Asset Forfeiture Before Conviction: An Unconstitutionality in the Name of Efficiency?

On June 20, 2024, the Minister of Justice presented the Anti-Corruption Agenda with 32 measures, including a "new paradigm of Asset Forfeiture in favour of the State," in line with Directive 2024/1260 of the European Parliament.
Articles 03/07/2024

The Anti-Corruption Agenda was presented by the Minister of Justice on 20 June 2024, consisting of a set of 32 measures approved by the Council of Ministers.

The measure on this Agenda that is the subject of the most debate is the creation of a “new paradigm of Extended Asset Forfeiture in favour of the State, reverting assets and economic proceeds of corruption to the State”, particularly in view of the need to transpose Directive 2024/1260 of the European Parliament and of the Council, dated 24 April 2024, on the recovery and confiscation of assets.

In this directive, which has the express objective set out in recital 7 “to facilitate and ensure effective asset recovery efforts throughout the Union”, there is not only the possibility of extended confiscation of assets, mentioned in recital 13 and concretised in article 14, but also the possibility of confiscation not based on a conviction, which is elaborated on in recital 30 and whose conditions for verification are explained in article 15.

Extended Loss of Assets

As far as the extended confiscation of assets is concerned, the directive will not entail major changes in the Portuguese legal system, since this institute is already provided for in Article 7 of Law 5/2002.

This article establishes a presumption according to which “the difference between the value of the defendant’s assets and those that are consistent with his lawful income” constitutes an advantage of the criminal activity, with all the assets received by the defendant in the five years prior to his constitution being considered as such.

However, the guarantee imposed by the Directive, in its recital 34, that there must be sufficient facts and circumstances for the court to be convinced that the assets are the result of criminal offences, and that the assessment must be made on a case-by-case basis, is still relevant.

The Absence of a Conviction

With regard to the confiscation of property without a conviction, this can only take place, in accordance with Article 15 of the directive, if, due to the illness of the suspect or accused, their flight or death, or the expiry of a limitation period of less than 15 years after the start of criminal proceedings, it has not been possible to obtain a conviction in criminal proceedings for offences likely to generate substantial economic benefit.

Analysing the article reveals the exceptional nature of the mechanism’s application, which nevertheless raises questions as to whether it complies with the principle of the presumption of innocence, enshrined in Article 32 of the Constitution of the Portuguese Republic.

The Constitutional Court has already ruled on the possible unconstitutionality of the extended asset forfeiture institute provided for in article 7 of Law no. 5/2002, to the effect that this is not the case.

The controversial issue has been addressed in a number of rulings, in particular by arguing that, as it is a rebuttable presumption that only operates after conviction, there is no question of ascertaining a defendant’s possible criminal liability, which is presumed as of conviction. The consequence of this premise is that since the mechanism does not have the nature of a penalty, even though its purpose is recognised as criminal prevention, the constitutional principle of the presumption of innocence does not apply to it.

This understanding of the Constitutional Court, which is based precisely on the fact that the presumption established in article 7 of Law no. 5/2002 of 11 January occurs after conviction and not before, may imply that the transposition of the directive is subject to a declaration of unconstitutionality for violation of the principle of the presumption of innocence, leaving the Portuguese legislator, when transposing the directive, to take into account the delicate balance between this same principle and the effectiveness and criminal prevention that is intended to be achieved with this institute.

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