Suddenly you realize that you cannot access the funds in your bank account and later learn from the prosecutor’s office that the seizure (“freezing”) is in connection with a criminal prosecution that you know nothing about and in which you are not even suspected/accused.[1] In this article, we will explain how you can effectively defend yourself insuch a situation and point out the most common mistakes made by the authorities. [2]

 

I. HOW TO DEFEND YOURSELF

You must submit an application for the cancellation or limitation of detention to the authority[3] that issued the order. If your request is rejected, you can further file a complaint. However, you can repeat the next request only after 30 days have elapsed from the previous decision.[4]

 

II. THE ECtHR AND THE CONSTITUTIONAL COURT OF THE SLOVAK REPUBLIC

The ECtHR, along with the Constitutional Court of the Slovak Republic, undertsand seizure as interference with the right of the owner to the peaceful enjoyment of property.[5] There is a general interest in seizure if there are facts indicating that the funds were an instrument or the proceeds of crime. [6]

 

III. THE CASE-LAW OF THE ECTHR

The freezing decisions may be challenged for failure to meet any of the following key requirements of the ECtHR, to which the Constitutional Court of the Slovak Republic is also inclined:

(1) Failure to provide a guarantee of effective procedural safeguards (violation of the principle of equality of arms)

In the Shorazov v. Malta case, the ECtHR expressed its concern about a seizure that lasted for 8 years during which the case was never legally examined nor were the defendent’s arguments examined.[7] The ECtHR emphasized that the seizure of funds is not legitimate in the absence of an adversarial procedure which is consistent with the principle of equality of arms.[8] The Constitutional Court of the Slovak Republic also follows up on the above.[9]

We believe that there is a violation of the right to a fair trial under Article 6 of the Convention when third parties want to defend themselves without having any access to the investigation file, having not been heard nor informed of all the facts.

Lastly, the procedure is exclusively written, which we believe is a procedural disadvantage.[10]

(2) Failure to comply with proportionality and fair balance

The authorities constantly justifying the legitimacy of detention only on the grounds which lasted at the time of the issuance of the freezing order, without any progress in the proceedings, is a violation of the requirement of proportionality and fair balance. We have encountered decisions of the prosecutor’s office that referred to the same reasoning over the entire 14 months of detention, namely the waiting of the Slovak law enforcement agencies for a response from the requesting foreign state, despite our submitting of several new pieces of evidence.

The Constitution Court of the Slovak Republic emphasizes that: with the passage of time, in addition to pursuing the public interest in detecting criminal activity, more and more attention should be paid to the protection of the fundamental rights of the person affected by the issuance of a seizure order, which applies especially in the case of a person who is not a suspect or accused in criminal proceedings.[11]

The Slovak Code of Criminal Procedure regulates a maximum period of seizure of 5 years, but we believe that this provision has no pratical impact.[12] Moreover, the authorities deciding on the seizure are not obliged to define the period of detention in the order or decision.

 (3) Failure to examine whether there are grounds for refusal of legal aid

The local authorities are obliged to examine thoroughly any serious and substantiated complaint about an obvious deficiency in the protection of rights under the Convention in a requesting state, on the basis of Article 28 of the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (hereinafter the “CE Convention“). They should examine whether there are grounds for refusing mutual legal assistance under the CE Convention, namely if the request relates to a confiscation order resulting from a decision rendered in absentia of the person against whom the order was issued and, the proceedings conducted by the requesting Party did not satisfy the minimum rights of defence. Similarly,  this would apply to requests under the United Nations Convention Against Transnational Organised Crime.

This obligation stems also from the case-law of the ECtHR. For example, it found a violation of the special review in the case of Shorazova v. Malta[13], where it ruled that the Maltese Constitutional Courts had concluded that the measure pursued the general interest automatically[14] and without a detailed assessment of the situation relevant to the case, despite the applicant continuously drawing attention to the violation of fundamental rights and freedoms in the criminal prosecution conducted in Kazakhstan.

In practice, these will mainly be requests from third countries where criminal prosecution can only be the result of political repression by the state, when there is no real accusation for a specific crime.

(4) Absence of legal conditions for suspicion of the criminal offence of money laundering

The authority can justify the seizure of funds by criminal prosecution for money laundering[15], so it should follow from the contested resolutions mainly what the relationship of the seized funds to the alleged crime is. Without such an explanation, it is not clear whether the seizure of funds was not arbitrary.[16]

The justification usually lacks a specific description of the act of the main crime, as well as the identification of a specific factual circumstance from which it was clear that the seized funds were specifically linked to the allegedly committed act.

In some cases, the only argument for conducting criminal prosecution and detention was a purely family relationship between the suspect/accused person and the owner of the seized property. In the case Uzan and others against Turkey [17] interim injunctions were imposed on the complainants on the grounds that their relatives or their managers were prosecuted. The ECtHR found it incompatible with Article 1 of the Additional Protocol, since it does not make it possible to balance the fundamental legitimate purpose and the rights of the affected parties. Finally, it noted that there was no evidence that the applicants were themselves involved in the commission of the crimes. In our view, this situation is also contrary to the fundamental right under Article 7 of the Convention (no punishment without law).

 

IV. EU DIRECTIVE ON ASSET RECOVERY AND CONFISCATION

Faced with this lack of rules protecting third parties whose assets are seized, the European Parliament and the Council adopted a new directive on asset recovery and confiscation in relation to criminal matters.[18] It sets minimum rules on tracing, freezing, confiscation, and management of assets. The new Directive recognizes that freezing and confiscation orders substantially affect the rights of suspected and accused persons, and in certain cases the rights of third parties or other persons who are not being prosecuted. This Directive should provide for specific safeguards and judicial remedies in order to guarantee the protection of the fundamental rights of such persons in the implementation of this Directive in line with the right to a fair trial, the right to an effective remedy and the presumption of innocence as enshrined in Articles 47 and 48 of the Charter.[19]

According to Article 13 of the Directive, Member States must take measures to enable the confiscation of assets whose value equals that of the proceeds that were acquired by a third party or transferred to them by a suspect, only if the national court is able to establish factually, through the specific circumstances of the case, that the third party knew or ought to have known that the purpose of the transfer or the acquisition was to avoid confiscation.

Member States must comply with the Directive before 23 November 2026, and transpose the minimum requirements set out in the Directive into their national laws. Slovakia will therefore have to create legislation that complies with the Directive within two years.

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[1] The fact that you do not learn about the seizure in advance is a standard procedure regulated by Section 95 (6) of the Code of Criminal Procedure in such a way that the order is always delivered first to the bank and only after it has been executed, i.e., only after the freezing of the bank account. This is in order to prevent the drainage of funds, which could frustrate the purpose of the criminal proceedings (ensuring confiscation and/or compensation for damages to the injured party).

[2] For the purposes of this article, we mean the decision-making activities of the ECtHR and the Constitutional Court of the Slovak Republic.

[3] In Slovakia, it may be both the respective prosecutor or judge.

[4] For more details, see Section 95 (8) of the Sovak Code of Criminal Procedure.

[5] The judgment of the Constitutional Court of the Slovak Republic I.ÚS 122/2018 of 30 January 2019.

[6] Section 95 of the Slovak Code of Criminal Procedure.

[7] In her complaints, the applicant regularly pointed out that the “accusations” against her were not genuine and therefore that no public interest had been met in this case, as well as that in the requesting State (Kazakhstan) it was exclusively a politically motivated criminal prosecution in which fundamental rights and freedoms were not guaranteed. As Malta did not thoroughly examine these facts even once during the eight years in question,  the complainant did not have the opportunity to have an effective discussion with the national authorities about the legality of the seizure.

[8] The ECtHR has observed on numerous occasions that, although Article 1 of the Additional Protocol does not contain express procedural requirements, proceedings relating to the right to the peaceful enjoyment of property must also afford the individual a reasonable opportunity to bring their case before the competent authorities in order to challenge, effectively, measures interfering with the rights guaranteed by that provision. See G. I.E.M. S.R.L. and Others v. Italy [GC], no. 1828/06 et seq., 28 June 2018, § 302, Shorazova v. Malta, no. 51853/19, 3 March 2022, § 105.

[9] See point 44 of the judgment of the Constitutional Court of the Slovak Republic I.ÚS 122/2018 of 30 January 2019.

[10] For more details, see point 49 of the judgment of the Constitutional Court of the Slovak Republic I.ÚS 122/2018 of 30 January 2019.

[11] For more details, see point  50 of judgement I. ÚS 122/2018, also point 40 et seq. of judgement IV. ÚS 51/2019, published under No. 54/2021 in the Collection of the judgments of the Constitutional Court of the Slovak Republic.

[12] Section 98a (4) of the Slovak Criminal Procedure Code.

[13] Shorazova v. Malta, no. 51853/19, 3 March 2022.

[14] The general interest in this case was seizure for the potential confiscation for the purpose of criminal prosecution on suspicion that the seized property was the proceeds of crime.

[15] In Slovakia, the crime of money laundering under Section 233 of the Criminal Code.

[16] For more details, see in particular point 46 of I. ÚS 122/2018. 

[17] Uzan and Others v. Turkey, no. 19620/05, 41487/05, 17613/08 et al., 5 March 2019

[18] Directive (EU) 2024/1260 of the European Parliament and of the Council of 24 April 2024 on asset recovery and confiscation (“Directive”).

[19] Directive, Recital 46