In the case of AGRO IN 2001, a Bulgarian judge asked the CJEU whether under EU law he could lawfully order the confiscation of the assets of persons on account of criminal offences – embezzling of funds – the same persons had been charged with in criminal proceedings which were still pending. The CJEU ruled that the relevant legal instrument, Framework Decision 2005/212 on the confiscation of crime-related proceeds, instrumentalities and property (“the FD”), was not applicable in the present case, since the scope of the FD was limited to criminal proceedings, whereas under Bulgarian law the confiscation proceedings at stake were civil proceedings. Consequently, EU law did not preclude such confiscations.
What is somewhat striking about this ruling is that at no point the CJEU seems to have asked the question whether those confiscation proceedings, classified as civil under Bulgarian law, were not in fact criminal in nature, with totally different consequences, as is indeed suggested by the recent case-law of the ECHR in the case of G.I.E.M. S.R.L. and Others v. Italy (28.6.2018), which concerned a similar problem, i.e. confiscation measures applied without prior formal conviction for unlawful site developments.
In the latter case, rather than the formal approach based on domestic classifications, followed by the CJEU, a Grand Chamber of the ECHR went for a substantive approach guided by an autonomous interpretation of the relevant notions. Applying Article 7 of the Convention, which precludes the imposition of a penalty without a prior formal declaration of liability, the ECHR had to determine whether the impugned confiscations amounted to such a penalty. It thereby ruled that the domestic characterisation of confiscation measures or proceedings was, as such, not decisive in determining whether they were criminal or not. Rather, other criteria, such as the nature and purpose of such measures as well as their severity had also to be taken into account. The ECHR stated in particular:
The Court concludes that the impugned confiscation measures can be regarded as “penalties” within the meaning of Article 7 of the Convention. This conclusion, which is the result of the autonomous interpretation of the notion of “penalty” within the meaning of Article 7, entails the applicability of that provision, even in the absence of criminal proceedings within the meaning of Article 6. Nevertheless, … it does not rule out the possibility for the domestic authorities to impose “penalties” through procedures other than those classified as criminal under domestic law. (§ 233)
Consequently, such confiscation measures being criminal in nature, despite their different characterisation under domestic law, they could not have been lawfully ordered without a prior formal declaration of liability. This could also have been the answer under Convention law to the question asked by the referring court in the present case before the CJEU.
Had the CJEU adopted a similar, more substantive approach in determining the notion and scope of civil and/or criminal proceedings for the purpose of the FD, it could have extended the scope of the FD so as to cover the “civil” confiscations at stake, thereby allowing the safeguards relating to the protection of fundamental rights (Art. 4 and 5 of the FD) to apply in the present case. Instead, it would appear that in a case like this, only the Convention can help.