Kosovo takes steps to increase value of assets seized related to organized crime.

Although the criminal legislation of Kosovo regulates the confiscation of criminal assets and the proceeds of organized crime, the criminal justice system has so far produced insufficient results. The analysis of data from 2017 to 2021 reveals that €6.3 million worth of assets were confiscated in 28 cases, including trafficking in narcotics, smuggling of goods and trafficking in arms. However, the statistics also show a major discrepancy between the value of assets temporarily seized and those that were permanently confiscated. To close this gap, the government of Kosovo has taken a number of steps, including initiating the State Bureau for Verification and Confiscation of Unjustified Wealth and allowing non-conviction-based confiscation. Will these initiatives be able to increase the value of assets seized and confiscated? And following the example of other countries in the region, such as Albania and Serbia, can more be done to improve the social reuse of confiscated assets?

Discrepancy between seized and confiscated assets

The recovery and confiscation of the proceeds of organized crime deprive criminals of the profit and wealth generated from criminal activity. In theory, this should act as a deterrent to crime as it increases the risks and lowers the benefits of illicit activity. However, in Kosovo, despite relevant legislation and institutions in place, few assets have been confiscated. With the aim to increase confiscation of assets and further advance the legislation, in 2019 a law entered into force that enabled extended confiscation.

Standard confiscation is regulated by the Criminal Procedure Code (CPC), by which authorities can confiscate assets and material benefits that have been acquired as a result of the criminal offence for which the person was found guilty (see Box: Main legislative and institutional framework for confiscation of assets).¹ On the other hand, extended confiscation can be used when the CPC is insufficient; it allows the confiscation of assets that are not related to the criminal offence for which the person was found guilty. Temporary seizure is procedurally carried out at the request of the state prosecutor and with the approval of the pre-trial judge. In addition, prosecutors have the option to take investigative measures to temporarily freeze assets or issue restraining orders valid for a period of 72 hours to prevent the sale, transfer of ownership, or withdrawal from an account.²

Main legislative and institutional framework for the confiscation of assets, Kosovo.

As shown in Figure 1, the data from 2014 to 2021 reveals a discrepancy of €185.98 million between the value of assets seized compared with that of final confiscations.³ In other words, only 3.3% of seized assets were ultimately confiscated. At the EU level, the percentage is closer to 50.⁴ More importantly, although the Law on Extended Powers for Confiscation of Assets Acquired by Criminal Offence provided more resources to prosecutors,⁵ there have been no cases since the law entered into force in 2019.⁶

Between 2017 and 2021, there were only 28 confiscations out of 1 695 cases of seized assets (or 2%), as shown in Figure 2. ‘Many cases are still at different stages of adjudication, due to delay of court proceedings, reluctance of courts to issue decisions for selling assets, and lack of specialization of judges,’ according to the National Coordinator Against Economic Crime.⁷ On the other hand, a judge from the Court of Appeals highlighted the lack of evidence-based investigations and prosecution of cases based on the law on extended confiscation, as well as deficiencies in applying and correctly interpreting the relevant standards.⁸ The lack of results was stressed by independent senior experts from EU member states during the peer review mission in Kosovo on countering organized crime and corruption. The experts noted that neither value-based, third-party nor extended confiscation are used, and that there is no willingness on the part of the judiciary to make real progress.⁹

Figure 1 Discrepancy between the value of seized and frozen assets with final confiscations.

Source: Kosovo Prosecutorial Council

The highest value of seized assets was achieved in 2016, with a total of between €60.4 million and €70.4 million in assets seized in two major operations. The Office of the State Prosecutor initiated a case for the release of 65 illegally occupied properties with a total value of just under €42 million.¹⁰ On the other hand, the EU Rule of Law Mission in Kosovo (EULEX) seized 39 land parcels that year with a total value of between €15 million and €25 million.¹¹

Figure 2 Number of cases of seized, frozen and confiscated assets.

Source: Office of the State Prosecutor

Management of seized or confiscated assets

The Agency for Management of Seized and Confiscated Assets (AMSCA), as an executive institution within the Ministry of Justice, preserves and administers the seized and confiscated assets.¹² The AMSCA currently employs 26 staff; the position of General Director has been vacant since April 2021.

A 2022 report on social reuse of confiscated assets published by the GI-TOC identified several challenges in the countries of Western Balkans, some of which are particularly evident in Kosovo. These include insufficient transparency in the management and transfer of confiscated assets, and a lack of provisions to allow social reuse and cooperation with civil society.¹³ The current law does not envisage social reuse of confiscated assets for public purposes, so assets are reused by the government only for the compensation of injured parties. Moreover, the transfer of confiscated assets is not regulated by any bylaw or standard operating procedure.

The AMSCA has not yet created its website and the information provided on the ministry website is limited to basic facts, the mandate and competencies and a link to calls for auction. Until April 2022, 67 calls had been published.¹⁴ However, there is no public information available on the outcome of these auctions.

Figure 3 Seized and confiscated immovable assets in Kosovo under the management of AMSCA until April 2022.

Source: AMSCA

New developments

The lack of results on permanent confiscation of assets led the new government to initiate in 2021 a draft law to establish a State Bureau for Verification and Confiscation of Unjustified Wealth and allow non-conviction-based confiscation.¹⁵ Once operational, this would allow confiscation of unlawfully obtained assets in civil proceedings and in the absence of a criminal conviction. When the bureau during its verification procedure notices a discrepancy between income and assets of more than €25 000, it sends the case to the court for civil confiscation proceedings.¹⁶ This law would be applicable only to official persons,¹⁷ their family members, politically exposed persons and third parties, and would enable the bureau to confiscate unexplained wealth accumulated since 2008, until 10 years after cessation of their official function.¹⁸

In October 2021, the European Commission emphasized that the draft law should be in line with the constitution and fundamental rights and envisage clear safeguards against possible misuse and abuse.¹⁹ The new draft law has been scrutinized by the Kosovo Law Institute, which identified insufficient measures to ensure independence of the bureau as well as concerns regarding the provision of proof in the confiscation procedure.²⁰ The opposition parties opposed the draft law on the grounds that it violates the constitution and lacks provisions to ensure its independence from political interference.²¹ As a result, the Speaker of the Assembly, following the request of opposition parties, sent the draft law for an opinion to the Venice Commission. On 20 June 2022, the commission issued its opinion and identified a number of shortcomings that could result in infringements of fundamental rights guaranteed by the Constitution of Kosovo and the European Charter for Human Rights. Moreover, the commission argued that if the government proceeds with the establishment of the bureau, it should provide strong guarantees for the bureau’s independence, a sufficient number of specialized staff and adequate powers.²² The assembly adopted the draft law in July 2022 on the first reading. It remains to be seen how the Venice Commission’s recommendations will be addressed before the second and final approval.²³

The National Coordinator on Combating Economic Crime supports this initiative, which he views as an important piece to complete the legislative framework. However, he noted that limiting the scope only to official persons, their family members, politically exposed persons and third parties is a major shortcoming.²⁴

In parallel, the government is pursuing the establishment of a confiscation fund and has adopted the Concept Paper on Confiscation Fund on June 2022.²⁵ A government grant will be established within the AMSCA that would enable assets to be reused for social purposes and the needs of institutions, including capacity-building activities.²⁶ The initial proposal to distribute by a specific percentage the confiscation fund for compensation of victims, judiciary and law enforcement agencies, social reuse and state budget was removed from the final adopted draft.²⁷ The criteria for application and distribution of funds and assets should be regulated by the new law or bylaw which will ensure transparency and accountability as well as unbiased decision making. A GI-TOC report on social reuse of confiscated assets details some good examples in this regard from countries in the region, which could provide inspiration to Kosovo.²⁸

Steps ahead

In order to improve results, confiscation of assets needs to be prioritized, especially by the prosecution and judiciary. Prosecutors’ performance needs to be strengthened by developing and strictly implementing a system with specific targets and indicators for asset confiscation. There should also be more joint training between law enforcement agencies, prosecutors and judges. It is important that the office of the National Coordinator on Combating Economic Crime is fully staffed with representatives of law enforcement agencies in line with the regulation in order to effectively implement its mandate.

The list of seized or confiscated assets managed by the AMSCA needs to be easily accessible by the public in order to ensure transparency and accountability, especially for those assets that are sold, rented or transferred. The ongoing legislative changes could ensure social reuse of confiscated facilities and funds that would give significant support to NGOs providing shelter to victims of crime, rehabilitation of drug users, youth projects or other social services at local and national level. This could be an important step in increasing the risks and lowering the benefits of organized crime and corruption and using some of the ill-gotten gains for the benefit of society.

Notes