New procedures for assets seized in criminal proceedings

A new law on the management and custody of seized assets requires anyone holding assets seized in domestic or overseas criminal proceedings, including banks and financial services providers, to declare those assets to the relevant authorities before 1 May 2023.

New asset management office to manage seized assets

The Law of 22 June 2022 on the management and recovery of seized or confiscated assets, which came into force on 5 July 2022, established the Asset Management Office (Bureau de gestion des avoirs). The Asset Management Office is responsible for managing all amounts seized during the course of domestic or overseas criminal proceedings, including cash, credit balances recorded on accounts, receivables, and virtual assets, along with any other seized property which needs managing for its preservation or to maintain its value. Seized property is held pending a final court decision ordering its confiscation, destruction or return.  

Consignment office takes on a new role

Practically speaking, management consists in lodging sums of money and account credit balances with the State Consignment Office (Caisse de consignation). Virtual assets are held in a portfolio opened in the name of the Consignment Office. Receivables are either held or collected via State subrogation to the creditors’ rights. Other seized assets are either retained in kind or disposed of and replaced by a sum of money. 
If retaining a seized asset is likely to lead to a significant decline in its value, any interested person may apply to the competent authorities for the disposal of the asset. If the application is successful, the Asset Management Office carries out the decision to dispose. The sale proceeds are substituted for the property in question and retained by the Asset Management Office.   

Asset recovery office to trace and recover seizable property

The Law of 22 June 2022 also establishes the Asset Recovery Office (Bureau de recouvrement des avoirs), which is responsible for identifying and tracing assets likely to be seized or confiscated in an international cooperation exercise, an inquiry or a domestic judicial investigation. It also assists the Public Prosecutor's Office (Parquet) in the execution of convictions and sentences. The Law introduces a new "post-sentence" investigation procedure, i.e. one that takes place after the accused has been convicted. The Public Prosecutor's Office can instruct the Asset Recovery Office to trace and recover the assets of a convicted person that could form the base for a confiscation of property. In contrast to previous procedures, tracing and confiscation of the proceeds of crime (or equivalent assets) can continue after the conclusion of the main trial.  

Professionals must cooperate

In carrying out its functions, the Asset Recovery Office can request professionals to provide information about a convicted person's assets. Professionals must answer all questions posed without informing their client of the request, on pain of a fine of between EUR 1,250 and EUR 1,250,000. The Asset Recovery Office can also exchange information with its foreign counterparts.  

If this information reveals the existence of assets belonging to the convicted person, the Asset Recovery Office may instruct the relevant professionals to place those assets at its disposal or transfer them to the Consignment Office. In the case of virtual assets, the Asset Recovery Office will order their transfer to a portfolio opened in the name of the Consignment Office. The Asset Management Office is then responsible for managing the assets, as described above. 

Declaration to be made before may 2023

Under Article 18 of the Law of 22 June 2022, any entity holding funds, receivables or virtual assets seized under domestic or foreign criminal proceedings before the Law entered into force (i.e. 5 July 2022) must inform the Asset Management Office of those assets and follow the instructions given regarding their transfer. If the seized assets or property are pledged, a case by case analysis will be required.

This information must be submitted before 1 May 2023.

Jean-Luc Putz
Business Crime