Criminal confiscation – a criminal policy instrument against economic crime
A main feature of financial crime is the prospect of obtaining a financial gain. It is therefore not uncommon for the perpetrator to make subsequent dispositions to cover up, and thereby secure, the proceeds obtained. For example, the perpetrator has transferred the proceeds of a serious fraud through various financial institutions, or used foreign exchange services for cryptocurrency, in an attempt to prevent the origin of the funds from being revealed. An important tool in the fight against economic crime is therefore that the perpetrators are deprived of the proceeds. This is called "confiscation".
In order to prevent crime from paying off, the Criminal Code contains rules on confiscation of the perpetrator's gains. According to Chapter 13 of the Penal Code, a distinction is made between confiscation of actual proceeds and things that have a certain connection to criminal offenses (large §§ 67 and 69), and confiscation of a financial gain that is presumed to constitute proceeds from some criminal offense (large § 68). A rule has also been introduced regarding the preventive confiscation of things, where, in contrast to other confiscations, there is no prior criminal offense (s. 70). The rules thus allow a relatively wide access to confiscate assets that originate from criminal offences.
In this article, we explain the conditions for imposing criminal confiscation, with a particular focus on access to confiscation in cases of economic crime. The homes of greatest relevance are size Sections 67 to 69, which apply to confiscation of dividends, confiscation of things and so-called extended confiscation. In particular, it is explained what requirements the law places on concretizing the underlying primary offense and on the causal link between the proceeds and the criminal act, in cases where the perpetrator is charged with fraud or money laundering. We also refer to the access to confiscation against perpetrators who have not proven guilty or lack the capacity to blame, as well as third parties who have acquired the proceeds or the thing.
Dividend forfeiture
"Proceeds" stemming from criminal offenses "shall" be confiscated pursuant to Art. § 67. In other words, it is mandatory for the courts to ensure confiscation of the dividend if the substantive conditions in the provision are met. The concept of profit is broad, and according to the draft legislation includes "any benefit obtained by the criminal act". It can be about objects, money, receivables, wages and savings or assets that constitute a surrogate for the dividend. The requirement of causation is therefore not an obstacle to confiscation of assets that replace the original dividend, or of returns or "other benefits" the perpetrator has obtained as a result of the dividend.
Dividend confiscation according to size Section 67 is aimed at "proceedings of a criminal offence". In other words, there is a requirement of a causal link between the dividend and the criminal offence. As emphasized by the Supreme Court in HR-2022-1178-A, it is "plain that the courts must, in this assessment, take the criminal offense to which the indictment relates as a starting point". The Supreme Court clarifies that it is still not clear from the wording "how strict the requirement is, nor how the assessments are to be made". The Supreme Court thus assumed that "there must be an actual causal connection". This means that the criminal offense must have been "a necessary condition" for the dividend obtained. The causal chain must nevertheless be delimited "according to a broad overall assessment», out of consideration for the purpose behind the confiscation rules, the penalty, the purpose of the criminal offense and other concrete circumstances.
The fact that it is the proceeds of "a criminal act" that must be confiscated means that there is also a requirement that the primary offense from which the proceeds originate must be specified. As a clear general rule, it is not enough to provide evidence that the dividend originates from some criminal offence. The condition that the prosecuting authority must identify the primary offense is based on the consideration of the confiscation subject's legal certainty. It constitutes a basic principle in the administration of criminal justice that the prosecution has the burden of proof, and that every reasonable doubt benefits the accused.
Confiscation of things
Furthermore, "things" which "have been produced by, have been the subject of or have been used or intended for use in a criminal offence" can be confiscated pursuant to Art. Section 69. The provision applies to any form of movable property, as well as rights, claims and electronically stored information. According to case law, the concept of thing also includes immovable property.
Another prerequisite for confiscation is that the thing is covered by one of the alternative conditions in the first paragraph letters a to c. Letter a applies to "things that are produced by" the act. In this there is a requirement that the thing is generated by the criminal act. In other words, a requirement of causation is established. The perpetrator has, for example, produced home-burned or forged banknotes.
According to letter b, the thing must have "been the subject of" a criminal offence. This could, for example, involve confiscation of a boat that has been the subject of an insurance fraud. Although both the draft legislation and the text of the law advocate that objects that have been the subject of a criminal act can be confiscated in accordance with letter b, the Supreme Court has assumed that confiscation is carried out in accordance with srl. Section 67 in such cases. In HR-2018-578-U, such confiscation was nevertheless carried out on the basis of § 69 (1) letter c. This illustrates both that the use of the authority is not necessarily consistent, and that there is a smooth transition between letter b and c.
Letter c applies to things that "have been used or intended for use in a criminal offence". In other words, a certain connection between the thing and the criminal act is required. For example, a bus is used for human trafficking. Supreme Court practice nevertheless advocates that a claim cannot be made that the thing was a necessary condition for committing the infringement. An illustrative example is Rt. 1995 p. 360, where the court found that the car used by the convict to travel to and from the place where the offense was committed "was so central to the possibility of committing this act" that the car had been used in a criminal act. According to the Supreme Court, the case was still "at the edge of the scope of the provision".
Unlike confiscation of dividends, confiscation of things is based on the discretion of the courts. In the assessment of confiscation to be made, and the scope of the confiscation, "particular emphasis must be placed on whether confiscation is required for the sake of effective enforcement of the penalty order, and whether it is proportionate. When proportionality is assessed, emphasis shall be placed, among other things, on other reactions that are imposed, and the consequences for the person against whom the confiscation is directed", cf. third paragraph. The assessment theme in the third paragraph implies that confiscation according to the provision can easily take on the character of retaliation and blame, despite the fact that the confiscation requirement should initially have a restorative and preventive effect on the subject of confiscation. The reaction is also not classified as punishment in Norwegian law, but as a criminal reaction. An illustrative example is the decision in HR-2021-2249-A, where a boy who was under the age of criminal responsibility at the time of the crime had his mobile phone confiscated with a warrant in Section 69 (1) letter c. The boy had used the mobile phones to forward nude pictures of a girl of the same age to two friends. In assessing whether confiscation should be carried out, the Supreme Court took as its starting point what had been stated in a Supreme Court decision on punishment for spreading offensive images. The Supreme Court assumed that the general preventive considerations also applied in this case. Confiscation would both act as an individual preventive measure as a tangible reaction for the boy, and have a deterrent effect among the youth community.
Confiscation upon conviction for forgery and money laundering
The requirement that causation be demonstrated and that the primary offense be specified has certain implications for access to confiscation where the perpetrator is accused of fraud or money laundering. As mentioned at the outset, the perpetrators will often try to conceal the origin of the dividend. This can happen in several stages, through so-called chain laundering or chain healing. In such cases, it can be very demanding or almost impossible for the prosecuting authority to provide evidence of which specific criminal act has generated the dividend.
Against this background, it has been discussed whether an exception to the specification requirement can be drawn up in the event of a breach of the penalties for fraud and money laundering. The Supreme Court has dealt with the issue in a number of decisions. Although the Supreme Court's understanding of the law seems to be somewhat debated, the dominant opinion is that an exception to the specification requirement can be drawn up both where the indictment concerns fraud and money laundering. In HR-2021-987-A, on the other hand, the Supreme Court has expressed that an exception cannot be drawn up from the specification requirement in size § 67 where the perpetrator is charged with self-laundering. The Supreme Court's reasoning seems to be that the penal provision against self-laundering presupposes that the primary offenses have been identified, so that the condition that the self-launderer "himself" has committed the primary offense is fulfilled.
The Supreme Court has also interpreted an exception to the requirement of causation where the indictment relates to a breach of the penalty clause for lechery. The Supreme Court's practice can also be interpreted in the direction that it applies to certain modifications to the causation requirement in prosecutions for self-laundering of profits stemming from a primary offense committed by the self-launderer. This means that there is no obstacle to confiscation pursuant to Art. § 67 that the dividend is in reality generated "by" the underlying primary action, and not by the healing or self-washing action. As the state of the law stands today, however, there does not seem to be a basis for a corresponding exception from the cause requirement for confiscation of laundered dividends.
Confiscation against persons without guilt or capacity for guilt
Confiscation pursuant to Art. §§ 67 and 69 can take place "even if the offender lacked the capacity to blame according to § 20, or did not show guilt". The legal text is thus based on the fact that confiscation can be imposed on a purely objective basis. This has given rise to a discussion in legal theory about whether the provision's exemption from the requirement of guilt is compatible with international obligations under the European Convention on Human Rights. The Supreme Court has assumed that practice from the European Court of Human Rights "can hardly be understood as preventing the use of certain objective conditions of criminality". As the Supreme Court interprets the court's statements, there are nevertheless certain bars set up to impose punishment on a purely objective basis. It can therefore be argued that confiscation according to srl. Sections 67 and 69 must be carried out in accordance with the guarantees of legal certainty set out by the Human Rights Court in the decision Salabiaku v. France. According to the Supreme Court, this means that a proportionality assessment must be carried out, where the accused's right to defend himself constitutes a central element.
The Supreme Court has also established that practice from the European Court of Human Rights does not prevent confiscation of persons without guilt. This was taken as a basis by the Supreme Court in the above-mentioned decision in HR-2021-2249-A. Based on the court's practice, the convention states have a wide margin of discretion when it comes to requirements for criminal culpability. This means that it will not be contrary to the Convention to impose confiscation on persons who were insane at the time of the crime. The same applies to children who were under the criminal minimum age at the time of the act, for example where young people are exploited by criminal circles to possess and transfer proceeds from criminal offences. Another issue is that confiscation against persons without culpability is associated with certain legal certainty concerns.
Confiscation against acquirers
According to size Section 72 (1), confiscation can be made against acquirers of "dividends" or "things" under certain conditions. Firstly, dividends must be "transferred from someone against whom confiscation can be made". Secondly, it must be a "gift" or that "the recipient understood or should have understood the connection between the thing transferred and a criminal offence". The Justice Committee has in Inst. 159 L (2021-2022) clarified that the negligence does not need to include the specific criminal offense from which the dividend originates. The provision is important to prevent the perpetrator's money laundering or pro forma transfers from being an obstacle to confiscation. If the person who has received the dividend or thing did not understand or should have understood that the dividend stemmed from some criminal offence, it is nevertheless an obstacle to confiscation pursuant to Art. §§ 67 and 69. The perpetrator has, for example, transferred part of the dividend to a person who neither has nor should have had knowledge of the origin of the funds, as payment for renting a holiday apartment in France.
Extended confiscation
Another authority for confiscation of dividends is included in srl. § 68. The provision extends the access to confiscation for more closely defined cases. In contrast to after size §§ 67 and 69, the law specifically addresses confiscation "without it being demonstrated which criminal act the proceeds originate from". An extended access to confiscation is justified in the interest of making the measures against organized and other crime with large profit opportunities more effective, in that the lack of evidence for the primary offense is not an obstacle to confiscation. In contrast to after size Section 67, however, it is up to the court's discretion whether the allegation of the confiscation claim should be upheld. As a general rule, the courts must nevertheless make full use of the access.
Extended confiscation requires that two basic conditions are met. Firstly, the perpetrator must have committed a criminal offense that falls under the penalty framework specified in letter a to c. According to letter a, it is required that the penalty for the criminal offense or offenses for which the person is found guilty, "collectively may result in a penalty of imprisonment for 6 years or more”. It is often referred to as a requirement that there must be a "trigger offence" of a certain degree of severity. Secondly, the perpetrator must be "found guilty of a criminal offense which, by its nature, can yield significant profits". In contrast to after size § 67, it is not required that a dividend has actually been obtained, provided that there is "a general probability of a significant dividend", cf. Rt. 2003 p. 897. The Supreme Court has assumed that the assessment is based on the threshold that applies for an infringement to be serious. In HR-2020-2442-A, the Supreme Court found that it is the dividend potential by the specific criminal offense to be assessed against the aforementioned threshold.
Extended confiscation shall primarily be carried out against persons with a "criminal lifestyle", including "persons who have a high personal consumption and dispose of values that seem inexplicable on the basis of the income they declare for taxation". This is a relative requirement, where stricter requirements are set for the degree of a criminal lifestyle where the confiscation requirement includes all or part of the assets. If the reaction is more modest, however, a concrete suspicion is enough. The Supreme Court has nevertheless stated that the courts should exercise caution with regard to the extent of confiscation outside the primary target group.
Provided that the material conditions are met, the access to confiscation is very broad. According to the text of the law, "one, more or all of the offender's assets can be confiscated", unless the perpetrator proves that they have a legal origin. The provision operates with a reversed burden of proof, unlike in other cases of confiscation. The consideration of effective confiscation thus seems particularly prominent under this confiscation authority.
