Legal Defence in the Case of Asset Seizure

Asset confiscation means the confiscation of a profit made through criminal offences. After committing a criminal offence, an offender is threatened with a custodial sentence or a fine and, under certain circumstances, with the implementation of asset confiscation as standardised in Sections 73 et seq. of the German Criminal Code (StGB). Section 73 (1) sentence 1 StGB states:

If the offender or participant has obtained anything by or for an unlawful act, the court orders the confiscation of that which was obtained.

In most cases, the provisions of Sections 73 et seq. StGB are primarily applied in connection with offences such as corruption, tax evasion, theft, receiving stolen goods, fraud and violations of the Narcotics Act. In principle, however, asset confiscation is not tied to a specific offence. According to Section 73a (1) StGB, a seizure is also ordered if the objects were obtained through or for another unlawful act. The only prerequisite is that there are indications that convince the court that the “something” obtained through or for the offence is of criminal origin. The term “something” includes assets such as rights in rem, movable objects, etc.

This means that if a person or a company obtains “something” through a criminal offence, it will be taken away from them again. The rule is that the offender should not gain any financial advantage through their actions.

Confiscation of proceeds of crime also includes property of the offender or participant obtained through or for other offences. This follows from the norm on extended confiscation (cf. Section 73a (1) StGB).

While Sections 73 and 73a StGB regulate the confiscation of assets from the offender and participants, Section 73b StGB regulates the confiscation of proceeds of crime from others. This refers to a person who has been enriched by the unlawful act of another person but is not a perpetrator or participant. The court’s order may be directed against such an enriched person if

• the person has obtained something through the act and the perpetrator or participant has acted on behalf of the person,
• the person has received what they have obtained free of charge or without legal justification, or they realised or should have realised at the time of the transfer of what they had obtained that it was the result of an unlawful act, or
• the acquired property has passed to the person by virtue of their position as heir, beneficiary of a compulsory portion or legatee.

It should be noted that regarding the confiscation of proceeds of crime from others, however, exceptions also apply.

Under Section 76a StGB, the court may order confiscation independently if no specific person can be prosecuted for the offence. This also applies under certain circumstances if prosecution is refrained from or if there is a statute of limitations. According to Section 76a (4) StGB, the confiscation of an asset can also be ordered independently of proof of unlawful trading. However, this is only possible under the conditions that the court is convinced of the illegal origin of the object and that there is a suspicion of one of the offences listed in Section 76a (4) sentence 3 StGB.

Section 73d StGB regulates the determination of the value of the proceeds. The expenses of the offender, participant or other person are deducted from the determination.

The so-called “gross principle” is used to determine the value. During the determination, two steps are then taken to examine the value:

• Consideration of the object of the gain,
• deduction of expenses of the perpetrator, participant or others.

For the latter point, however, the following applies: what was spent or used for the commission of the offence or during its preparation is mostly disregarded (cf. Section 73d (1) sentence 2 StGB).

If the value of the proceeds cannot be determined, it can be estimated according to Section 73d (2) StGB. Particular attention must be paid to the confiscation of surrogates. If a different asset was obtained through the unlawful acquisition, this would be included in the court’s estimate. This also applies to the proceeds of crime from others. However, the prerequisites mentioned above of Section 73b (1) StGB must be fulfilled.

The court may also order the confiscation of a sum of money corresponding to the value of the proceeds according to Section 73c StGB. This is possible if

• the confiscation of the object is no longer possible because of the nature of what was obtained or for other reasons, or
• the confiscation of a substitute object is dispensed with.

While the seizure of assets under Sections 111b et seq. of the German Code of Criminal Procedure (StPO) serves to secure confiscation or rendering useless, asset detention under Sections 111e et seq. StPO serves to secure the confiscation of valuables.

Section 111b (1) sentence 1 StPO states:

If it is reasonable to assume that the conditions for the confiscation or rendering unusable of an object are met, the object may be seized to secure enforcement.

The norm, in conjunction with Section 111c StPO, therefore, stipulates that the objects of confiscation set out in Sections 73 et seq. StGB can be confiscated. The prerequisite for this is the justified assumption (e.g., the initial suspicion) or urgent reasons for the assumption. In the latter case, the seizure is to be ordered.

On the other hand, asset detention can be ordered if there is reason to believe that the preconditions for confiscating valuables exist (cf. Section 111e (1) StPO). An arrest serves to secure the later confiscation of assets. The measure is also to be taken if there are urgent reasons.

The execution of the property arrest is regulated in Section 111f StPO. There it is precisely standardised how the asset detention will be executed in which assets. According to Section 111f (1-3) StPO, asset detention is to be carried out in

• a movable property, claim or other property right that is not subject to compulsory execution on the immovable property,
• a real property or right subject to the rules governing the levy of execution on immovable property,
• a ship, a ship’s structure or an aircraft.

The first and last points are executed by seizure, while the registration of a security mortgage affects the attachment of assets to real property or rights.

If the public prosecutor’s office has already initiated proceedings against you and is accessing your assets, contact our law firm immediately. Access to your assets may put you and your company in a situation that threatens your existence. The German criminal lawyers of Schlun & Elseven will examine the facts, develop a strategy tailored to your case and inform you in detail about your options.

Within the framework of criminal proceedings with a property-related aspect, an order is usually made for the criminal procedural safeguarding or detention of assets. For those affected, the question arises about how they can defend themselves in such a situation and what rights they are entitled to.

We recommend that you first contact our lawyers. They will check who ordered the seizure or attachment of your assets. According to Section 111j, paragraph 1, sentence 1 StPO, this order is made by a court. However, according to Section 111j, paragraph 1, sentence 2 StPO, the public prosecutor’s office can also issue the order in case of imminent danger. If the public prosecutor’s office has issued the order for seizure or asset detention, the person concerned can apply a decision by the court. The court then examines the legality of the public prosecutor’s action. If, on the other hand, a court has issued an order for the criminal proceedings to be secured or for the property to be detained, the person concerned can file an complaint under Section 304 StPO. However, since this procedure has advantages and disadvantages, you should seek detailed advice beforehand.

The person concerned must be informed of the possibility of an emergency sale. In this case, the object that has been seized or impounded may be sold if it is in danger of spoiling or suffering a considerable loss in value or if the storage, care or preservation of the object is associated with significant costs (cf. Section 111p (1) sentence 1 StPO). The emergency sale is ordered and carried out by the public prosecutor’s office. Before this, however, the person concerned is to be heard (cf. Section 111p (3) sentence 1 StPO). If the person concerned wishes to oppose the procedure, it is possible under Section 111p (5) sentence 1 StPO to apply for a decision by the competent court. Likewise, the person concerned can apply for a decision by the court with jurisdiction under Section 162 StPO against the measures taken in the context of the administration of the object (cf. Section 111m (2) StPO) as well as the steps taken in the context of the execution of the seizure or detention (cf. Section 111k (3) StPO).