Financial Crime World

Confiscated Assets: A Key Tool in Fighting Crime

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Portugal’s laws allow for the confiscation of assets linked to criminal activity, providing a vital mechanism for tackling organized crime and recovering ill-gotten gains.

Understanding Confiscated Assets

According to Article 7 of Law No. 5/2002, any differences between a convicted person’s assets and their lawful income are considered proceeds of crime. This includes:

  • Assets owned by the individual
  • Assets transferred to third parties at undervalued prices
  • Assets received in the five years prior to being accused

Using Confiscated Assets to Settle Claims

Confiscated assets can be used to settle civil claims for damages or compensation arising from a conviction. Victims who have suffered financial losses due to crime must file a civil claim within criminal proceedings or a separate civil action. The law prioritizes the satisfaction of victims’ interests over confiscation, allowing seized assets to be used to compensate them even if they are not directly linked to the crime.

Recovering Financial Advantages

It is possible to recover financial advantages or profits obtained through criminal activity, but proof of the link between the offense and the asset must be established. In cases involving corruption, Law 5/2002 explicitly considers interest, profits, and other benefits as proceeds of crime.

Non-Conviction Forfeiture

In Portugal, in rem confiscation outside the scope of a criminal case is not permitted. However, confiscation may still occur within a criminal case if there is sufficient evidence of the commission of the crime but it is impossible to convict the individual due to their death or absconding.

Managing Confiscated Assets

The Asset Management Office (GAB) ensures the administration of seized, recovered, or forfeited assets in favor of the state. Frozen assets must be managed well to ensure their full return to the community with some equity increase. In some cases, the GAB may need authorization from the Public Prosecutor’s Office or investigating judge to sell seized assets.

Seized assets may also be managed by public or private institutions appointed as custodians. The related costs are borne by the state, but conflicts have arisen between private custodians, authorities, and asset owners about who bears these costs.

Conclusion

Portugal’s laws on confiscated assets provide a powerful tool in the fight against crime, allowing for the recovery of ill-gotten gains and compensation for victims. Effective management of seized assets is crucial to ensure their full return to the community while minimizing costs and conflicts.