The confiscation of assets in both criminal and civil proceedings is necessary to help prevent and fight fraud. As a result, victims of fraud have a chance of their stolen assets being returned to them, or financial compensation being paid by the fraudster.
Additionally, asset confiscation helps authorities to limit the damage to the local economies where crimes have been committed, and/or from where any assets have been stolen.
Keep reading to learn more about the importance of asset confiscation.
What Exactly Does ‘Asset Confiscation’ Mean?
Asset confiscation, or asset forfeiture, refers to the legal process of confiscating assets or property that are linked to criminal activities.
This can mean assets that were stolen, instruments that were used to commit a crime, or assets that exist as a result of a crime, i.e. the proceeds.
Asset confiscation will be ordered by a court or legal administration when it is deemed appropriate and will place the assets under temporary ownership of the authorities until a final judgment has been reached in the respective criminal or civil proceedings.
Value-based asset confiscation
This is a method used by courts to issue asset confiscation orders to a certain value, once it has been determined what profits or benefits were gained by a wrongdoer as a result of a respective crime.
For more information about which crimes can result in asset confiscation in Spain, see this article.
How Does it Work?
Here’s what needs to happen to enable effective asset confiscation:
1. Asset Tracing
First of all, assets associated with a suspected crime need to be identified and traced, to ensure there are existing assets to be confiscated.
2. Asset Freezing
Asset freezing, i.e. the temporary holding of any respective assets, happens after the asset tracing process. This is to ensure they cannot be removed, hidden, or destroyed, ahead of a final judgment.
3. Asset Recovery
If the final judgment goes against the accused, asset recovery refers to the process of final confiscation and the returning of any stolen assets to the victim(s).
Important Note: If no victim has been identified, any assets recovered may be used to help finance the State’s efforts to fight crime, and/or to compensate victims of other crimes.
Conviction-Based Vs. Non-Conviction-Based Asset Confiscation
Conviction-based asset confiscation is an ‘in personam’ order, which means it is an action against a person.
A criminal trial and conviction will be necessary before asset confiscation by the State can be ordered.
Non-conviction-based asset confiscation, on the other hand, can happen without the wrongdoer being convicted.
Also known as civil forfeiture, this form of confiscation is an action against the asset itself and still requires proof that the asset in question is associated with a crime.
Asset Confiscation in Spain
For more information about asset confiscation in Spain, contact the team of specialist litigators at Lawants.
Articles you may also be interested in:
- Asset Tracing, Recovery and Fraud in Europe: The Main Differences Between Common Law and Civil Law
- The Mutual Recognition of Freezing Orders in the EU: What You Need to Know About Regulation 2018/1805
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