AGRO IN 2001 (Confiscation - Presumption of innocence - National legislation on confiscation without a previous criminal conviction - Opinion) [2019] EUECJ C-234/18

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Komisia za protivodeystvie na koruptsiyata i za otnemane na nezakonno pridobitoto imushtestvo

(Request for a preliminary ruling from the Sofiyski gradski sad (Sofia City Court, Bulgaria))

(Reference for a preliminary ruling — Judicial cooperation in criminal matters — Directive 2014/42/EU — Framework Decision 2005/212/JHA — Articles 2 and 5 — Confiscation — Presumption of innocence —National legislation on confiscation without a previous criminal conviction)

1. In this request for a preliminary ruling from the Sofiyski gradski sad (Sofia City Court, Bulgaria) the Court’s guidance is sought as to how to interpret several provisions of EU law on confiscation of crime-related proceeds, the means by which offences are committed (‘instrumentalities’) (2) and property. The context is confiscation proceedings under national law before a civil court that are unrelated to a criminal conviction and whether such proceedings are compatible with EU law. Answering the referring court requires this Court to address the applicability ratione materiae and ratione temporis of two EU instruments on confiscation, namely Framework Decision 2005/212/JHA and Directive 2014/42/EU, and the relationship between them.

2. Article 31(1)(c) of the Treaty on European Union, in its version applicable when the Framework Decision was adopted, provides that common action on judicial cooperation in criminal matters includes ‘ensuring compatibility in rules applicable in the Member States, as may be necessary to improve such cooperation’. Article 34(2)(b) thereof gives the Council, acting unanimously on the initiative of any Member State or of the Commission, the competence to adopt framework decisions ‘for the purpose of approximation of the laws and regulations of the Member States. Framework decisions shall be binding upon the Member States as to the result to be achieved but shall leave to the national authorities the choice of form and methods. They shall not entail direct effect’.

3. Protocol No 36 organises the transition from the institutional provisions of the Treaties applicable prior to the entry into force of the Treaty of Lisbon to the provisions contained in that Treaty. (3) Article 9 thereof provides that, ‘The legal effects of the acts of the institutions, bodies, offices and agencies of the Union adopted on the basis of the Treaty on European Union prior to the entry into force of the Treaty of Lisbon shall be preserved until those acts are repealed, annulled or amended in implementation of the Treaties …’

5. In accordance with Article 51(1), the provisions of the Charter ‘are addressed to the institutions, bodies, offices and agencies of the Union … and to the Member States only when they are implementing [EU] law’.

6. The following statements are made in the recitals of Framework Decision 2005/212/JHA. The main motive for cross-border organised crime is financial gain. In order to be effective, therefore, any attempt to prevent and combat such crime must focus on tracing, freezing, seizing and confiscating the proceeds from crime. Differences between Member States’ legislation in this area make that difficult. (5) Thus, in the conclusions of the Vienna European Council of December 1998, (6) the European Council called for EU efforts to combat international organised crime to be strengthened in accordance with an action plan on how best to implement the provisions of the Treaty of Amsterdam in the area of freedom, security and justice. (7) However, the existing instruments in this area have not achieved to a sufficient extent effective cross-border cooperation with regard to confiscation as there are still a number of Member States unable to confiscate the proceeds from all offences punishable by deprivation of liberty for more than one year. (8) Thus, the aim of the Framework Decision is to ensure that all Member States have effective rules governing the confiscation of proceeds from crime, inter alia, in relation to the onus of proof regarding the source of assets held by a person convicted of an offence related to organised crime. (9)

7. Article 1, third indent defines ‘instrumentalities’ as ‘any property used or intended to be used, in any manner, wholly or in part, to commit a criminal offence or criminal offences’. The fourth indent thereof defines ‘confiscation’ as ‘a penalty or measure, ordered by a court following proceedings in relation to a criminal offence or criminal offences, resulting in the final deprivation of property’.

8. Article 2(1) provides that ‘Each Member State shall take the necessary measures to enable it to confiscate, either wholly or in part, instrumentalities and proceeds from criminal offences punishable by deprivation of liberty for more than one year, or property the value of which corresponds to such proceeds’. Article 2(2) provides for a specific derogation in relation to ‘tax offences’ (which are not defined): there, Member States ‘may use procedures other than criminal procedures to deprive the perpetrators of the proceeds of the offence’.

9. In accordance with Article 4 ‘Each Member State shall take the necessary measures to ensure that interested parties affected by measures under Articles 2 and 3 have effective legal remedies in order to preserve their rights’.

10. Article 5 states that the Framework Decision ‘shall not have the effect of altering the obligation to respect fundamental rights and fundamental principles, including in particular the presumption of innocence, as enshrined in Article 6 of the Treaty on European Union’.

11. Article 7 required Member States to adopt the necessary measures to comply with the Framework Decision by 15 March 2007.

12. Recital 5 of Directive 2014/42 states that ‘the adoption of minimum rules will approximate the Member States’ freezing and confiscation regimes, thus facilitating mutual trust and effective cross-border cooperation’. Recital 9 indicates that the directive aims to ‘amend and expand the provisions of Framework Decisions 2001/500/JHA and 2005/212/JHA. Those Framework Decisions should be partially replaced for the Member States bound by this Directive’. (10)

13. In accordance with Article 1(1) the directive ‘establishes minimum rules on the freezing of property with a view to possible subsequent confiscation and on the confiscation of property in criminal matters’.

14. Article 2, subparagraph (3), defines ‘instrumentalities’ identically to the definition in Article 1, third indent, of Framework Decision 2005/212/JHA. Subparagraph (4) defines ‘confiscation’ as meaning ‘a final deprivation of property ordered by a court in relation to a criminal offence’.

(a) Convention drawn up on the basis of Article K.3(2)(c) of the Treaty on European Union on the fight against corruption involving officials of the European Communities or officials of the Member States of the European Union …;

(b) Council Framework Decision 2000/383/JHA of 29 May 2000 on increasing protection by criminal penalties and other sanctions against counterfeiting in connection with the introduction of the euro;

(c) Council Framework Decision 2001/413/JHA of 28 May 2001 on combating fraud and counterfeiting on non-cash means of payment;

(d) Council Framework Decision 2001/500/JHA of 26 June 2001 on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime;

(e) Council Framework Decision 2002/475/JHA of 13 June 2002 on combating terrorism;

(f) Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector;

(g) Council Framework Decision 2004/757/JHA of 25 October 2004 laying down minimum provisions on the constituent elements of criminal acts and penalties in the field of illicit drug trafficking;

(h) Council Framework Decision 2008/841/JHA of 24 October 2008 on the fight against organised crime;

(i) Directive 2011/36/EU of the European Parliament and of the Council of 5 April 2011 on preventing and combating trafficking in human beings and protecting its victims, and replacing Council Framework Decision 2002/629/JHA;

(j) Directive 2011/93/EU of the European Parliament and of the Council of 13 December 2011 on combating the sexual abuse and sexual exploitation of children and child pornography, and replacing Council Framework Decision 2004/68/JHA;

(k) Directive 2013/40/EU of the European Parliament and of the Council of 12 August 2013 on attacks against information systems and replacing Council Framework Decision 2005/222/JHA,

as well as other legal instruments if those instruments provide specifically that this Directive applies to the criminal offences harmonised therein.’

16. In accordance with Article 4(1) ‘Member States shall take the necessary measures to enable the confiscation, either in whole or in part, of instrumentalities and proceeds or property the value of which corresponds to such instrumentalities or proceeds, subject to a final conviction for a criminal offence, which may also result from proceedings in absentia’. Article 4(2) provides that ‘where confiscation on the basis of paragraph 1 is not possible, at least where such impossibility is the result of illness or absconding of the suspected or accused person, Member States shall take the necessary measures to enable the confiscation of instrumentalities and proceeds in cases where criminal proceedings have been initiated regarding a criminal offence which is liable to give rise, directly or indirectly, to economic benefit, and such proceedings could have led to a criminal conviction if the suspected or accused person had been able to stand trial’.

17. Article 5 concerns extended confiscation of property belonging to a person convicted of a criminal offence which is liable to give rise, directly or indirectly, to economic benefit, where a court is satisfied that the property in question is derived from criminal conduct. It includes a non-exhaustive list of ‘criminal offences’ to which it should ‘at least’ apply.

18. Article 6(1) provides for confiscation of proceeds, or other property the value of which corresponds to proceeds which were transferred by a suspected or accused person to third parties, or which were acquired by third parties from a suspected or accused person, at least if those third parties knew or ought to have known that the purpose of the transfer or acquisition was to avoid confiscation.

19. Article 8(1) provides that ‘Member States shall take the necessary measures to ensure that the persons affected by the measures provided for under this Directive have the right to an effective remedy and a fair trial in order to uphold their rights’.

20. Article 12 defines the transposition period for complying with the directive as expiring on 4 October 2016.

21. Article 14(1) provides that ‘The first four indents of Article 1 and Article 3 of Framework Decision 2005/212/JHA, are replaced by this Directive for the Member States bound by [it], without prejudice to the obligations of those Member States relating to the time limits for transposition of those Framework Decisions into national law’. Article 14(2) explains that ‘for the Member States bound by this Directive, references to … the provisions of Framework Decisions 2001/500/JHA and 2005/212/JHA referred to in paragraph 1 shall be construed as references to this Directive’.

22. Article 15 states that the directive enters into force on the twentieth day following that of its publication in the Official Journal (29 April 2014). (12)

23. In 2012, Bulgaria adopted the Zakon za otnemane v polza na darzhavata na nezakonno pridobito imushtestvo (Law on the confiscation of illegally obtained assets, ‘the Law of 2012’) which entered into force on 19 November 2012. That law was repealed by the Zakon za protivodeystvie na koruptsiata i za otnemane na nezakonno pridobito imushtestvo (Law on combating corruption and the confiscation of illegally obtained assets), published on 19 January 2018. Pursuant to Paragraph 5(1) of the latter, inquiries and proceedings commenced under the Law of 2012 are to be completed in accordance with that law’s provisions by the Commission for combating corruption and the confiscation of illegally obtained assets (‘the Commission for combating corruption’).

24. Article 1(1) states that the purpose of the law is to prescribe the conditions and procedure for confiscating illegally obtained assets. In accordance with Article 1(2), where no legal source can be identified for the acquisition of assets, such assets are deemed to be illegally obtained assets.

25. Article 5(1) establishes the Commission for combating corruption as an independent, specialised and permanent national authority.

26. Article 2 provides that ‘the proceedings provided for in this Law shall be conducted regardless of any criminal proceedings brought against the person under inquiry and/or persons acting in conjunction with him’.

27. In accordance with Article 21(1) the Commission for the combating of corruption opens proceedings when it has reasonable grounds to suspect that certain assets have been acquired illegally. Article 21(2) provides that reasonable grounds exist when it appears after investigation that there is a substantial difference in terms of the assets held by the persons subject to investigation. Article 22(1) further states that ‘the inquiry provided for in Article 21(2) shall be commenced … in cases where a person is charged with a criminal offence provided for in … Articles 201 to 203 of the Criminal Code’.

28. Article 66(1) and (2) deals with assets transferred to or controlled by legal persons. It provides that ‘assets which the person under inquiry has transferred to a legal person or has deposited into a legal person’s capital in the form of a monetary or other contribution shall be subject to confiscation where the persons managing or controlling the legal person knew, or in the circumstances had reason to suspect, that the assets had been obtained illegally’; and ‘the illegally obtained assets of a legal person controlled by the person under inquiry or by persons acting in conjunction with him shall also be subject to confiscation’.

29. Article 203(1) of the Nakazatelen kodeks (Criminal Code) categorises large-scale embezzlement by an office-holder as particularly serious embezzlement, punishable by deprivation of liberty for 10 to 20 years.

30. On 28 July 2014 the Public Prosecutor’s Office of Sofia reported to the Commission for combating corruption that BP was subject to a preliminary criminal investigation on the ground that, from December 2011 to 19 June 2014, he had, in his capacity as a company officer (chairman of the supervisory board of Korporativna targovska banka AD (‘the Bank’)), (in combination with others) incited persons to embezzle funds belonging to the Bank that had been handed over or entrusted to them for safekeeping or management. The sums amounted to more than BGN 205 million (approximately EUR 105 million). The facts thus suggested that embezzlement had been committed within the meaning of Article 203(1) of the Criminal Code.

31. On 5 August 2014, the Commission for combating corruption launched an inquiry, relating to the period from 4 August 2004 to 4 August 2010, which revealed significant irregularities with respect to the personal assets of BP. In the course of that inquiry, the Commission for combating corruption carried out an analysis of the financial position of, and the transactions concluded by, the defendant commercial companies which were said to have been acting in conjunction with BP, or under his control. That analysis concluded that some transactions had been carried out using illegally obtained resources, whilst others had not actually taken place but had served to conceal assets or resources of unlawful origin; and that the funds came from unsecured loans granted by the Bank which had led to the Bank’s insolvency.

32. On 14 May 2015 the Commission for combating corruption instituted proceedings before the referring court to freeze assets said to have been obtained illegally by BP and various natural and legal persons assumed to be associated with, or controlled by him (‘the freezing request’). On 20 and 28 May 2015, the referring court took measures to freeze the assets confiscation of which is sought.

33. The present proceedings before the referring court, related to the confiscation of the assets said to have been obtained illegally, were introduced on 22 March 2016.

34. Criminal proceedings against BP and other persons were started before the Spetsializiran nakazatelen sad (Specialised Criminal Court, Bulgaria) in 2017 and were still pending at the date of the request for a preliminary ruling.

35. The referring court observes that under the national legislation applicable at the material time, civil proceedings related to the confiscation of assets such as those before it are pursued irrespective of whether the person under inquiry has been convicted by final judgment. It expresses doubts as to the compatibility of that law with the minimum standards for asset confiscation laid down by Directive 2014/42, which provides that confiscation may be effected upon assets that have been obtained by way of a criminal offence for which the offender has been convicted by final judgment.

36. The referring court therefore seeks a preliminary ruling on the following questions:

‘(1) Is Article 1(1) of Directive 2014/42 …, which provides for the establishment of “minimum rules on the freezing of property with a view to possible subsequent confiscation”, to be interpreted as meaning that it permits Member States to adopt provisions on civil-law confiscation that is not based on a conviction?

(2) Does it follow from Article 1(1) of Directive 2014/42 …, taking into account Article 4(1) thereof, that the institution of criminal proceedings against the person whose assets are the subject of confiscation is, of itself, a sufficient basis on which to bring and conclude civil-law confiscation proceedings?

(3) Can the grounds given in Article 4(2) of Directive 2014/42 … be interpreted broadly as permitting civil-law confiscation that is not based on a conviction?

(4) Is Article 5(1) of Directive 2014/42 … to be interpreted as meaning that a right to property may be withdrawn, as having been directly or indirectly obtained by way of a criminal offence, on the sole ground of the discrepancy between the value of a person’s assets and his lawful earnings, in the case where there is no final criminal judgment finding that the person concerned committed the criminal offence in question?

(5) Is the provision contained in Article 6(1) of Directive 2014/42 … to be interpreted as meaning that it provides for confiscation from third parties as an additional or alternative means of direct confiscation or as an additional means of extended confiscation?

(6) Is the provision contained in Article 8(1) of Directive 2014/42 … to be interpreted as meaning that it ensures the application of the presumption of innocence and prohibits confiscation that is not based on a conviction?’

37. Written observations were submitted by the Commission for combating corruption, by BP, AB, PB and Trast B OOD acting together, by Dunarit AD, AGRO IN 2001 EOOD and the Bank, by the Bulgarian, Czech and Irish Governments and by the European Commission. At the hearing of 5 June 2019 the Commission for combating corruption, BP, AB, PB and Trast B OOD, Dunarit AD, the Bank, the Bulgarian and Irish Governments and the Commission presented oral argument.

38. This case presents certain particularities that require the Court to depart from the questions actually addressed to the Court in order to provide the referring court with useful guidance on the issues raised.

39. The questions referred start from the simple premiss that Directive 2014/42 is applicable to the present case. However, it seems to me that further analysis is required in order to establish the applicable EU law ratione temporis and ratione materiae. The relationship between the provisions of that directive and those of Framework Decision 2005/212/JHA also need to be explored.

40. Once I have examined those matters, I shall turn to the essence of the questions referred and shall concentrate (as requested by the Court) on the interpretation of Articles 2 and 5 of Framework Decision 2005/212/JHA.

41. It is for the national court to determine the exact nature of the offences notified by the Public Prosecutor’s Office of Sofia to the Commission for combating corruption that lie at the origin of the present proceedings. That said, it seems to me that embezzlement such as described in the order for reference is not one of the offences falling within the scope of the instruments listed in Article 3 of Directive 2014/42. It follows, as the Bulgarian and Czech Governments submitted, that the subject matter of the national proceedings falls outwith the material scope of Directive 2014/42.

42. In contrast, Framework Decision 2005/212/JHA applies to confiscation of instrumentalities and proceeds from criminal offences punishable by deprivation of liberty for more than a year. It follows that criminal offences such as those in the present case, which are punishable by deprivation of liberty for 10 to 20 years, do fall within the scope of the Framework Decision. That conclusion is without prejudice as to whether or not the proceedings in the present case correspond to ‘confiscation’ within the meaning of Article 1, fourth indent, of that framework decision.

43. In the present case there are two parallel national proceedings. On the one hand, there are criminal proceedings for embezzlement which were brought before the Specialised Criminal Court in 2017 and which were pending at the date of the request for a preliminary ruling. On the other hand, there are proceedings which under national law are classified as civil proceedings and which started with the freezing request on 14 May 2015 and the consequent freezing of the assets said to be illegally obtained by the referring court on 20 and 28 May 2015. Those proceedings continued with the actions seeking the confiscation of those assets introduced by the Commission for combating corruption on 22 March 2016 and are currently pending.

44. The relevant dates are for the referring court to verify, but it seems to me that the period prescribed for implementing Directive 2014/42 expired on 4 October 2016. Is that directive relevant ratione temporis to the present proceedings? Even though the directive does not apply ratione materiae, the issue is important, because the directive replaces certain provisions of the Framework Decision.

45. It is settled case-law that a directive can have direct effect only after the expiry of the time limit laid down for its transposition into national law. (13) Thus, Directive 2014/42 cannot be relied upon before the national courts in respect of proceedings initiated on 22 March 2016, before the period prescribed for its implementation had expired. During that period Member States are, however required to refrain from taking any measures liable seriously to compromise the result prescribed. (14)

46. It follows that the EU instrument relevant to confiscation of crime-related assets applicable at the material time is Framework Decision 2005/212/JHA.

Framework Decision 2005/212/JHA after the entry into force of Directive 2014/42

47. As provided for by Article 9(1) of Protocol No 36 on transitional provisions, Directive 2014/42 amended Framework Decision 2005/212/JHA from the date on which the directive entered into force (20 days after its publication in the Official Journal on 29 April 2014).

48. The scope of the directive is limited to the areas of crime listed in Article 83(1) TFEU. That implies that existing EU provisions on confiscation remain in place in order to maintain a degree of harmonisation with respect to criminal activities falling outwith the scope of Directive 2014/42. Thus, Articles 2, 4 and 5 of Framework Decision 2005/212/JHA remain in force. (15)

49. Specifically, Article 14(1) and (2) of Directive 2014/42 provides that the directive replaces the first four indents of Article 1 and Article 3 of Framework Decision 2005/212/JHA for the Member States it binds and that references to the replaced articles of the Framework Decision ‘shall be construed as references to this directive’.

50. The question then arises: are those provisions to be interpreted as part of the directive or of the Framework Decision?

51. In my view, since those provisions derive from the directive, it is the objectives and the scheme of the directive that should guide their interpretation rather than those of the Framework Decision. That accords with the plain wording of Article 14(2) of the directive. It also respects the need for uniform interpretation of EU law: The same provisions cannot be interpreted differently depending on whether they are read in the context of the directive or in the context of the Framework Decision.

52. In so far as a framework decision has not been ‘repealed, annulled or amended’ in accordance with Article 9 of Protocol No 36 on transitional provisions, it retains its legal character. When an individual provision is amended (or, in the present case, replaced) by a directive it is only the individual legal character of that provision that changes. But amending an individual provision cannot alter the legal nature of the entire legal instrument in which that provision is contained. Rather, what happens here is that the original framework decision becomes a mixed legal instrument containing elements of both framework decision and directive. (16)

53. The particularity of the present case is that the national confiscation proceedings started after the entry into force of the directive (and hence after the text of the Framework Decision had been amended) but before the time limit laid down for its transposition into national law had expired.

54. The provisions of the directive that have replaced the first four indents of Article 1 and Article 3 of Framework Decision 2005/212/JHA therefore cannot be relied upon before national courts before 4 October 2016. Thus, for the purposes of the present case, the Framework Decision remains applicable in its unamended form. However, during the period laid down for transposition into national law, Member States are required to refrain from taking any measures liable seriously to compromise the result prescribed by the provisions of the directive amending the Framework Decision. (17) I recall here that the Pupino case-law, requiring national courts to interpret national law as far as possible in the light of the wording and purpose of the framework decisions in order to attain the result pursued, remains of paramount importance. (18)

55. By its first to fourth questions the referring court asks whether national confiscation proceedings such as those in the present case (which are initiated once criminal proceedings have been commenced but in which confiscation takes place without there having been a conviction) are compatible with various provisions of Directive 2014/42.

56. By its sixth question the referring court raises concerns as to the application of the presumption of innocence, inasmuch as Article 8(1) of Directive 2014/42 precludes confiscation not based on a criminal conviction.

57. I shall examine the issues raised by the referring court in the light of the applicable EU law ratione materiae and ratione temporis, that is to say Framework Decision 2005/212/JHA, and more particularly Articles 2 and 5 thereof (as requested by the Court). I shall not address the referring court’s fifth question, since it is only relevant in the context of Article 6(1) of Directive 2014/42, which is not applicable in the present case.

58. Article 2(1) of Framework Decision 2005/212/JHA introduces the obligation for Member States to take the necessary measures to enable confiscation of instrumentalities and proceeds from criminal offences punishable by deprivation of liberty for more than one year. Confiscation is defined in Article 1, fourth indent, of the Framework Decision as meaning ‘a penalty or measure, ordered by a court following proceedings in relation to a criminal offence or criminal offences, resulting in the final deprivation of property’. (19)

59. Is it possible to interpret those provisions of Framework Decision 2005/212/JHA before its amendment by Directive 2014/42 took full effect as precluding the possibility for Member States to implement a confiscation regime such as the one in the present case where confiscation does not depend on a final criminal conviction?

61. The legal basis of Framework Decision 2005/212/JHA is Title VI of the Treaty on European Union on police and judicial cooperation in criminal matters and more specifically Articles 29, 31(1)(c) and 34(2)(b) thereof. Thus, the purpose of the Framework Decision is to ensure the compatibility of rules applicable to the Member States, to the extent that it is necessary to improve judicial cooperation in criminal matters, by the approximation of their laws and regulations and to ensure that they all have effective rules governing the confiscation of proceeds from crime. (20) Framework Decision 2005/212/JHA is linked to the adoption of Framework Decision 2006/783/JHA on the application of the principle of mutual recognition to confiscation orders, whose objective is to establish the rules under which a Member State shall recognise and execute in its territory a confiscation order issued by a court competent in criminal matters of another Member State. (21)

62. The explanatory note on the initiative by the Kingdom of Denmark for a draft Framework Decision on confiscation of crime-related proceeds, instrumentalities and property presents the proposed framework decision as a ‘horizontal instrument’ to determine unambiguously which obligations are incumbent upon Member States as regards confiscation. (22)

63. It follows from the legal basis, the purpose of the Framework Decision and the context in which it was adopted that it is an instrument (i) relating only to criminal matters; (ii) aiming to ensure compatibility of laws of Member States to the extent necessary for their cooperation, (iii) introducing for Member States the obligation to take the necessary measures to confiscate crime-related instrumentalities and proceeds; and (iv) approximating Member States’ laws in the matters covered, with a view to facilitating mutual recognition to confiscation orders. The concept is one of minimum approximation of laws (‘to the extent necessary for the cooperation’).

64. Under Framework Decision 2005/212/JHA, instrumentalities and proceeds from criminal offences are subject to confiscation (Article 2(1)) ordered by a court following proceedings ‘in relation to a criminal offence or criminal offences’ (Article 1, fourth indent). That definition corresponds to the definition in Article 1(d) of the Council of Europe Convention of 8 November 1990 on laundering, search, seizure and confiscation of the proceeds from crime. (23) It is useful to recall here that the scope of that convention is limited to criminal activity or acts connected to criminal activity. (24) The legal basis, context and wording of the Framework Decision indicate that it should be approached in a similar way.

65. Criminal proceedings are those initiated when the person concerned is made aware that he or she is suspected or accused of having committed a criminal offence and continue until final determination of the question whether that person has committed the offence, including, where applicable, sentencing and the resolution of any appeal. (25)

66. It is apparent that the proceedings in question before the national court are not ‘criminal proceedings’. On the basis of the material before the Court, I have come to the conclusion that they are also not proceedings ‘in relation to a criminal offence or criminal offences’ within the meaning of Article 1, fourth indent, of the Framework Decision.

67. Whilst these are matters for the national court to verify, those proceedings have been described before the Court as civil law proceedings (co-existing with a criminal law confiscation system). They have only one point of contact with criminal proceedings: they are initiated by the national independent authority when it is informed that a person has been charged with a certain criminal offence. Once initiated, the civil proceedings are conducted regardless of the criminal proceedings brought against the person under enquiry (see Article 2 of the Law of 2012). The civil proceedings focus on the assets (not on the person under enquiry). The origin and mode of acquisition of the assets are investigated with a view to determining whether those assets should be frozen and/or in due course confiscated. Confiscation remains unrelated to the outcome of the criminal proceedings. It is not linked to whether a criminal offence is proved against the person under enquiry.

68. I therefore agree with the Commission’s submission at the hearing, that such a confiscation system is outwith the scope of the Framework Decision. I would reach the same conclusion on the basis of the wording of Article 1, fourth indent, of the Framework Decision as amended by Directive 2014/42. Whilst the definition of ‘confiscation’ has been modified, (26) the crucial formula ‘in relation to a criminal offence’ has remained unaltered.

69. I do not think that that conclusion is affected by the fact that Article 2(2) of the Framework Decision provides that Member States may use procedures other than criminal procedures to deprive the perpetrator of tax offences of the proceeds of the offence. (27) The wording of that provision retains a clear link with criminal proceedings (‘perpetrator’ and ‘proceeds of the offence’). It cannot be read as extending the scope of the Framework Decision to confiscation which is not related to criminal proceedings.

70. For the sake of completeness, I merely add that should the main proceedings be considered to be related to criminal proceedings, and thus within the scope of the Framework Decision, there is nothing in that framework decision (as distinct from Directive 2014/42) which makes confiscation dependent upon a final criminal conviction. Article 1, fourth indent, thereof defines confiscation as a ‘penalty or measure, ordered by a court following proceedings in relation to a criminal offence or criminal offences, resulting in the final deprivation of property’. The Framework Decision is silent as to the outcome of the criminal proceedings. It is perfectly true that confiscation within the context of the directive is ‘subject to a final conviction for a criminal offence’ (Article 4(1)). (28) But that article is not one of those which have replaced articles of the Framework Decision.

71. I therefore conclude that Framework Decision 2005/212/JHA does not preclude confiscation proceedings such as those pending before the national court, where those proceedings are not ‘relating to a criminal offence’ and their issue does not depend upon a criminal conviction.

72. Article 5 of Framework Decision 2005/212/JHA reiterates the obligation to respect the presumption of innocence. The presumption of innocence is recognised by Article 48(1) of the Charter.

73. It is settled case-law that the fundamental rights safeguarded in the legal order of the Union must be applied in all situations governed by EU law, but not outside such situations. (29)

74. For the reasons that I have set out above, confiscation proceedings such as those pending before the referring court cannot be considered to be ‘in relation to a criminal offence’ falling within the scope of the Framework Decision. Article 5 of the Framework Decision and Article 48(1) of the Charter are therefore inapplicable in the present case.

75. In the light of all the foregoing considerations, I suggest that the Court should answer the questions raised by the Sofyski Gradski Sad (Sofia City Court, Bulgaria) as follows:

‘Framework Decision 2005/212/JHA of 24 February 2005 on Confiscation of Crime-Related Proceeds, Instrumentalities and Property does not preclude confiscation proceedings such as those pending before the national court, where those proceedings are not ‘in relation to a criminal offence’ and their issue does not depend upon a criminal conviction.’

2 This curious word is defined in Article 1, third indent, of Council Framework Decision 2005/212/JHA of 24 February 2005 on Confiscation of Crime-Related Proceeds, Instrumentalities and Property (OJ 2005 L 68, p. 49 (Framework Decision 2005/212/JHA’ or ‘the Framework Decision’)) and Article 2, subparagraph 3, of Directive 2014/42/EU of the European Parliament and of the Council of 3 April 2014 (OJ 2014 L 127, p. 39), as corrected by the Corrigendum to Directive 2014/42/EU of the European Parliament and of the Council of 3 April 2014 on the freezing and confiscation of instrumentalities and proceeds of crime in the European Union (OJ 2014 L 138, p. 114) (see points 7 and 14 below).

3 See the first recital of Protocol No 36 on transitional provisions of the TFEU.

6 See the Action Plan of the Council and the Commission on how best to implement the provisions of the Treaty of Amsterdam on an area of freedom, security and justice — Text adopted by the Justice and Home Affairs Council of 3 December 1998 (OJ 1999 C 19, p. 1).

10 The United Kingdom and Denmark did not take part in the adoption of Directive 2014/42 and were not bound by it or subject to its application. See, respectively, recitals 43 and 44 of the directive.

11 For the sake of legibility I have omitted the long sequence of OJ references that accompany this listing — they are to be found in Directive 2014/42 itself.

12 29 April 2014 is the date of the ‘original’ publication of the directive in the Official Journal, which was followed by the publication of a corrigendum (see footnote 2) and a consolidated version of 19 May 2014.

13 See, judgment of 17 January 2008, Velasco Navarro, C‑246/06, EU:C:2008:19, paragraph 25 and the case-law cited.

14 See, inter alia, judgment of 18 December 1997, Inter-Environnement Wallonie, C‑129/96, EU:C:1997:628, paragraph 45.

15 That is indeed the position expressed at point 2.3 of the European Commission’s Explanatory Memorandum to the Proposal for a Directive of the European Parliament and of the Council on the freezing and confiscation of proceeds of crime in the European Union, COM(2012) 85 final.

16 The view I put forward here corresponds to one of the two possible ways to interpret framework decisions explored by Satzger, H., ‘Legal effects of directives amending or repealing Pre-Lisbon framework decisions’, New Journal of European Criminal Law, vol. 6, issue 4, 2015, 528-537. The second possible way, rejected by that author is to accept that framework decisions, when ‘touched’ by an amending directive, are transmuted into directives (a legislative equivalent to Midas’ golden touch). Were one to accept that idea, legal instruments that have not been adopted with the safeguards that apply to directives (and I think particularly of the role of the European Parliament in the one and the other procedure) would automatically acquire the legal effects of directives. I therefore reject the view espoused by F. Zeder that Articles 9 and 10(2) of Protocol No 36 on transitional provisions read together can only be understood as meaning that ‘any amendment of any provision of an act means “lisbonising” the act in its totality’ (See Zeder, F. ‘Typology of pre-Lisbon acts and their legal effects according to Protocol No 36’, New Journal of European Criminal Law, vol. 6, issue 4, 2015, 487).

18 Judgment of 16 juin 2005, Pupino, C‑105/03, EU:C:2005:386, paragraph 43. See also Lenaerts, K., ‘The contribution of the European Court of Justice to the area of freedom, security and justice’, International and comparative law quarterly, vol. 59, No 2, 2010, 255-301, 271.

19 The definition of confiscation in Article 2, subparagraph (4) of Directive 2014/42 as ‘a final deprivation of property ordered by a court in relation to a criminal offence’ is slightly different. That definition replaces the one of the Framework Decision as explained above in points 49 and 54 above.

20 See Article 31(1)(c) of the Treaty on European Union and recital 10 of the Framework Decision.

21 Council Framework Decision 2006/783/JHA of 6 October 2006, OJ 2006 L 328, p. 59. See recital 10 of Framework Decision 2005/212/JHA.

22 Communication from the Kingdom of Denmark, Council Document No 9956/02 ADD 1 (‘the explanatory note on the Danish initiative’).

23 See the explanatory note on the Danish initiative, p. 5. I note here that Article 3 of the Council Framework Decision of 26 June 2001 on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime (OJ 2001 L 182, p. 1) cross-refers, for the definition of the term ‘confiscation’ within its context, to that Convention.

24 See the Explanatory report to the Council of Europe Convention on laundering, search, seizure and confiscation of 8 November 1990, pp. 6 and 7.

25 See, to that effect, but in relation to Article 1(2) of Directive 2010/64/EU of the European Parliament and of the Council of 20 October 2010 on the right to interpretation and translation in criminal proceedings (OJ 2010 L 280, p. 1), judgment of 9 June 2016, Balogh, C‑25/15, EU:C:2016:423, paragraph 36.

29 In the judgment of 26 February 2013, Åkerberg Fransson, C-617/10, EU:C:2013:105, paragraph 21, the Court held that ‘the applicability of EU law entails applicability of the fundamental rights guaranteed by the Charter’ (emphasis added). See also judgment of 16 May 2017, Berlioz Investment Fund, C-682/15, EU:C:2017:373, paragraph 49.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> AGRO IN 2001 (Confiscation - Presumption of innocence - National legislation on confiscation without a previous criminal conviction - Opinion) [2019] EUECJ C-234/18_O (31 October 2019) URL: http://www.bailii.org/eu/cases/EUECJ/2019/C23418_O.html Cite as: [2019] EUECJ C-234/18_O

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