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State Judiciary Failing to Seize Illegally-Acquired Assets

27. November 2017.13:28
Over the past 18 months, Bosnian state judicial bodies have still not yet found efficient ways to confiscating illegally-acquired assets acquired from people convicted of organised crime.

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The state court and prosecution, which are in charge of processing most serious organised crime cases, say there are problems with the confiscation of illegally-acquired assets such as property, cash and other possessions – even from people convicted under second-instance verdicts.

While some observers believe this is caused by the lack of a state-level law to aid the confiscation of illegally-acquired assets and an agency for managing the confiscated assets, others believe that the process is being hampered by the fact that the Bosnian Public Attorney’s Office has ended its involvement in the seizure process.

The Bosnian state court told BIRN Bosnia and Herzegovina that it has been handling the process of the enforced seizure of confiscated assets ex officio after the Public Attorney’s Office unilaterally ended its involvement in the enforcement procedure.

“The aforementioned decision by the State Attorney’s Office represents a complicating circumstance in the process of the efficient execution of second-instance criminal verdicts in their entirety,” the state court explained.

“The court has warned about this issue several times in letters it has sent to the relevant institutions,” it added.

The state-level Public Attorney’s Office declined to answer questions about its actions in the matter.

Mechanisms for the retrieval of illegally-acquired assets from convicts are regulated by the Law on Criminal Proceedings, the Law on Execution of Criminal Sanctions and Law on Enforcement Procedure.

The state court says that in most cases, convicts do not possess assets that could be seized, so instead their movable property (ie. possessions) is seized from their registered home addresses. Once the verdicts in their cases have become final, the seizure orders are submitted to municipal and basic courts for execution.

“The situation could be prevented to a significant degree by timely action from the Bosnian state prosecution in terms of the collection of information about property owned by suspects and defendants,” the state court said.

Proposals for measures to temporarily seize assets during trials on a regular basis are also needed, the court added.

The state prosecution says that assets owned by defendants in organised crime cases can be temporarily seized during the course of a trial and then confiscated when a verdict is handed down.

The prosecution says that, in some cases, property worth several million Bosnian marks has been temporarily seized and confiscated, and the confiscation of buildings, vehicles, land and money has been ordered in court verdicts.

The court argues however that the prosecution needs to use the temporary seizure measures more widely, to ensure that criminals do not continue to enjoy the use of ill-gotten assets while awaiting verdicts.

New state agency needed

The state court said it does not have exact data on the value of assets it has confiscated so far, as the number of verdicts on the basis of which enforcement procedures are initiated keeps changing from day to day.

A report on the work of the Bosnian state prosecution in 2016 indicates that illegally-acquired property worth more than 14 million Bosnian marks was confiscated that year, but the report did not explain whether this referred to second-instance verdicts.

The largest haul was confiscated from Mladjen Kekerovic, who was sentenced to 13-and-a-half years in prison for organised crime. The seizure amounted to 3.9 million Bosnian marks. Buildings and land as well as money were confiscated from Kekerovic.

Apart from the Kekerovic case, there have only been a few incidences in which the value of the confiscated assets exceeded 100,000 Bosnian marks. The sentences in these cases, which all related to tax evasion, were handed down on the basis of plea bargains.

The state prosecution said that Milenko Nizic, who was given a suspended sentence for tax evasion, is the only one apart from Kekerovic from whom such a large amount was recovered – a total of 100,000 Bosnian marks. The money was returned to the state budget, settling Nizic’s tax debts.

The state court said that nothing has changed over the course of the past year and a half in terms of the enforcement of verdicts calling for the confiscation of illegally-acquired assets, primarily due to the decision of the Public Attorney’s Office to stop taking part in the seizure process.

But the prosecution said that the lack of a state-level agency to manage the illegally-acquired assets is causing difficulties.

“A working group, composed of representatives of the Bosnian state prosecution and court, is currently working on finding a modality for managing the confiscated assets,” the prosecution said.

Eldan Mujanovic of the Criminal Policy Research Centre argues that, at the state level, the problem lies in the fact that the law does not clearly specify who confiscated assets belong to and who becomes their owner after confication.

The state Criminal Law and the Law on Criminal Proceedings contain only a few provisions on the confiscation of assets, in Mujanovic’s opinion.

Bosnian state level regulation is inadequate because although prosecutors and courts are given a way to confiscate assets, the exact procedure, what to do with the assets and whose they become once taken is unclear, he argued.

“Each and every international standard specifies that ‘this area should be comprehensively regulated’. In other words, this means that all possible aspects should be covered. This does not only include the criminal aspects, but also the civil, executive, administrative aspects,” Mujanovic said.

According to Mujanovic, political will is needed to adopt a state-level law on managing confiscated assets, but it is also necessary to elaborate on the existing law in order to specify who becomes the owner of illegally-acquired assets after they are confiscated.

Mujanovic argued that the temporary seizure measures proposed by the state prosecution are modest because they only involve confiscations of money and seizures from banks, as opposed to real estate, which requires management while its ownership is frozen.

Mujanovic said that the Federation entity’s Law on Confiscation of Illegally Acquired Property stipulates that “assets confiscated on the basis of this law become the property of the Federation of Bosnia and Herzegovina”, so assets can be temporarily seized during a trial and then the seizure can be permanently enforced after the final verdict, if necessary, which he argued was a more efficient way of manging the process.

Millions confiscated in the entities

The Federation and Republika Srpska entity agencies for managing confiscated property already dispose of property which has been temporarily or permanently confiscated as per court decisions.

Since it started work two years ago, the Agency for Managing Confiscated Property of the Federation of Bosnia and Herzegovina has received assets worth 25 million Bosnian marks. Thirteen million Bosnian marks were handed over in the first nine months of this year in temporarily-seized assets.

The Law on Confiscation of Illegally Acquired Property of the Federation of Bosnia and Herzegovina envisages four ways of dealing with confiscated assets in accordance with European standards. These are: selling the assets, renting them out, giving them away, and as a final option, destroying them.

Kenan Kapo, the Agency for Managing Confiscated Property’s director, says that large amounts of property have been confiscated in around 35 cases in the Federation and given to the Agency to manage until the completion of second-instance proceedings, which may take several years. Most of the property is being rented out.

“We have an expensive villa and a building which we are already renting and collecting rent of around 14,000 Bosnian marks a month,” Kapo said.

“The rent money will be kept in a special bank account until the court has reached its final decision. Should the villa be permanently confiscated under the second-instance verdict, all the money will be transferred to the federal budget,” he added.

Besides the villa, four expensive cars, a hotel, a student dormitory, a petrol station and other property, shares and money have also been handed over to his agency to be managed.

If a court eventually decides to return the property to its original owner, Kapo said that it will also decide what will happen to the income generated from that property in the meantime.

There are also several cases of permanently confiscated property, which will increase after second-instance proceedings are complete, he added.

The Agency for Managing Confiscated Property of Republika Srpska said that it has so far disposed of assets worth 12.1 million Bosnian marks which had been confiscated permanently as a result of second-instance court rulings.

“Around 11.4 million Bosnian marks of the total amount has been registered in public records as Republika Srpska’s property, while more than half a million Bosnian marks in cash has been transferred to the budget of Republika Srpska,” the Agency said.

A smaller amount of the total property value has been assigned to Republika Srpska administrative bodies and gifted to other legal entities, it added.

Mujanovic argued that the financial value of the seized assets to the state should not be seen as the ultimate signifier of success.

Seizing illegally-acquired assets also “diminishes the criminal reputation of those whose property has been confiscated”, he argued.

Asset seizures also signal that crimes will be punished and illegally-acquired possessions confiscated, he added – sending out a message that crimes does not pay.

Haris Rovčanin

This post is also available in: Bosnian