Recently, with the intensification of the fight against money laundering, the volume of orders issued by the Financial Intelligence Unit on the freezing of financial resources has increased significantly. Most of all these activities have affected foreign individuals and legal entities, whose financial resources were frozen in accounts opened in Latvian credit institutions. Mostly, the above-mentioned orders resulted in the criminal proceedings on the legalization of criminally acquired financial resources, within which mentioned financial resources have been seized.
During the subsequent criminal procedure, a situation may arise when a separate process on criminally acquired property is separated from the initiated criminal process, and the seized funds are confiscated in the pre-trial proceedings in accordance with the provisions of Chapter 59 of the Criminal Procedure Law. However, concerns arise in cases where confiscation of the presumed criminally acquired property is initiated, but not the proven properly.
There is no disagreement between specialists of criminal law and law enforcement officers regarding the fact that, in accordance with Chapter 59 of the Criminal Procedure Law, it is possible to confiscate proven criminally acquired property (the first part of Article 7011 of the Criminal Law), since there is no doubt about its criminal origin, as the fact of predicative crime has been established. However, with regard to presumed criminally acquired property (the second and third parts of Article 7011 of the Criminal Law), there has not always been a unified understanding and consistent application in practice. Nevertheless, at present, specialists of criminal law unanimously admit that it is impossible to confiscate presumed criminally acquired property under the procedure provided in Chapter 59 of the Criminal Procedure Law.
For the application of the presumption and recognition of property acquired by criminal means and, accordingly, confiscation, first and foremost it is necessary to determine that the person (whose property is planned to be confiscated) has committed a crime which in its nature is focused on the gaining of financial or other kind of benefit, or who maintains permanent family, economic or other kind of property relationships with this person. So, it is necessary to prove the guilt of a person in a committed crime, and this can only be done by considering the criminal case on the merits, and not in a special process in accordance with Chapter 59 of the Criminal Procedure Law. Thus, the property that is subject to arrest in such a criminal proceeding can be recognized as criminally acquired, and can be confiscated only with a final judgment about conviction.
The question remains how the property issues will be resolved in the criminal process when the maximum term of the arrest of property specified in Article 389 of the Criminal Procedure Law comes. One of the possible solutions may be the sending of information by the Latvian investigative institutions to the relevant foreign investigative institutions and in a foreign state a criminal proceeding about a crime (predicative offense) are initiated, for example, about tax evasion, which can be used as a basis for the confiscation of property in an initiated criminal proceeding on money laundering in Latvia. The second decision may be the transfer of the criminal case to the court for consideration on the merits, before the maximum term of the arrest of property specified in Article 389 of the Criminal Procedure Law comes, thus subjecting the property to confiscation simultaneously with the proof of the person’s guilt in the committed crime. It remains to be seen what will be the further actions of the Latvian investigative and law enforcement institutions.