ZV and others

On 28 October 2021, the Third Chamber of the Court rendered a judgment in the context of judicial cooperation in criminal matters concerning the confiscation of assets obtained illegally in the absence of a criminal conviction.

ZV was charged with having, as a public official of Bulgaria, acted beyond the scope of her powers in the context of her studies in order to obtain economic benefits for herself or for a company in which she was a majority shareholder at the time of the charges. The criminal proceedings are pending in front of a military jurisdiction in Sofia. The Commission for the confiscation of assets opened an investigation concerning ZV, in accordance with Article 22 of the 2012 Law on the confiscation of assets. The said Commission found that there was a ‘significant discrepancy’ between the assets of ZV and her husband and their income. Consequently, on 18 January 2017, it lodged a request before the referring court seeking confiscation in favour of the State of assets illegally obtained by ZV and by natural and legal persons considered to be associated with ZV or being under her control.

The defendant argues that such request was not compatible with Directive 2014/42 claiming that it also applies to non-criminal matters and was badly transposed in Bulgaria, especially considering the fact that the national law at issue does not provide for procedural safeguards in the context of the confiscation of assets obtained illegally. First, the referring court states that the 2012 Law on the confiscation of assets provided expressly in its Article 2 that confiscation proceedings brought before a civil court do not depend on criminal proceedings launched against the person concerned by the investigation or persons associated or controlled by that person. Under national case law, the mere fact that a person is under criminal charges is enough to open an investigation against that person.

The referring court in Sofia thus requested the Court of Justice , first, whether the confiscation of illegally obtained assets constitutes a punitive measure for the purposes of Directive 2014/42 or a measure under civil law; and secondly, whether national law is compatible with the rights enshrined in Articles 48 and 17 of the Charter. The referring court also put questions regarding the interpretation of several provisions of this Directive provided, though, that this applies to confiscation of non-crime related intrumentalities and proceeds.

Regarding the first question, the Court of Justice calling upon the legal bases of Directive 2014/42, which are both Articles 82(2) and 83(1) TFEU – that confers on the EU the competence to establish minimum rules on criminal matters – held that this Directive aims at obliging Member States to establish minimum rules for confiscation of crime-related instrumentalities and proceeds, in order to facilitate the mutual recognition of judicial confiscation decisions adopted in criminal proceedings. Therefore, Directive 2014/42 must be interpreted as not applying to legislation of a Member State which provides that confiscation of illegally obtained assets is to be ordered by a national court in the context of or following proceedings which do not relate to a finding of one or more criminal offences.

The Court further decided to decline answering the second, third, fifth and seventh questions concerning the interpretation of certain provisions of the Directive at hand in view of the answer given to the first question.

Last, with regards to the fourth and the sixth question, the Court of Justice ruled that the Charter did not apply to the dispute, as the confiscation procedure at issue does not fall within the scope of Directive 2014/42, with the result that the national law governing that procedure cannot be regarded as implementing EU law, and thus the Court did not have jurisdiction to reply to these questions.