On the 14th of June, the Luxembourg parliament adopted the draft bill no 7452 aiming to finalise the transposition of directive no 2014/42/EU of the European Parliament and of the Council on the freezing and confiscation of instrumentalities and proceeds of crime in the European Union (the “Law”).
By means of this directive, the aim of the European Commission is to disrupt the business models of criminals by facilitating the freezing and confiscation of their income and assets and by preventing their laundering and reinvestment in other legal or illegal activities.
The main takeaways of the Law are:
- the creation of an Asset Management and Recovery Office (abbreviated "BGRA") under the administrative supervision of the State Prosecutor, which will be responsible for the management and recovery of the seized assets handed over to it. Furthermore, this office will have the power to carry out investigations into the convicted person's assets as well as the power to manage the confiscated assets, including the ability to sell them in order to avoid any loss of value;
- the transposition of the Council Framework Decision 2007/845/JAI of 6 December 2007 on cooperation between Asset Recovery Offices of the Member States in tracing and identifying proceeds of crime or other crime-related property, designating the BGRA as the national contact point in Luxembourg;
- the adaptation of the provisions of Article 3-6 of the Criminal Code contributing to the right of access to a lawyer for any person having a right to seized property (even if this person is not the presumed victim or the person prosecuted);
- the adaptation of the confiscation regime in order to be able to effectively execute confiscation orders as required by the abovementioned Directive, in order to improve its effectiveness by enabling the detection and tracing of property to be frozen and confiscated, even after a final conviction for a criminal offence. Indeed, suspected or accused persons often hide property throughout the criminal investigations or trial. As a result, confiscation orders cannot be enforced, leaving convicted criminals in a position to benefit from assets derived from their crimes, once they have served their sentence. It is therefore necessary to enable the tracing and assessment of the precise extent of the property to be confiscated, even after a final conviction for a criminal offence. Under current Luxembourg law, there is no such possibility for the authorities to conduct a post-judgment investigation into the convicted person's assets. The new provisions grant these powers to the BGRA.
The creation of the BGRA will have a significant impact on the actual freezing and confiscation regime in Luxembourg, and on the criminal justice system altogether.
In particular, BGRA’s new power to investigate criminal estates post-judgment is likely to enhance the chances of compensation for victims who have suffered losses as a result of criminal activity.