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FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OF CRIME) IN BOSNIA AND HERZEGOVINA

FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OF CRIME) IN BOSNIA AND HERZEGOVINA. Adna Dobojlic Legal Adviser Prosecutors Office of BiH 3-6 October 2012. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OF CRIME) IN BOSNIA AND HERZEGOVINA.

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FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OF CRIME) IN BOSNIA AND HERZEGOVINA

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  1. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OF CRIME) IN BOSNIA AND HERZEGOVINA AdnaDobojlic Legal Adviser Prosecutors Office of BiH 3-6 October 2012

  2. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • Confiscation of Assets Law has not been adopted in Bosnia and Herzegovina, and the seizure of assets gained through criminal activities remains uneven throughout the state. • State level regulations that define this area are the Criminal Code of BiH, the BiH Law on Execution of Criminal Sanctions, Detention and Other Measures and BiH Law on Enforcement Procedure before the Court of BiH. • Criminal Codes in BiH, apart from the Republika Srpska Criminal Code, have introduced an important novelty - extended seizure, the reversed burden of proof in a separate procedure when there is probable cause to believe that assets were gained through criminal activities and where the owner or possessor is unable to provide evidence that the gain was obtained legally.

  3. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA International documents, signed and ratified by BiH are: • Council of Europe's Convention from 1990. • The UN Convention of 2000. The Palermo Convention against Transnational Organized Crime. • Action plan of the Council of Europe of 1997 to combat organized crime in the area of Confiscation of Proceeds of Crime. • Action plan of the Council of Europe of 1997 "Prevention and Control of Organized Crime, the European Union Strategy for the Beginning of the New Millennium“. • The Council of Europe's Convention from 2005 on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism. • The Convention on European Guidelines for Effective Measures to Prevent and Combat Trafficking in Women for the Purpose of Sexual Exploitation. • The Convention on the Prevention of the Slave Trade and Slavery (Slavery Convention).

  4. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • Supplementary Convention on the Abolition of Slavery, the Slave Trade, and Institutions and Practices Similar to Slavery. • The Convention on the Rights of the Child. • Optional Protocol to the Convention on the Rights of the Child on the Sale of Children, Child Prostitution and Child Pornography, NOR Recommendation (2000). • The UN Convention against Transnational Organized Crime, together with two supplementing protocols: the Protocol against the Smuggling of Migrants by Land, Sea and Air and the Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children. • The Convention concerning Forced or Compulsory Labor or Forced Labor Convention (No.29). • The Convention for the Suppression of the Traffic in Persons and of the Exploitation of the Prostitution of Others.

  5. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • The regulations in Bosnia and Herzegovina contain provisions related to the confiscation of the proceeds of crime. The institute of extended seizure of proceeds of crime in the BIH legislation was first introduced in the reform of criminal legislation in 2003 and specific details were addressed in recent amendments to the Criminal Code of Bosnia and Herzegovina. • The adoption and implementation of the relevant legislation relating to the confiscation of the proceeds of crime is the requirement that the European Union has placed before Bosnia and Herzegovina some time ago. • EC’s Progress Report on Bosnia and Herzegovina for 2011 - the section related to the fight against organized crime and terrorism- states that "the legal framework for the confiscation of assets is not fully implemented, and that regulations on confiscation of proceeds of crime remain uneven throughout the country. The effective structures for management of seized assets and its safe keeping are lacking.”

  6. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • Article 110 CPC of BiH – The Basic of the Confiscation of Material Gain: • Nobody is allowed to retain material gain acquired by the perpetration of a criminal offence. • The gain referred to in paragraph 1 of this Article shall be confiscated by the court decisions, which established the perpetration of a criminal offence, under the terms set forth under this Code.

  7. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • Article 110a CPC of BiH – Extended Confiscation of Property Gain Acquired Through Perpetration of a Criminal Offence: • Where criminal proceedings involve the criminal offences set fourth under Chapters XVII, XVIII, XIX, XXI, XXIA and XXII of the Code, the Court may issue a decision under Article 110, Paragraph (2) and confiscate the property gain for which the prosecutor provided sufficient evidence reasonably believe that such property gain was acquired by the perpetration of these criminal offences, while the perpetration failed to prove that the gain was acquired in a lawful matter.

  8. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • Article 111 CPC of BiH – Ways of Confiscating Material Gain: • All the money, valuable objects and every other material gain acquired by the perpetration of a criminal offence shall be confiscated from the perpetrator, and in the case the confiscation is not feasible – the perpetration shall be obliged to pay an amount of money which corresponds to the acquired material gain. Material gain acquired by perpetration of a criminal offence may be confiscated from the persons to whom it has been transferred without compensation or with a compensation which does not correspond to the real value, if the persons knew or should have known that the material gain had been acquired by the perpetration of a criminal offence. • If proceeds of a criminal offence have been intermingled with property acquired from legitimate sources, such property shall be liable to confiscation not exceeding the assessed value of the intermingled proceeds. • Income or other benefits derived from the proceeds of the criminal offence, from property into which proceeds of intermingled shall also be liable to the measures referred to in this Article, in the same manner and extent as the proceeds of the criminal offence

  9. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • Under the provisions of Article 392 of the CPC BiH (analogous provisions exist in the entity criminal procedure codes and Brcko District’s CPC) during the course of the investigation and the proceedings the prosecutor is obliged to collect evidence and examine the circumstances that are important for the establishment of the property gain obtained by commission of a criminal offense. • The Court shall establish proceeds of crime ex officio and may establish the value of property gain by a free estimate if the establishment would be linked to disproportional difficulties or a significant delay of the procedure • The Criminal Procedure Code of Bosnia and Herzegovina stipulates that when the forfeiture of property gain obtained by commission of criminal offense is a possibility, the Court shall ex officio and under the provisions applicable to the judicial enforcement procedure define temporary security measures.

  10. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • The profit in the crimes against property or economic crimes is one of the elements of a criminal offense. Direct profit represents proof of such offense. • In terms of organized crime the amount and type of profit is determined, inter alia, by means of special investigative actions, but information about the financial transactions carried out by the suspect and other person are also relevant. • What Article 218 of the BiH Law on Execution of Criminal Sanctions, Detention and Other Measures stipulates is that the confiscated material gain expressed in cash, securities etc. shall be credited towards the budget of the institutions of Bosnia and Herzegovina and utilized in accordance with the Law on Budget Execution, while movable and/or real property will be sold in accordance with the existing regulations. The funds obtained in this way shall be credited towards the Budget, or the property shall be given for use to social policy or education organizations, or state bodies.

  11. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA Other countries may submit various requests and in such cases there must be a possibility to respond to the: • Request for delivery of information on bank accounts, • Request for information on bank transactions • Request for monitoring of bank transactions.

  12. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • During the course of financial investigation if it is suspected that there are assets in foreign countries, that were acquired through commission of a criminal offense, every possibility shall be explored i.e. police cooperation between the states on the basis of signed agreements, cooperation with Interpol, direct cooperation of individual prosecutor's offices or agencies providing that such agreement on cooperation exists and pursuant to the rules and mutual legal assistance. • The prosecutor leads or directs "classical investigation" and parallel financial investigation as its part . • Financial investigation aims to collect information about the property of the following persons: - The suspect -  The accomplice -  Persons close to them an -  Companies.

  13. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • The entire property is being established in accordance with the determination of what was possible to acquire in a lawful manner, and what points to the property derived from the commission of the criminal offense regardless whether it is the matter of: -   Funds, -   Estate, -    Movables or -    Rights. • The property inspections are carried out in relevant institutions and registers such as land registry offices, cadastre records, tax records, courts, banking agencies, registers of securities, stock records, CIPS records, vehicle registers, appropriate databases, collateral etc.

  14. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • The gain acquired through criminal offense that is the subject of an investigation or for which the perpetrator was convicted represents a single property that can be seized. • It is possible to seize property from third parties who have acquired material gain (an item) by non-market price and should have or could have known that this item might be of illicit origin as well as from close relatives of the perpetrator. The profit must be confiscated even if it has been transferred to a legal entity.

  15. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • Access to bank data is possible only with a court order and for that certain standard evidence is required . • It is particularly important to have good and swift cooperation with the court that issues such orders and the financial institution that enforces them. • Determination of the income acquired from a particular criminal offence is an important basis for the implementation of temporary measures and for a court order for final confiscation. Criminal legislation of Bosnia and Herzegovina provides that the court may decide on the amount of forfeited income on the basis of free evaluation of evidence when that amount cannot be precisely determined.

  16. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • The established income that can be forfeited consists of: -   money -   securities -   movables; -   real estate, -   property located abroad • It is necessary to have effective investigative and provisional measures for the final confiscation .

  17. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • The temporary seizure of assets is an independent proof gathering action where evidence and items used are gathered to establish facts in the criminal proceedings, as well as to prevent the commission of criminal offenses, and to prevent the use or disposition of the property. • The order of temporary seizure shall be issued by the court on the motion of the Prosecutor or on the motion of authorized officials who have been approved by the Prosecutor (Article 65 of the CPC BiH). • The seized items and documentation shall be deposited with the Court, or the Court shall otherwise provide for their safekeeping. (Article 70 of the CPC BiH).

  18. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • The Court may issue a decision ordering a legal or physical person to temporarily suspend a financial transaction that is suspected to be a criminal offense or intended for the commission of the criminal offense, or suspected to serve as a disguise for a criminal offense or disguise of a gain obtained by a criminal offense (mostly related to the criminal offense of Money Laundering), at the request of the prosecutor; the court may order that a financial asset or cash is seized and deposited in a special account and kept until the end of proceedings (Article 72of the CPC BiH ), which also provides that the court may, on prosecutor’s motion, order that a bank or other entity that performs financial operations provide information about the financial transactions and the like. In urgent cases the same may also be ordered by the Prosecutor of which he/she must immediately inform the Judge who may, within the 72 hour deadline, issue an order. In case that the Judge does not issue such an order the Prosecutor is obliged to return the data without previously accessing it.

  19. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • The term property refers to the following: -   money -   valuables, -   real estate. -   Any other assets acquired through a criminal offense • Temporary security measures are defined by the court ex officio (Article 395 of the CPC BiH) because the property gain obtained by a criminal offense shall be established ex officio. This measure shall be applied when the conditions for seizure are met, and the provisions of Article 202 of the CPC BiH - enforcement procedure shall be applied accordingly. Enforcement rules apply to the extent that the nature of things allows its application on the property gain as a category of criminal law.

  20. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • The most common measures are temporary ban on use, seizure and depositing of cash, the prohibition of further withdrawals from the account of the suspect (or others). • The court shall issue a decision ordering temporary security measures to ensure that it has the effect of the decision on enforcement. The parties have the right to appeal the aforementioned decision. • The expressly prescribed provision that no one can keep the proceeds of a criminal offense has a significant preventive effect because the potential offenders are made clear that they shall not be able to keep the proceeds of a criminal offense; the provision stipulates that property acquired by commission of the criminal offense is to be seized as a safety measure and ordered by the court. (Article 74 of the CC BiH)

  21. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • Items may be confiscated even if they are not owned by the perpetrator, if the consideration of public safety or moral reasons so require, and the rights of the third parties to obtain damage compensation shall not be affected by it. • Criminal Codes in BiH determine the relations between measures of confiscation of proceeds of crime and property claim of the person injured by the criminal offense. The court shall, upon the provisions of this Article, apply the measure of confiscation of proceeds of crime only if the victim was not granted property claim. The property claim of the injured party has priority over the confiscation measure. Usually, during the criminal proceeding, the injured party is referred to litigation.

  22. CONFISCATION OF UNLAWFUL ACQUIRED PROPERTY (PROCEEDS OF CRIME) IN BOSNIA AND HERZEGOVINA • Hence, the final confiscation requires effective investigative and provisional measures for: -  identification, -   detection, -   freezing or temporary seizure of assets subject to confiscation in order to prevent trade, transfer or disposal of such property and to facilitate the subsequent confiscation. • Article 396 of the CPC BiH prescribes forfeiture of property gain acquired by commission of a criminal offense by the Court in a verdict by which the accused is declared guilty, in a ruling on application of a correctional measure or a verdict establishing that the accused committed the criminal offense in the state of mental incompetence given that the harmful consequences have occurred.

  23. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • The Prosecutor leads the investigation, and manages the activities of authorized officials pertaining to the identification of a suspect, gathering of statements and evidence and conduct of other activities. Prosecutor's supervision over the performances of authorized officials commences as soon as there are grounds for suspicion that a criminal offense has been committed, and often in practice the prosecutor is informed of it by the authorized officials. • The prosecutor has the power to request information from all government bodies, companies and individuals. The prosecutor holds all of the aforementioned authorities when establishing the proceeds of crime. All authorized officials involved in the criminal proceeding are obligated to act as ordered by the prosecutor and independently within their own authorities.

  24. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • It is necessary that they work together, and that there is coordination, at all times, between the law enforcement employees who, according to Criminal Procedure Code of BiH, have the status of authorized officials. Those are the officials of the following agencies: -   BiH Border Police, -   State Investigation and Protection Agency, -   BiH Indirect Taxation Authority -   Entity and Brčko District Police -   Tax Administrations of the Entities and Brčko District with mandatory cooperation of other institutions such as the Banking Agency, the courts (land registry office), offices of the public attorney, municipalities (cadastre) and others. • The Prosecutor's Office coordinates the efforts of all these law enforcement agencies in specific cases.

  25. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • With regards to international standards and applicable laws in the countries that have ratified the international conventions in this area, the following elements can be highlighted: -   Confiscation of assets - property that is derived or acquired, directly or indirectly, by commission of criminal offenses and "legitimate" property equal to the value of proceeds of crime (seized value) is possible; -   Investigative measures facilitate the identification, tracing and temporary security (seizure of property subject to seizure, including access to bank records and the use of special investigative powers).

  26. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • Police conducts the financial investigation: collects evidence of the crime, the perpetrator and the proceeds of crime. Police may temporarily seize assets (property used to commit the criminal offense), items of the criminal offense and evidence. This has the effect that the police may motion (the prosecutor) for the temporary measure (seizure) or security of assets that are subject to confiscation. In cases where there are multiple law enforcement agencies that are responsible for criminal and financial investigation, a clear definition of responsibilities and the conclusion of agreements on cooperation and exchange of information is required. • Temporary seizure of assets as an urgent investigative measure requires close and direct cooperation between the police, prosecutors and preliminary proceeding judge who issues an order for temporary seizure

  27. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA RESULTS OF INVESTIGATIONS CONDUCTED IN CASES OF THE BIH PROSECUTOR'S OFFICE AND THE COURT OF BIH WITH FORFEITURE OF ILLEGALLY ACQUIRED PROPETY GAIN - case law - Verdicts of the Court of BiH examples:

  28. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA CONCLUSION • Criminal Procedure Codes in BiH do not contain provisions that relate to specific procedure of confiscation hence the provisions of the Criminal Code could not be applied. Criminal Procedure Codes provide that the court may impose a confiscation measure in case of a: guilty verdict, ruling of judicial admonition, ruling of correctional measures, and the procedure in the event of mental incapacity. • Criminal legislation in BiH does not prescribe the possibility or obligation of forfeiture of legal assets as compensation for illegally acquired assets, which is not in line with international and European conventions and decisions.It is the possibility to seize the appropriate counter value of legal property that is an essential condition for the application of gross value method which is used in most European countries in which the criminal laws are fully in line with European standards.Due to this fact BIH applies the net value principle that can not comply with the postulate that no one is allowed to keep illegal assets.

  29. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA • The biggest challenge remains the actual implementation . • The reason for this is the lack of specialized units and police investigators who specialize in financial investigation. Hence it is necessary to form such specialized units and investigators and to train them to carry out financial investigations. • There is also an issue of custody of forfeited assets, i.e. asset management following the confiscation of assets by the final court verdict. • BiH Strategy to Combat Organized Crime and Corruption 2009 - 2012 lists establishment of a body - Agency for custody, management and disposition of temporarily and permanently forfeited assets acquired through criminal offences as one of its main goals, and the leader in this activity, which is in progress, is the BiH Ministry of Justice.

  30. FORFEITURE OF ILLEGALLY ACQUIRED GAIN (PROCEEDS OFCRIME) IN BOSNIA AND HERZEGOVINA Thank you for your attention! Adna Dobojlic Acting Head of Office of the Chief Prosecutor Legal Adviser Prosecutor’s Office of BiH Adna.DobojlicUcoglan@tuzilastvobih.gov.ba

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