1 Forfeiture of Proceeds of Crime in the Czech Republic

1

Forfeiture of Proceeds of Crime in the Czech Republic

2The Office of the Government of the Czech Republic

Section to Coordinate the Struggle

Against Corruption

www.vlada.cz

The Office of the Government of the Czech Republic


Mgr. Milan Kryštof Čech, DBA

e-mail: [email protected]


The Czech law enables only the forfeiture of proceeds of crime in criminal proceedings

Act. No 141/1961 Sb. Criminal Procedure Codex (procedure)

Act. No 40/2009 Sb. Criminal Codex (final decision)


The general conditions for the forfeiture of property acquired offense according to the Czech law:

property was acquired by offense or as a reward for them and do not belong offender

property was acquired in exchange for property acquired by criminal offense


Detection phase

Obligation to render a thing and forfeiture of a thing - Article 78 and 79 of CPC

Securing financial means on a bank account – Art 79a of CPCSecuring financial means on an account of a saving and credit co-operative- Art 79b of CPCSecuring of booked securities - Art 79c of CPC

Seizure of real estate – Art 79d of CPC

Seizure of another asset value – Art 79e of CPC

Seizure of equivalent value – Art 79f of CPCInvestigation phase (after a particular individual is charged with a specific crime)Seizure for the purposes of satisfaction of claims of the damaged party – Art 47 of CPC

Securing the execution of the judgement of confiscation of property – Art 347 of CPC

Legal possibilities of seizure in Criminal Procedure Codex (CPC)


Punishment

Confiscation of property – Art 66 of CC

Pecuniary penalty – Art 67 of CC

Confiscation of a thing or other asset value – Art 70 of CC

Confiscation of equivalent value - Art 71 of CC

Protective measure

Forfeiture of a thing or other property value – Art 101 of CC

Forfeiture of substitute value – Art 102 of CC

Legal possibilities of confiscation in Criminal Codex (CC)


Sources of information on the property:

In the Czech Republic exist only two complete central registers of property: the Land Register - records the ownership of real estate in the country the Register of Companies - records the majority of business companies

There is no central register of bank accounts.

There is no general obligation to submit property statements which gives a chance easy compare the legal revenue and acquired property; so it always is necessary to prove that a unclear acquired property is conected with illegal (criminal) activity. Although exists central register of dematerialized securities, also exist anonymous shares.


The most common problem is efforts of offenders to hide assets or hide true origin of his property.

The amount of forfeiture assets gradually declined until 2009 when it was in 2010 developed a new methodology for searching and documenting ties between property and the offenders.


Basics of the new metodology

establishment of a central methodological workplace for whole Police by UOKFK

each police workplace which deals with the criminal investigation have a specialists who are working only in area forfeiture proceeds

include evaluation of secured proceeds in the assessment of Police Chiefs

evaluation of all investigated cases in terms of removing the proceeds of crime

evaluation judgments in which were not withdrawn secured proceeds of crime to find possible causes to have a chance improve police work


Legal and real situation requires intensive police work because we can not simply count for purposes forfeiture only the property listed in public records.

Moreover, common strategy of offenders is use „WHITE HORSE“ - fake owners real estate or business companies. It is therefore necessary to look after such things like:

as a connection offenders to the specific company through multiple firms in more levels as a minority shareholders

whether the offender or one of this firms does not pay for electricity, water or etc. in the building which has no formal relationship


For the possible forfeiture, assets has to be first finded and secured. It is the responsibility of the Police.

„Police financial investigation“ is a part of the investigation of fundamental offence, which have to detect, document and seizure of assets of crime or the substitute value for the purposes of the enforcement of punishment or satisfaction of claims of the damaged party in criminal proceedings.


Number of police experts, who deal only financial investigations

UOKFK …........…………………............. 28 officers (12 experts of Department of Tax Fraud and Money Laundering 16 financial investigators throughout other departments and branches of UOKFK (Unit Combating Corruption and Financial Crimes)

Unit Combating Organized Crime …..... 12 officers National Anti-Drug Squad ……………... 10 officers Regional Directorates (14x approx. 3 experts) .. 42 officers District Police Directorates (81 x 1-2 experts on financial

investigation) ........………………………….…128 officers

Total .…………………..………………... 210 officers


Police are authorized to carry out the preliminary securing assets, but within 48 hours about seizure of property has to decide:

during investigation – public Prosecutor during the court proceedings - Judge


The role of Police financial investigators

Performs financial investigation on a request of case responsible officer.

Actively searches cases in which should be provide financial investigation.

Carries out summary financial investigation – this process is not limited to administrative steps, it includes operational investigation, analysis, acts related to seizure, measures related to storage of seized assets.

Shares information on legal/tactical obstacles encountered while investigation.

Investigates cases of legalization of proceeds of crime. Searches for cases related to legalization of proceeds from

crime.


Seized assets - statistics 2004 – 2011 (x 1.000.000 CZK; 1 EURO = 24,915 CZK)

provisionally secured finally withdrawn

0

500

1000

1500

2000

2500

3000

2004-2005 2006 2007 2008 2009 2010 1. pol. 2011

2836

1449

736

1350 1312 1283

1944

683

1049

708

1338

10161211

1570

Zajištěnu Zůstatek po vrácení

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2004-2005 2006 2007 2008 2009 2010 2011 I. pol. 2012

2836

1449

736

1350 1312 1283

4301

2262

6831049

708

13381016

1211

3 904,0

2225

Zajištěnu Zůstatek po vrácení


Ratio damage caused by crime and confiscated property (x 1.000.000 CZK; 1 EURO = 24,915 CZK)

Year Seized propertyConfiscated property

Damage caused by all types of crime

Percentage of damage caused by crimes and confiscated property

2004-2005 2 836 683 42 984 6,6

2006 1 449 1 049 24 269 6,0

2007 736 708 22 782 3,2

2008 1 350 1 338 31 625 4,3

2009 1 312 1 016 26 012 5,0

2010 1 283 1 210 24 103 5,3

2011 4 301 3 904 27 395 15,7

I. half 2012 2 262 2 225 20 255 11,2


MagnusWeb, BIZguard

Software applications that enables to interconnect and visualize outputs from different open sources :

commercial register, trade register, insolvency register, distraint proceedings, information on securities issued in the Czech Republic, media monitor.


MagnusWeb

an extensive database of economic information. It contains data about Czech enterprises and stock market

contains information about securities issued in CZ territory, description of events related to Czech enterprises and economy

covers relevant press services includes the archive of Collection of Documents (from

Commercial Register) and a tool for financial analysis


MagnusWeb


MagnusWeb – basic inquiries

The system enables to search information on specific natural/legal person in user friendly environment


MagnusWeb – advance inquiries

Advanced inquires enable to :• depict tree-structured file,• visualize financial statements in relevant period,• print out summary overview


MagnusWeb – tree-structure

•

Summary report in tree-structured file contains: name, identification, registered seat, creation date, contact details, number of employees, annual turnout, financial statements, ownership, composition of executive bodies, auditors, customers, data from Collection of Documents, media coverage, information from the internet


MagnusWeb – Financial Statements


BIZguard

Database application that creates a graphic image of interconnection

among economic subjects in the Czech Republic. The application extracts data from

MagnusWeb database.


BIZguard – outcome example


BIZguard – outcome example


Conclusion

Also in situation when:

absent property statements, non-existent central register of bank accounts, exist anonymous shares

is possible to achieving excellent results in withdrawing the proceeds of crime,


but:

is needed to have more police specialists only for this activity,

is needed to build an effective organization of the police,

is necessary to use powerfull software tools to evaluate all the information and links it.


Thank you for your attention