Confiscated Goods, the dark billions

Watching criminal assets

The villa in Cote d’Azur had been confiscated in 2006, but eight years later its owner, a known offender, was still renting it out on Airbnb. The story of this real estate asset is just the tip of the iceberg of a phenomenon that embraces the whole of Europe. In 2014 goods worth more than two billion euros were taken away from the hands of criminal groups in Italy, Germany, Spain, France, England and Wales. It is an amount that rises to four billion euros if we include all EU countries: each with its own legislations and languages, while mafias and criminal groups speak only the language of dirty business, which help them create an annual wealth estimated at 110 billion euros.

Drugs and arms trafficking, prostitution, fiscal frauds, rackets and money laundering are just some of the economic activities engaged in by criminals which affect the lives of European citizens and disrupt legal business operations. However, just a small share of this vast fortune is effectively taken away from crime groups through the confiscation of the proceeds of crime.

Over the last decade the European Union has started to fight back against those activities. The transnational nature of criminal investments and the presence of ‘liquid’ crime groups, which are able to adapt to different situations and overcome any legislative hurdle, required an intervention from the European authorities.

In autumn 2015 a team of journalists launched an investigation called “Confiscated Goods”, the european chapter of “Confiscati Bene”, a project of investigative journalism and civic monitoring advocating transparency on confiscated assets in Italy. The goal is to incentivize the creation of an European database of confiscated assets, which will allow a clear and timely answer to the questions of how many, where and which kinds of assets are taken away from criminals in Europe.

Confiscated assets are worth almost 4 billion euros a year in whole Europe

The data currently available Europe-wide does not allow to paint a complete picture on the matter of confiscated goods. Aside from some national information, there is a lack of stats detailing the extent to which member states are able to recover illicit assets and cash.
It is hard to estimate the true size of the criminal wealth that ends up in the control of the State. Therefore, our investigation focussed on five main European countries, each with its own peculiarities when it comes to confiscation and freezing of assets.
Overall, Italy, France, Spain, Germany, England and Wales confiscated more than two billion euros worth of assets in the last year for which the data has been made available. The number derives from the analysis of stats produced by the Assets Recovery Offices (ARO) or by national Ministries of Interior and Justice. The total value of confiscations enforced across the whole of Europe amounts to four billion euros.

Embed dataviz on your website: copy the code below!

Luxury houses, yacht and cars: how much countries manage to recover

Camorra clans prefer to invest in Spain, especially in the Andalusia region. The ‘Ndrangheta has its eyes on Germany and France, acquiring properties on the cote d'azur. But the exports are not limited to the ‘Italian Style’. Criminal groups from Britain, China and Russia as well as the biker gangs have been investing abroad to launder dirty money. According to a report by Transcrime, the hotspots of criminal investments match the areas with the largest amount of confiscated assets: in Italy, the southern regions and Lombardy; in France, the Île-de France (Paris) and the Cote d’Azur; in Spain, the Andalusia region, Madrid and the South-Eastern areas;In the United Kingdom, Greater London and the South-West of Scotland; in Germany, Berlin and Düsseldorf-Köln. A wide range of assets are confiscated. Across Europe money represents 60% of all confiscated goods; it is cash that finds its way into the public coffers or is reinvested in social initiatives. It is more difficult to extract value from a property, even more so from a company. Italy is the European country with the highest number of real estate-related confiscations: more than half of all assets. On the contrary, in Spain properties represent just one per cent of all confiscated goods: the law is designed to hurt the drug lords and the judges must prove a house has been used as a vehicle to commit a crime before it can be seized. Between 2011 and 2013 only two companies have been confiscated in France, where more than 50% of assets are real estate. An european owerview on confiscated assets: Capter 3 of Organizad Crime Porfolio (by Transcrime)

Seized luxury house for rent on AirBnb: so the moneylender mocked Italy

Between 2011 and 2013 France took away from crime groups assets and cash worth 382 million euros a year, which equate to an average of 18982 goods. At least 16% of the confiscated goods comes from drug trafficking, but it represents 60% of the value of all confiscated assets. The philosophy of the agency (AGRASC) is to take back to products of the crime to fight against the crime. Because of that, the confiscated assets are rarely reused for social purposes but rather sold at the best price. The product of the selling of the confiscated goods is divided among the agency for its functionning, French general budget and an agency fighting against drugs and addiction. Italians are the second group of foreigners hit by anti-money laundering measures in France following Algerians. Cote d’Azur, Corsica and the city centre of Paris are the preferred areas for investments. Exploiting the gaps in the law, there’s who has managed to fool both countries and carry on living in a villa that had been confiscated. We are talking about 59-year-old Giampietro Paleari from Busto Arsizio, Northern Italy, who in the past working as a loan shark had been accused of doing business with the ‘Ndrangheta. The assets that the Italian state had confiscated from him in Milan have recently been earmarked for social reuse. But his French goods enjoyed a greater impunity. Although a confiscation order had been handed down in 2006, Paleari has managed his villa in Beausoleil, Cote D’Azur, until the end of 2014. The offender had accounts on Airbnb and other tourist sites, where he shared pictures of the villa and his breathtaking views and he provided information on pricing and features. It cost up to 90 euro a night per person to stay in the luxurious house and dive into its pool. It took the French agency and the police more than a year to evict him and put the house on auction, where it would be bought by a mysterious Italian buyer for 780.000 euros. Now, according to the framework decision 2006 for the mutual recognition of confiscations, the Italian state could demand the repayment of half the value of the house.

Seized Assets by Countries

Italy

In Italy assets worth 678 million euros were confiscated in 2014. The figure represents a total of 3801 goods, including real estate, cars, plots of land; an additional 98 million euros in cash have been confiscated and transferred into the “Fondo Unico di Giustizia”. It is a fund set up by Equitalia to both the cash that is confiscated permanently and the cash that is frozen temporarily with a view to either confiscate it in the future or hand it back to the owner. The State uses the money in three ways: to reduce its public debt; to bankroll the justice system; to subsidize the fund for the victims of crimes. On the other hand, the average value of the confiscations over the last four years is one billion and 600 million Euro. According to the data of National Agency for seized and confiscated assets (Anbsc) then processed by the Ministry of Interior, between July 2014 and June 2015, about 90% of the total value of properties and companies confiscated are located in six regions, among them there are Sicily, Campania and Calabria.

Germany

The assets seized or confiscated in Germany worth 251 million euros in 2014 and 421 million euros in 2013 (data got from Bundeskriminalamt). Saxon is the region with the highest value of confiscations (165 million). In the aftermath of the Dusiburg massacre, Italian and German prosecutors stepped up their efforts to find instances of money laundering in Germany. The delayed adoption of the legal framework for the mutual recognition of foreign confiscations by Italy has slowed down attempts to put assets under lock. Nine years later Italy has amended its law with a decree approved in August 2015. The Democratic Party (PD) MP Laura Garavini, a member of the Antimafia Commission, had complained about the delays which frustrated confiscation requests - especially those concerning restaurants and pizzerias - sent by Italian prosecutors to their German counterparts.

England and Wales

In 2014 the UK, which over the last three years has boosted its judicial powers, confiscated 13255 assets with a total value of 412 million euros. This is the only data available about the confiscation system in the country. The team got hold of it through a Freedom of Information request.

Spain

In Spain the value of confiscated assets appears to be underestimated: 2.391 goods were confiscated in 2013, just over two thousand in 2014. According to an estimate made by Transcrime and University Rey Juan Carlos in Madrid, the value of assets confiscated in 2013 was around 46 million euro: almost 24 million euros in real estate, cars jewels and boats, some 22 million euros of cash. The limited data available is provided by the Plan Nacional Sobre Drogas (PNSD), which, however, wields authority only over drug trafficking and money laundering connected to the drug trade.
Get data here

Where the law on confiscation is weaker

Embed dataviz on your website: copy the code below!

The freezing and confiscation of assets and proceeds of crime has become a priority in the EU battle against organised crime. “The EU’s internal security strategy” aims to hit the criminals where it hurts the most, by taking away their money, villas and luxurious boats. Following the introduction of five legislative acts aimed at improving the confiscation and recovery of goods, in February 2014 the EU Parliament approved new rules to confiscate and freeze the proceeds of crime with 631 votes in favour, 19 against and 25 abstensions. The measures, which should be transposed by member states into national laws within 30 months, include the possibility to confiscate assets even if the suspect is not present in court eg. in absentia. Another feature introduced by the directive is the possibility to use confiscated assets for public interest or social purposes, as it already happens in Italy thanks to the Act 109/1996. The directive also provides for the possibility of an extended confiscation, in which assets are removed from criminal groups even if they are not associated with a specific crime but are deemed to constitute the proceeds of other crimes. The list includes active and passive corruption in the private sector involving officials of institutions of the Union or of the Member States, the affiliation to organised crime groups, the distribution, dissemination or transmission of child pornography and a range of cyber crimes. The directive established that every member state would have to share data on confiscated assets with the European Commission. The goal is the creation of an European database, which can help national governments shape a coherent strategy in their fight against mafia-style organisations. Getting to know the data on the investments of crime groups and on confiscation is of paramount importance. In the absence of reliable numbers, it is impossible to assess the effectiveness of the policies aimed at tackling criminal assets and promoting their use for social purposes. Additionally, in countries like France and Spain where the sale of confiscated assets is preferred, it is not always possible to measure the economic benefits of such initiatives. In all European countries there is a law on the confiscation of proceed of crime or criminal assets. In most of the EU28 there is a law on the management of seized assets. But only in ten countries, including Italy and the United Kingdom, you can also confiscate property without a criminal conviction. And only in 12 countries, the law provides a direct social reuse of goods. Get the source here Have a look also to:

European Commission - Press Release: See more

Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the freezing and confiscation of proceeds of crime in the European Union: See more