According to United Nations estimates, the total amount of criminal profits worldwide in 2009 was approximately 1.6 trillion euro, or 3.6 per cent of global GDP in that year.
There are no general estimates of the size of criminal profits in the European Union, though some Member States do publish figures. In Italy, for instance, organised annual crime revenues were an estimated 150 billion euro in 2011. In 2006 in the United Kingdom, organised criminal revenue was estimated at £15 billion (18 billion euro).
The global drug trade alone generated 245 billion euro in 2005, according to the United Nations. Trafficking in human beings is globally worth 32 billion euro per year, while the global market in counterfeit goods was estimated at up to 190 billion euro annually by the OECD.
The sums confiscated by Member States, however, are modest in comparison. For example, in the United Kingdom in 2006, a mere £125 million (149 million euro) was recovered by the State. More recently, in 2009, confiscated assets were valued at 185 million euro in France, 184 million euro in the United Kingdom, 50 million euro in the Netherlands, and 281 million euro in Germany.
According to the European Commission, this disparity between criminal wealth accumulated and assets seized exists because the existing EU legal framework has proven to be inadequate, unevenly implemented, and under-used. As shown in the implementation reports published by the Commission, the existing rules are applied differently and confiscation and asset-recovery activities are hindered as a result of substantial differences between Member States’ legislations.
Now the Commission is proposing a Directive that aims to set up a more comprehensive and coherent EU legal framework for the confiscation of profits and assets from serious and organised criminality. It will simplify existing rules and fill gaps which have benefitted criminals until now.
Criminal activities are often transnational and the assets of criminal groups are increasingly invested outside their country, according to a statement from the European Commission, with organised crime groups engaging in an increasingly wide range of profitable illegal activities, and reinvesting substantial profits in legal activities.
The new rules would have a significant impact on criminal behaviour. They would oblige criminals to change their practices and make it more difficult for them to hide their assets. They include new measures to confiscate assets from criminals, as well as those assets transferred to third parties. They would also facilitate precautionary freezing of assets suspected of being illegally obtained, and force authorities to manage seized assets to ensure they do not lose economic value.
For example, the application of non-conviction based confiscation (freezing and confiscating assets irrespective of a prior conviction of the owner in a criminal court), even in limited cases, may have a substantial impact on organised crime. In Italy, the application of non-conviction based confiscation provisions to a dead suspect’s heirs allowed authorities, in 2010, to freeze, in a single case, assets estimated to be worth at least 700 million euro. In this case, a businessman suspected of being the “fiduciary person” of an important organised crime group died from unknown causes. He had been convicted of participation in a criminal organisation by a first instance criminal court, but an appeal was pending. The assets frozen included 136 apartments, 11 warehouses, 75 land estates, 8 shops, 2 villas, 51 garages, company shares and bank accounts, for a total value estimated between 700 million and 2 billion euro. In 2008, Italy had passed legislation which could prevent the heirs of a deceased defendant whose assets had been frozen from legally inheriting the assets and having them released. The businessman’s relatives were not able to explain the legal origin of all of the assets, nor the huge disproportion between their declared revenues and the frozen assets.
The provisions allowing third party confiscation, even in limited cases, will mitigate the effects of the increasingly widespread practice by suspects of transferring property to a knowing third party to avoid confiscation.
The use of precautionary freezing powers in urgent cases, prior to seeking a court order or pending its request, will prevent assets disappearing, and ensure that they remain available for confiscation.
The rules on effective execution of confiscation orders will prevent convicted persons, who were successful in hiding the proceeds of their crimes throughout the entire duration of criminal proceedings, from enjoying their ill-gotten wealth with impunity once they are released from prison.
A typical example is operation “Shovel” (2010), conducted by the Spanish authorities in collaboration with the United Kingdom, Ireland and Belgium and with the assistance of Europol. The targeted criminal group, led by Irish and UK criminals, was involved in drug and weapons trafficking, money laundering, forgery of documents, and murders. Over 700 police officers were deployed in many Member States on the day of the operation. “Shovel” resulted in 38 arrests (24 in Spain including two lawyers who facilitated money laundering operations, 12 in the UK, 1 in Ireland and 1 in Bulgaria). 60 luxury properties in Costa del Sol, 25 luxury cars, and 180 bank accounts were also frozen.