Asset Forfeiture as a New Tool in the Fight Against Organized Crime

In February of this year, a new government bill on the forfeiture of assets of unexplained origin was submitted to the Chamber of Deputies. This legislation aims to introduce special measures into Czech law for the confiscation of assets with suspiciously unclear origins. The goal is to prevent situations where the state is forced to return seized assets despite strong suspicions of their criminal origin, simply because a specific crime could not be proven or a perpetrator could not be convicted.

The "Evidence Gap" Challenge

In practice, there are recurring cases where assets are seized during criminal proceedings because authorities believe they were likely obtained through crime. However, due to a lack of evidence necessary to prove a specific criminal act and achieve a conviction, these assets cannot be forfeited and must be returned. A typical example is the use of "flow-through" or transit accounts, which are used to relay funds—very likely originating from criminal activity—across borders.

Implementation of EU Law

The bill incorporates new European regulation: Directive (EU) 2024/1260 of the European Parliament and of the Council of 24 April 2024 on asset recovery and confiscation (the "Directive"). The Directive obliges Member States to enable the confiscation of unexplained wealth linked to criminal activity even without a prior criminal conviction. The Czech Republic (along with other EU countries) is required to implement this Directive by November 23, 2026.

Key Innovation: The Forfeiture Measure

The central innovation of the proposal is the adoption of the "forfeiture measure" (odčerpávací opatření)—a new legal instrument for the seizure of assets of illegal origin. A court may impose this measure on assets seized in original criminal proceedings if:

1. Their legal origin has not been credibly and verifiably documented.

2. The court (after considering all circumstances) believes the assets originate from criminal activity.

Forfeiture of assets of unexplained origin thus requires neither a prior conviction of a specific perpetrator nor proof of a link to a specific crime. This is a so-called "in rem" proceeding—a procedure focused on the nature of the property itself, rather than the guilt of a specific individual. The standard of proof for a court decision is set lower than in standard criminal proceedings: it is sufficient for the court to be convinced that the assets likely originate from criminal activity if no more credible explanation for their legal origin is available.

Procedural Aspects and Limits

Forfeiture proceedings will follow previous criminal proceedings. A motion may be filed exclusively by a public prosecutor, and only if:

• Assets worth at least CZK 1,000,000 were seized in the original criminal proceedings (or a lower value if the activity involved an organized crime group).

• The prosecutor believes, based on established facts, that the conditions for forfeiture are met.

The forfeiture measure cannot be imposed automatically. Even if the origin is unclear, confiscation cannot be ordered in violation of the principle of proportionality or the protection of third parties. For instance, confiscation will not be ordered if the specific property can be returned to an original victim, or in the case of assets acquired by a person other than the perpetrator for consideration and in good faith.

Judicial Process

The special forfeiture proceedings will be conducted by the same court (at the first instance) that handled the original criminal case. The motion must be filed within 90 days of the final conclusion of the original criminal proceedings. The public prosecutor acts as the petitioner against the "affected person" (typically the original accused or the owner of the seized property), who holds procedural rights similar to an "interested party" in criminal proceedings.

The court's decision takes the form of a resolution (usnesení), against which an interlocutory appeal (stížnost) with suspensive effect may be filed; however, a supreme appeal (dovolání) is not permitted. Forfeited assets accrue to the state.

Objectives and Controversies

The proposed norm expands the range of tools against organized crime, money laundering, and other forms of serious criminality. It would allow the state to more effectively intercept illegally acquired assets, preventing criminals from further enrichment or the financing of crime. The measure is also intended to act as a deterrent, discouraging potential offenders from hiding criminal proceeds in the hope they will be returned unpunished.

However, the proposal carries risks and controversies. Critics point to the significant impact on constitutionally protected property rights. Forfeiture could occur even for individuals who were never convicted or even prosecuted—i.e., without proven unlawful conduct by a specific individual. Some argue that the protection of "honest" third parties is insufficient, failing to protect heirs or donees who may lose fortune despite having no way to verify its original source.

This text was translated by AI.