CYIL vol. 14 (2023)

NIKOLA KURKOVÁ KLÍMOVÁ CYIL 14 (2023) location of misappropriated property is, nevertheless, only the first step in asset recovery as their potential confiscation in criminal proceedings depends on their link to the investigated criminal activities. In this regard, the law enforcement authorities must gather evidence not only on the proprietary title of the suspects to the illicit assets but also the illegal origin of such assets. 11 While securing direct evidence is often challenging, the illegality of assets can be equally established by indirect methods through circumstantial evidence which would, for instance, prove that the person under investigation had higher spending than their lawful income. 12 Although the standard of proof for freezing and seizing assets is usually less stringent than for the final conviction, the absence of concrete information on any criminal ties would present an insurmountable bar for issuing a freezing or seizure order by the competent authorities. 13 The incorporation of asset freezing and seizure into national legal frameworks was originally guided by the need to deprive organized crime groups of illicitly obtained assets and prevent their further laundering or reinvestment. As the role of victims of serious crimes grew increasingly important though, freezing and seizing of assets did not fulfil only preventive and repressive function but became also one of the core restitutory instruments for redressing material and immaterial harm. 14 Its reparation requires that frozen or seized assets are adequately secured throughout the entire criminal proceedings. By their nature, freezing and seizure orders are thus temporary operational tools which either suspend the rights over fungible assets or restrain and put in custody their non-fungible counterparts before a decision on permanent confiscation. While both freezing and seizing orders share a common goal of preventing any movement of illicit assets, their enforcement differs based on the class of property to be administered. 15 Unlike bank deposits, securities or cryptocurrencies, some physical assets may be prone to losing their value over time and their long-term retention in such a form would generate substantial costs which can be avoided where these assets are converted into more liquid ones. In the end, efficient asset recovery is largely dependent on close cooperation of all public authorities involved. Similar challenges are encountered in the process of freezing and seizing assets of individuals or entities who have been listed as subjects targeted by unilateral sanctions. Although the rationale for imposing such restrictive measures is rather related to political and security considerations of States, the repercussions for the disposal rights of owners are largely aligned as they are equally disqualified from making any transactions with frozen or seized assets without prior authorisation by relevant authorities overseeing the enforcement of sanction policies. This limitation, however, applies only for a provisional period of time as without parallel criminal investigation, the frozen or seized assets must be returned to the original holders once they are removed from the sanction lists. In the context of the Ukrainian war, the EU has already engaged in several legislative initiatives to amend this regime which would newly allow for confiscation of frozen and seized assets owned by Russian nationals and their redistribution to the victims of the Russian aggression in the form

11 BRUN et al. (n 8), p. 76. 12 MONTEITH and DORNBIERER (n 10), p. 11. 13 BRUN et al. (n 8), pp. 60–61. 14 LIGETI and SIMONATO (n 7), p. 2. 15 BRUN et al. (n 8), pp. 168–176.

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