The Council of Europe’s Warsaw anti-money laundering and counter-terrorism financing convention committee has called on its States Parties to effectively apply the reversal of the burden of proof regarding the lawful origin of alleged proceeds or other property liable to confiscation in serious offences.
In a report released today, the Conference of the Parties of the Council of Europe’s Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism evaluates the extent to which 34 States Parties have legislative or other measures in place for the burden of proof to be reversed, a possibility provided for in Article 3 (4) of the treaty.
The reversal of the burden of proof intends to increase the effectiveness of confiscations by requiring the perpetrator to demonstrate the origin of particular proceeds or other property liable to confiscation.
The report contains several general recommendations to the States Parties on the implementation of this article of the treaty as well as country-specific recommendations.
Sixteen countries have so far committed to applying Art. 3 (4): Albania, Armenia, Belgium, Bosnia and Herzegovina, Croatia, Cyprus, Denmark, France, Hungary, Latvia, Malta, Montenegro, the Netherlands, North Macedonia, Portugal and Serbia. However, the way these countries implement its provisions differs significantly. The majority apply it through extended confiscation in criminal proceedings, which allows confiscating assets that go beyond the direct proceeds of a concrete criminal offence for which the defendant is being prosecuted.
Eight countries have made a declaration not to apply – fully or partially – Art. 3 (4), and do not apply it in practice: Azerbaijan, Bulgaria, Greece, Republic of Moldova, Romania, Slovakia, Sweden and Turkey. Another seven countries have made such declarations but have in place measures to reverse the burden of proof through legislation or have jurisprudence of their courts: Georgia, Germany, Italy, Poland, Russia, Slovenia and Ukraine.
The Conference of the Parties encourages these states to reconsider their declarations that they will not apply this article of the treaty, particularly those already applying its principles in practice.
With regard to three countries – Monaco, San Marino and Spain – the Conference of the Parties finds that they have systems that feature some elements of Art. 3 (4) but regrets that their legislation or their jurisprudence do not implement its principles satisfactorily. It, therefore, encourages them to fully comply with its provisions.
The Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (CETS No. 198) (the “Warsaw” Convention), opened for signature in 2005, is the first international treaty covering both the prevention and the control of money laundering and the financing of terrorism.
It is the only international treaty that gives national authorities the power to halt suspicious transactions at the earliest stage to prevent their movement through the financial system. In addition, specialised Financial Intelligence Units (FIUs) of member-states must halt such transactions whenever requested by a foreign partner FIU.
The Conference of the Parties monitors States Parties´ compliance with this convention.