of these.

6. To put the constitutional obstacles to further EU integration in proper perspective, the report draws two main distinctions.
The first concerns a distinction between further integration under the current EU treaty framework and further integration by means of new (EU amendment) treaties.
The second distinction is that between substantive and procedural constitutional obstacles.
Generally, the substantive constitutional obstacles can be overcome by the adoption of a treaty (amendment), by the adoption of a constitutional amendment or by a combination of both.
For the adoption of such amendments, national procedural constitutional hurdles have to be taken.
Continue reading “EP STUDY : NATIONAL CONSTITUTIONAL AVENUES FOR FURTHER EU INTEGRATION”

Steve PEERS: The CJEU secures asylum seekers’ right to family housing

Published on EU LAW ANALYSIS Thursday, 27 February 2014

The CJEU secures asylum seekers’ right to family housing

 

What obligations do Member States have to ensure that asylum-seeking families are housed adequately? The Court of Justice of the European Union (CJEU) has today usefully clarified the minimum standards which Member States must observe on this issue, in Case C-79/13 Saciri. Its judgment is a welcome confirmation that whatever the practical difficulties facing Member States in managing their reception for asylum-seekers, families cannot simply be left homeless or forced to live in grossly inadequate conditions by means of the refusal of support for financial assistance to obtain housing.

Judgment

The case concerns a family of asylum-seekers (two parents and three children) who needed accommodation in Belgium while their asylum application was being considered. The Belgian agency responsible for reception of asylum-seekers replied that it could not provide reception, and referred them to the social assistance agency. Since the Saciri family could not pay the rent being charged for private properties, they asked the social assistance agency for financial support.

But there was a ‘Catch-22’: the agency refused to give them support, since the family was not living in accommodation provided for by the reception agency – even though the reception agency had told them that it could not help them. A lower court in Belgium ruled that the reception agency had to pay them financial support, and that agency appealed to the referring court, which asked the CJEU questions about the EU’s first-phase reception conditions Directive.

First of all, the CJEU pointed out that the Directive allows for support for asylum-seekers either in kind (ie providing housing directly) or by providing financial allowances. Then it confirmed its prior case law (Case C-179/11 Cimade and GISTI) to the effect that benefits must be provided as soon as the asylum application is made, in particular in light of the right to human dignity set out in the EU Charter of Fundamental Rights.

Next, as for the amount of the financial allowances, regardless of how the aid is provided, the Directive states that it must ensure a dignified standard of living for applicants’ health, as well as subsistence. Member States must also, according to the Directive, take account of those with special needs (including minors), entailing q requirement to preserve family unity as well as the best interests of the child. The CJEU confirmed that these principles meant that applicants must be able to obtain housing on the private market if necessary, although this did not mean that asylum-seekers could make their own choice of housing.

The CJEU then ruled that, although the specific rules in the Directive relating to housing only apply where the housing is provided in kind by Member States, it still followed that any allowances provided to assist with housing had to ensure the unity of the family.

Finally, the Court ruled that where accommodation facilities are overloaded, it was open to Member States to refer asylum-seekers to the authorities responsible for public assistance, provided that the latter authorities ensure that the minimum standards in the Directive are met.

The Court concluded by noting that ‘saturation of the reception networks [is not] a justification for any derogation from meeting’ the standards in the Directive.

Comments

The CJEU’s judgment neatly addresses the ‘Catch-22’ created by national law, which to some extent reflects the structure of the Directive. On the one hand, the Directive lays out general rules on reception support, but then on the other hand, it only lays out detailed rules as regards housing where the State provides such housing in kind. What if the State does not, or cannot, provide for housing in kind?

The Court’s answer to this question takes account of the definition of ‘material reception conditions’ in the Directive, which expressly includes ‘housing’. So it logically follows that such material support must include assistance to obtain housing, where no housing is provided for in kind.

Moreover, it is expressly clear from the Court’s judgment that a family of asylum-seekers is entitled to support to obtain family housing on the private market, although the Court does recognise that the asylum-seekers do not have a fully free choice of where they may be housed. This necessarily means that, if there is no publicly-provided accommodation available, the authorities must ensure that a family of asylum-seekers has enough support to afford to rent a property at market rates, which is big enough to house their family in dignity. But the house need not be palatial. Probably this means that a family of five cannot demand enough financial support to rent a four-bedroom house; but neither can they all be expected to sleep on the same sofa.

The Court’s answer to these questions was not affected by the overloading of the Member State’s reception system. This had practical consequences, in that asylum-seekers can be referred to the social assistance agency instead of the reception agency, and be provided with a financial allowance instead of housing in kind. But the basic obligation to provide enough assistance to ensure a minimum dignified level of accommodation, including family unity, cannot be derogated from.

Finally, it should be noted that the judgment takes a stronger approach to family unity than the wording of the Directive, which states only that family unity shall be ensured ‘as far as possible’, and only where Member States provide for accommodation in kind. The Court’s judgment means instead that families of asylum-seekers must be able to live together in all cases, if necessary in private accommodation, even if this means some additional cost or administrative inconvenience for Member States. This can only be welcomed, as it is an essential step to ensure the protection of the family life of some of the most vulnerable people in the European Union.