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“ NON CONVICTION BASED CONFISCATION SY S TEM IN ROMANIA ”

“ NON CONVICTION BASED CONFISCATION SY S TEM IN ROMANIA ”. Camelia Bogdan Judge at Bucharest Court of Appeal, second penal section camibogdan@gmail.com. T ime vs E vidences. Amount of evidences is FINITE. Evidences. Procedural tricks. Real evidences. Time. 0.

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“ NON CONVICTION BASED CONFISCATION SY S TEM IN ROMANIA ”

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  1. “NON CONVICTION BASED CONFISCATION SYSTEM IN ROMANIA” Camelia Bogdan Judge at Bucharest Court of Appeal, second penal section camibogdan@gmail.com

  2. Timevs Evidences Amount of evidences is FINITE Evidences Procedural tricks Realevidences Time 0

  3. The challenge/Authorities’ Response While we live in a world in which a philosophy of sovereignty of the 17th century is reinforced by a judicial model of the 18th century, defended by a concept of fighting crime of the 19th century that is still trying to come to terms to the technology of the 20th century, the 21st century shall belong to the transnational criminals. The Merger: The Conglomeration of International Organized Crime. (Jeffrey Robinson) “The Art of War, The Art of Strategy” written in the 5th Century BC by Sun Tzu: “it is not necessary to phisically destroy your enemy, it is sufficient to neutralise his will to fight”

  4. (CRIME DOES NOT PAY:Martin Luther King, Jr. Memorial, Washington D.C.)

  5. Overview of the main AR systems in Romania

  6. Standard of Proof in Asset Recovery Field source: StarInitiative, Manuel des biens mal acquis, Un guide pour les practiciens, Ed. Banque Mondiale, Washington, 2011 TrackingSeizingConfiscationConviction ReasonableProbableBalance ofBeyond a suspicioncause probabilities reasonable doubt

  7. International standards Council of Europe • Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (CETS No.: 141) - 1990 • Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism and its explanatory report – 2005 European Union • Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (available in other EU official languages) • Regulation (EC) no. 1781/2006 on information on the payer accompanying transfer of funds • Regulation (EC) no. 1889/2005 on controls of cash entering or leaving the Community • Directive 2007/64/EC of the European Parliament and the Council on payment services in the internal market

  8. International standards Financial Action Task Force • The FATF Recommendations United Nations • International Convention for the Suppression of the Financing of Terrorism (1999) (Terrorist Financing Convention) • Convention for the Suppression of Unlawful Seizure of Aircraft (1970) • Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation (1971) • Convention on the Prevention and Punishment of Crimes against Internationally Protected Persons, including Diplomatic Agents (1973) • International Convention against the Taking of Hostages (1979) • Convention on the Physical Protection of Nuclear Material (1980) • Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation (1988) • Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation (1988) • Protocol for the Suppression of Unlawful Acts against the Safety of Fixed Platforms located on the Continental Shelf (1988) • International Convention for the Suppression of Terrorist Bombings (1997)

  9. NCB Confiscation in Romania Carin model 1 • ART. 112 Criminal Code 2014 (eq. art 118 Criminal Code 1969) • Special confiscation: The following are subject to special confiscation: • e) goods acquired by perpetrating that has been acquired though unlawful activities, unless returned to the civil party and to the extent they are not used to indemnify the civil party:this is also the legal base for the third party confiscation/NCB CONFISCATION, because the Law does not stipulate that the measure should only affect the convicted person’s assets.

  10. NCB CONFISCATION Carin MODEL1)Romania • ART.112 (6) The goods and money obtained from exploiting the goods subject to confiscation as well as the assets produced by such, except for the goods provided for in par. (1) items b) and c), shall be also confiscated.

  11. Ncb Romania Carin Model 1 • the Court that can impose all types of sanctions NON-CONVICTION BASED CONFISCATION of the proceeds of crime: death, statue of limitation, etc.(see art.549 ind.1 Criminal PROCEDURE CODE)If the proceeds of crime, subject to confiscation, are not found, their equivalent value in money or the property acquired in exchange shall be confiscated.

  12. NCB CONFISCATION Carin MODEL1)Romania vs. ECHR STANDARS The special confiscation in the Romanian Legal system was described as a safety measure and not apenalty by the ECHR in Silickiene vs. Lithuania case (10.04.2012), PAR.33:.Seven countries of Coe (Albania, Germany, Georgia, Moldova, Romania, Sweden and Switzerland) provide for confiscation orders regardless of conviction. This type of confiscation order generally covers property that has been acquired though unlawful activities.

  13. Art.549ind.1 Criminal Procedure Code • Procedure for CONFISCATION or invalidation of a document when a case is closed • (1) In the situation where the prosecutor has ordered the case closed or dropped charges and requested the Preliminary Chamber Judge to order special forfeiture or a document to be invalidated, the prosecutorial order to close the case accompanied by the case file shall be sentto the court that would have legal jurisdiction to try the case on the merits, after expiry of the deadline stipulated at Art. 339 par. (4) or, as the case may be, at Art. 340 or after a ruling to deny the complaint.

  14. Circumstances preventing initiation and exercise of criminal action, art.16 Criminal Procedure Code • (1) Criminal action may not be initiated, and when it has already been initiated, may not be used if: • a) the action in question does not exist; • b) the action is not covered by the criminal law or was not committed with the guilt required by law; • c) there is no evidence that a person committed the offense;

  15. Circumstances preventing initiation and exercise of criminal action, art.16 Criminal Procedure Code • d) there is a justifying or non-imputability cause; • e) a prior complaint, an authorization or seizure of the body of competent jurisdiction or other requirement set by the law, required for the initiation of criminal action, is missing; • f) amnesty or statute of limitations, or death of a natural-person suspect or defendant occurred or de-registration of a legal-entity suspect or defendant was ordered; • g) a prior complaint was withdrawn, for offenses in relation to which its withdrawal removes criminal liability, reconciliation took place or a mediation agreement was concluded under the law; • h) there is a non-penalty clause set by the law; • i) double jeopardy (resjudicata); • j) a transfer of proceedings with a different country took place under the law.

  16. “RAFO/MARIAN IANCU” Bucharest Court of Appeal, decision 1207/ 14.10.2014 7 fake companies Specilal confiscatuion: over 104 Mil EUR, 57 mil USD, imovable property Livrare fictivă produse petroliere Reciclarebani Înregistrări cheltuieli fictive Beneficiao owner: defendant

  17. Financial flows: M I

  18. Case “”RIZA ȘTEFAN”-BUCHAREST TRIBUNAL, final confiscation order: SUPREME Court: CRIMINAL CODE 1969 Cumpărătorul Vânzător p Armatorul FAKE INVOICES s.p.568/F, 4.09.2012 Off-shore accounts Riza Ștefan 2.000.000 USD transferred brothers account UK House: name of the partner

  19. CaseStudy/NCB PRESCRIPTION The Asset Recovery in the Fraudulent Privatization of the Romanian Institute of Food Research

  20. Background

  21. Background Former ICA headquarters in the ‘90s “CRESCENT, La piovra”, Romanian newspaper, early 2000

  22. The recipe for a fraudulent privatisation - ICA (video)

  23. ‘’D. VOICULESCU”special confiscation S.C. Gr. V. I.C.A. Teren și clădire TV shares i.DV.

  24. Convictions • Businessman Dan Voiculescu: sentenced to 10 years in prisonfor ML, the EUR 60 M prejudice for using his political influence to buy the Food Research Institute for 100,000 euros ($135,000) — a fraction of its estimated value of 7.7 million euros ($10.3 million).

  25. Convictions • A final 8-year prison sentence on Gheorghe Mencinicopshi, former general director and member of the General Assembly of Shareholders and subsequently of the Board of the Bucharest Food Research Institute (ICA), in connection to the case involving the privatization of the Institute. • 7 years in prison for Sorin Pantis, former executive director of Grivco Voiculescu and Co. Industrial Group SA Bucharest. • Six other people were also given prison sentences in the 2003 sale. Two others got eight-year prison sentences and three others received sentences ranging from 4 to 6 years.

  26. Civil Action To cover damages • The EUR 60 M prejudice damnumemergens, lucrumcessans: to be recovered from the defendands

  27. Confiscations Directproceeds of crime • Over36,000 sqmof property (land+constructions) where the Bucharest FoodResearch Institute (ICA)operated.

  28. Confiscations Indirect proceeds of crime • the real estate of the TV stationsAntena 1 and Antena 3, the media group founded by businessman Dan Voiculescu • 2.984.358 lei from VoiculescuCameliaRodica- 9.947.861 shares at SC Compania de CercetăriAplicativeşiInvestiţii SA (SC ICA SA), donated by the convicted Voiculescu Dan • 2.984.358 lei from VoiculescuCameliaRodica- 9.947.862shares at SC Compania de CercetăriAplicativeşiInvestiţii SA (SC ICA SA), donated by the convicted VoiculescuDan • 3.515.756 USD plus VAT from the defendant Voiculescu Dan, the beneficial owner of Company GRIVCO SABucureşti at the concluding of renting contract n.5317/35/2003.165 between GRIVCO SABucureşti, as a landlord and SC Romtelecom SA, as a tenant

  29. Seizures Precautionarymeasures ordered through the Court resolution from 8.08.2014 of the Bucharest Law Court – Section II Criminal Cases regarding: • the movable and irremovable assets property of the defendant Dan Voiculescu and his daughters including the bank account and assets of the private companies where the abovementioned individuals are delegates, beneficial owners, associates or administrators, from Romania or abroad, to be identified during the procedures for the enforcement of the precautionary measures based on the provisions of article 32 of the Law 656/2002, article 249 paragraph 1, 4 Criminal Procedure Code in order to satisfy the confiscation order • the real estate of the TV stations Antena 1 and Antena 3

  30. Seizures Maintained the other precautionary measures disposedby the Courtof Appeal on July 1st, 2014 over: • 36,000 sqm of property (land+constructions )where the Bucharest Food Research Institute (ICA) operated. • 2.984.358 lei from VoiculescuCameliaRodica- 9.947.861 shares at ICA, donated by the convicted Voiculescu Dan • 2.984.358 lei from VoiculescuCameliaRodica- 9.947.862 shares at ICA, donated by the convicted Voiculescu Dan

  31. The end

  32. Questions?

  33. NCB Death, seizure third parties, GRIPA AVIARĂ case • Bucharest Tribunal, preliminary decision: 23 May 2012 • Parties: son, wife of a dead defend accused of passive corruption, Money Laundering demanding lifting of the seizure, demand denied by the Tribunal

  34. Barriers to Be Overcomein the Assets Recovery Field • Tracking of the proceeds of crime (lack of an integrated Financial Crime Analysis, not carrying parallel economic investigations, lack of preoccupation of identifying the ultimate beneficial owner, no centralised land registry) • Freezing of the proceeds of crime (misinterpretation of imperative legal provisions that require compulsory seizing/restraint orders in special laws combating corruption/tax evasion/money laundering justified by the fact that “the perpetrator owns nothing on his name”) • Confiscation of the proceeds of crime/Remedies to the civil parties /Compensation of the victims of the crime (inability to enter into plea agreements in order to secure the confiscation, poor implementation of third party/extended/no-conviction based confiscation, lack of legal provisions allowing non-profit organisations to participate ex parte in corruption trials in order to claim compensation for the victims, lack of willingness to recover the misappropriated funds that should fulfil the State budget)

  35. Barriers in the Judicial PhaseDue to Lack & Deficiency of Legal Provisions • The non-retroactive aplication of safety measures:Art.2-(2) of the new Romanian Criminal Code (entered into force on the February 1st, 2014) “No penalty, educational or safety measure can be ruled if was not stipulated in the criminal law at the date when the offence was committed”;no-retroactivity of confiscation orders stipulated by the law even if they are specifically characterized by the Constitutional Court as economic consequences of a crime, lacking the punitive element. Reason: While committing the offence, the perpetrator could have not foreseen that his/her profits would be subject to further confiscation (see: Constitutional Court ruling on June 25th, 2014: the extended confiscation is not applicable to property prior to 63/2012 law; on the contrary, see ECHR developments in Dassa Foundation vs. Liechtenstein) • Lack of effectiveness of execution of Freezing/Confiscation Order; lack of legal possibility for the Judge to stipulate the destination of the confiscated items/to supervise the enforcement of the orders • Asset management units of the proceeds of crime • Lack of statistics

  36. Barriers in the Judicial PhaseDue to Misinterpretation of the Existing Legal Provisions • Misinterpretation of Article 44(8) of the Constitution stating that „Lawfulness of acquirement shall be presumed”, though this presumption, being relative, could be rebutted with any evidence to the contrary, in this case the burden of proof lying with the person convicted for the respective offence (see ECHR developments in Arcuri vs Italy, Salabiaku, Pham Hong vs France, Grayson&Barnham vs UK - 9/23/2008 § 42, Paulet vs UK - 5/13/2014, Young vs UK - 5/6/2014) • No third party restraint & confiscation orders, because such measures constitute criminal accusations and presumption of innocence is likely to be infringed (on the contrary, see ECHR developments in Dogmoch vs Germany -9/8/2006, 26315/03, Silickiene vs Lithuania -4/10/2012, § § 33, 35, Welch vs UK –2/9/1995, §28) • No interest to track the proceeds of crime and to establish the real beneficial owner when parallel investigation did not take place in the investigation phase, contrary to the 30 of the FATF Recommendation

  37. Barriers in the Judicial PhaseDue to Lack & Deficiency of Legal Provisions • The non-retroactive aplication of safety measures:Art.2-(2) of the new Romanian Criminal Code (entered into force on the February 1st, 2014) “No penalty, educational or safety measure can be ruled if was not stipulated in the criminal law at the date when the offence was committed”;no-retroactivity of confiscation orders stipulated by the law even if they are specifically characterized by the Constitutional Court as economic consequences of a crime, lacking the punitive element. Reason: While committing the offence, the perpetrator could have not foreseen that his/her profits would be subject to further confiscation (see: Constitutional Court ruling on June 25th, 2014: the extended confiscation is not applicable to property prior to 63/2012 law; on the contrary, see ECHR developments in Dassa Foundation vs. Liechtenstein) • Lack of effectiveness of execution of Freezing/Confiscation Order; lack of legal possibility for the Judge to stipulate the destination of the confiscated items/to supervise the enforcement of the orders • Asset management units of the proceeds of crime • Lack of statistics

  38. Romania NCB Carin Model 2: EXTENDED CONFISCATION • ART. 112^1 • Extended confiscation • (1) Goods other than those referred to in Art. 112 are also subject to confiscation in case a person is convicted for any of the following offences, if such offence is likely to procure a material benefit and the penalty provided by law is a term of imprisonment of 4 years or more

  39. Model 1+2 Safety measures • both confiscation and extended confiscation are safety measures. • art. 107 of the Romanian Criminal code, the purpose of safety measures is to eliminate any state of danger and to prevent the perpetration of offences provided by the criminal law. Safety measures may also be taken in case no penalty is applied to the offender in accordance with art.107 par.3 of the Criminal Code (non-conviction based confiscation).

  40. Romanian NCB Confiscation: Model 4 Carin • Romanian Legal system also comprises the administrative confiscation, regulated by the following Laws: no. 115/1996, no 144/2007, no.176/2010. Thus, according to the Romanian legislation, the obligation for • declaring the wealth is instituted for dignitaries, magistrates and other civil servants.

  41. Administrative Confiscation:procedure • In the case in which differenceséightoccurbetween the declared wealth and what obtained • during the exercising of the public position are noted obvious differences, the wealth is subjected to the control of the National Integrity Agency.

  42. Administrative Confiscation:procedure • Afterwards, a report produced by the National Integrity Agency is sent to a Wealth Investigation Commission attached to the Court of Appeal. The National Integrity Agency sends the evaluation report and the Commission proceeds to investigate. • The investigation commission decides, by majority of votes, within maximum 3 months from the day of the intimation, passing a motivated ordinance, by which it may order:

  43. Administrative Confiscation:procedure The investigation commission decides, by majority of votes, within maximum 3 months from the day of the intimation, passing a motivated ordinance, by which it may order: • a) sending of the case for solution to the court of appeal in the territory of which the person whose wealth is subjected to control resides, if finds, on the basis of the proofs produced, that the obtaining of a part of that wealth or of certain determined goods has no licit character; • b) dismissing the case if the origin of goods is justified; • c) suspension of the investigation and sending the case to the competent prosecutor's office, if the acquisition of goods whose origin is unjustified represents an offense.

  44. National Agency of Integrity “Vele Dan” Unexplained wealth: 129.517,80 USD 1999-2003 Evidences: -premises search -testimonies -invoices “Zidaru Daniel” - “Opel Asta” (2), “Volkswagen Golf”, “Audi A4”, “Suzuki” – 61.000 Euro and 10.000 lei Evidences: -premises search -testimonies -invoices

  45. Future Challenges • CIVIL CONFISCATION

  46. QUESTIONS?

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