Lehrstuhl für Öffentliches Recht

PMI-Impact: Asset recovery in the German legal system

 

Asset recovery in the German legal system – an instrument to fight tobacco trafficking ?

– Projekt im Rahmen einer Drittmittelfinanzierung durch PMI Impact –

 

On 1st of October 2017 our project started under with Professor Becker as principal investigator. The Project is funded by Philipp Morris Impact (PMI Impact). The following summary provides an overview of the funding body and the project itself:

 

Who is PMI Impact?

PMI Impact is a global initiative to support projects dedicated to fighting illegal trade and related crimes, such as corruption, organized crime and money laundering. Public organizations, law enforcement, private entities, and non-governmental organizations from around the world were invited to submit their project proposals for funding.

280 projects applied in the first funding round. Among them was the Christian-Albrechts-Universität zu Kiel (CAU) with the above project. Form these projects a PMI Impact Expert Council selected only 32 successful applicants from 17 countries in Europe and the US. PMI Impact supports these projects with a total grant of approximately $ 28 Million USD. Our project is funded with around $ 182.000 USD.

More information about PMI Impact and the other projects is available on:

https://www.pmi-impact.com/

 

What is the Project about?

This project lasts for two years and focuses on the instrument of asset recovery as one very important instrument of the German legal system (also existing in a number of other jurisdictions) employed to discourage illegal trafficking of tobacco.

Until 1st of July 2017 a criminal court could demand the “Verfall” of assets of criminal origin (cf. §§ 73 et seq. German Criminal Code / Strafgesetzbuch – StGB), while the “Einziehung” (cf. §§ 74 et seq. StGB) applied to goods, the production of which is already a criminal offence.  On both occasions the ownership is been transferred to the state as an additional criminal sanction.

From the offender’s point of view, asset recovery is often a more significant sanction than imprisonment or a fine as he loses the (illegally obtained) economic foundation of his livelihood. In fact, it is the only way to tackle organized crime because the conviction of individuals does not regularly affect “business” as long as their finances remain untouched. As a consequence of the important role organized crime plays in the system of trafficking tobacco a closer examination of the asset recovery is overdue.

However, since asset recovery could only be ordered in conjunction with a final criminal judgement (and hence after a lengthy process with an array of procedural obstacles and the presumption of innocence), victims of the certain crimes might have perceived the instrument as not being as readily available as it should be in order to deter in a meaningful and effective way.

To address this problem on 1st of July 2017 the German legislator replaced the old provision addressing asset recovery with a new one in order to take a major step forward towards a higher practical relevance of asset recovery. The instrument had originally been limited to only some criminal offences so far, however, the new provision opens it up to every offence. Another change is probably even more significant: One of the disadvantages of the instrument in its original shape was the necessity of being convicted of an offence. The new law provides an “independent” asset recovery even if it is impossible to convict an perpetrator for an offence or to prove that the assets are originating from such an offence. This is very similar to the „non-conviction-based confiscation” known Anglo-American legal systems. Thus, the thrust of the new law is to allow for asset recovery even if it is impossible to achieve a final conviction for the offence from which the assets are coming from. Now, already a sufficiently strong suspicion that the assets are of a criminal origin allows for an asset recovery.

However, as tempting as this new law might be from a potential victim’s point of view, it has to be scrutinized with a significant element of doubt with regards to its compatibility with constitutional safeguards and the provisions of European law. For example, attempts to reverse the burden of proof under these circumstances have to be tested against the presumption of innocence; the right to property is also of significance.

Taking German law as an example, this project will scrutinise and test the limits of European law with regard to asset recovery and its potential independence from the safeguards of a full criminal procedure and a subsequent judgement. In addition, alternative ways of asset recovery which promise certain effectiveness against trafficking shall be developed and assessed.