Portugal Strengthens Asset Forfeiture Laws to Combat Fraud and Crime

Preventing Asset Dissipation: Portugal’s Protective Attachments

In a bid to prevent the dissipation of assets by suspects of involvement in fraud or where there is a material risk of dissipation, Portugal’s legal system provides for protective attachments. These are court-ordered measures that secure assets and proceeds.

The Attachment Process

The attachment process involves requesting the court to issue an order regarding a debtor’s property or rights, such as:

• Bank accounts
• Real estate
• Shares
• Credits over a third party

Types of Attachments

The type of attachment depends on the nature of the assets in question. For example:

• Real Property Attachments: registered at the competent land registry office
• Personal Asset Attachments: seizure and custody by an enforcement agent
• Defendant’s Right Attachments: achieved through notification to the third-party debtor

Conditions for Attachment

To secure these orders, the court must be convinced that there is a:

• Serious and concrete risk that the lack of attachment could compromise asset recovery in a main lawsuit (periculum in mora)
• Preliminary evidence of the existence of the right being protected (fumus boni juris)

Timing of Attachment

Protective attachments can be granted at various stages of proceedings, including:

• During trial
• Even after a merit judgment on the cause

In some cases, these orders can be issued ex parte if the defendant’s prior knowledge could compromise their successful execution.

Additional Measures

Portugal’s Criminal Procedure Code foresees two kinds of provisional measures aimed at freezing or seizing assets suspected of being linked to criminal activities:

• Precautionary Attachment: a measure aimed at preserving evidence and preventing its dissipation
• Economic Surety: a guarantee for the enforcement of confiscation penalties imposed by the court or compensation due to victims of crime

Asset Recovery Office (ARO) Authority

The ARO has the authority to carry out provisional seizure on behalf of the public prosecutor in respect of legal persons suspected of committing criminal offences. This power is exercised under the supervision of judicial authorities, ensuring that all seizures are authorized, ordered, and validated by the courts.

Obtaining Evidence

Obtaining evidence is a crucial aspect of both civil and criminal proceedings in Portugal. In civil cases, parties may produce documentary evidence, which is assessed by the court at its discretion. If defendants fail to respond to a lawsuit, the court must verify the service of process and order repetition if necessary.

In criminal proceedings, the burden of proof lies with the public prosecutor, who must prove beyond reasonable doubt the defendant’s guilt or that specific assets are the proceeds of the criminal offence. The relevance of oral evidence given before the court is highlighted in both prosecution and defence cases, with a focus on ensuring a fair trial for all parties involved.

Strengthening Asset Forfeiture Laws

In recent years, Portugal has taken steps to strengthen its asset forfeiture laws, including:

• Granting the public prosecutor power to lift bank secrecy
• Issuing reasoned orders to financial institutions in criminal proceedings related to organized crime and economic and financial criminality

This move aims to facilitate the recovery of assets linked to criminal activities and prevent their dissipation.