New EU Legislation to Target Criminal Money; Simplify Recovery and Confiscation

Published: 15 December 2023

EU Flags BrusselsThe new EU law will also target oligarchs avoiding EU sanctions and companies profiting from illegal activities. (Photo: Kyle Wagaman, Flickr, License)

By Erika Di Benedetto

The European Union (EU) announced on Tuesday that it is mandating all EU member states to enhance rules related to asset recovery and the confiscation of illicit funds, estimated by Europol to reach at least 139 billion euros (US$152.815 billion) annually in earnings for criminal organizations.

“The gains from criminal activities are staggering. Only if governments have the means to claw back these profits do they stand a chance of fighting organized crime,” said Spanish Minister for Justice Félix Bolaños.

The new legislation will provide EU member states with a minimum set of rules to adhere to concerning the freezing, tracing, identification, confiscation, and management of funds derived from criminal activities. It will encompass a range of crimes such as terrorism, organized crime, drug and human trafficking, and will also allow for the confiscation of “unexplained wealth.”

The EU stipulated that member states must establish "asset recovery offices" equipped with better-trained personnel in asset recovery and confiscation, along with appropriate technology tools and resources for investigations.

Furthermore, the directive urges EU governments to grant these asset recovery offices access to national data and registers.

Under the new legislation, asset recovery offices will have the authority to confiscate funds from criminal activities on behalf of another EU country.

Confiscation of illegal assets will be possible even if criminals transfer them to a "third party," provided the "third party" knew or should have known the origin of the funds was illicit.

Companies involved in concealing illegal assets or supporting efforts to evade sanctions and profiting from such activities will also face asset confiscation, similar to traffickers and criminal syndicates.

Additionally, in certain cases, confiscated funds may be used to compensate victims of criminal activities.

Once the legislation receives approval from both the Council and the Parliament of the European Union, it will be published in the Official Journal. It is expected to be in force 20 days after publication, likely next year, and EU countries will have 30 months to implement it into their national laws.