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Asset Seizure: Effective Safeguarding Measures in Criminal and Tax Law

Key Points on the Asset Seizure


Purpose and Aim: Asset seizure is used to secure assets for poten­tial claims and often acts as a deter­rent in tax criminal procee­dings.

Types of Asset Seizure: There are two types – asset seizure under § 111e of the German Code of Criminal Proce­dure (StPO) and the civil seizure order under § 324 of the German Fiscal Code (AO), which can be issued by tax autho­ri­ties.

Requi­re­ments and Process: Typi­cally ordered by a court, but in urgent cases, the public prosecutor’s office may enforce it. Probable cause and a need for secu­rity are required.

Legal Reme­dies for Those Affected: Various legal reme­dies are available, such as filing a complaint against the court’s decision or reques­ting judi­cial review if the seizure is ordered by the public prosecutor’s office.

Double Burden by Tax Autho­ri­ties: In tax-related cases, asset seizure can also be ordered by tax autho­ri­ties under § 324 AO, adding addi­tional burden for those affected.

The asset seizure in tax criminal procee­dings allows the confis­ca­tion of assets from the affected person. In addi­tion to serving as a deter­rent for future tax offenses, the purpose of this coer­cive measure is to secure the injured party’s right to compen­sa­tion by safe­guar­ding the assets. A distinc­tion can be made between asset seizure under § 111e of the Code of Criminal Proce­dure (StPO) and the attach­ment of property under § 324 of the Fiscal Code (AO).

The asset seizure under § 111e of the Code of Criminal Procedure (StPO) can be distinguished from the civil seizure order under § 324 of the Fiscal Code (AO).

Asset Seizure According to § 111e of the Code of Criminal Procedure (StPO)

Less known to the general public than pre-trial detention, the asset seizure in criminal procee­dings accor­ding to § 111e of the Code of Criminal Proce­dure (StPO) is one of the most severe coer­cive measures in criminal proce­dure. The condi­tions for asset seizure are less strin­gent than the signi­fi­cant legal conse­quences for those affected might suggest—enough reason to outline these condi­tions below and to present the legal reme­dies available to a defen­dant against the asset seizure.

From a formal stand­point, asset seizure accor­ding to § 111e StPO gene­rally requires an order from the compe­tent court; in the excep­tional case of immi­nent danger, an order may be issued by the public prosecutor’s office, as stated in § 111j StPO.

When the court orders asset seizure, this follows a request from the public prose­cutor to the court compe­tent accor­ding to § 162 StPO. This results in the inves­ti­ga­ting judge at the district court where the public prosecutor’s office is located being respon­sible during the preli­mi­nary procee­dings, as stated in § 162(1) Sentence 1 StPO. The order is issued by the court hand­ling the case after the indict­ment is filed, § 162(3) Sentence 1 StPO, while the appel­late court is respon­sible for the order upon receipt of the case files. The court whose decision is being contested is then respon­sible during the appeal process accor­ding to § 162(3) Sentence 2 StPO. The judi­cial decision consists of a written ruling that requires justi­fi­ca­tion.

Less frequently—only in cases of immi­nent danger, as per § 111j(1) Sentence 2 StPO—does the public prosecutor’s office have the autho­rity to order asset seizure. After issuing the order, the public prose­cutor must request confir­ma­tion of this measure from the compe­tent court within one week.

In substan­tive terms, the condi­tions for asset seizure are on the lower end: a preli­mi­nary suspi­cion, a valid seizure claim, a need for safe­guar­ding, and the propor­tio­na­lity of the coer­cive measure, taking into account temporal limits, are suffi­cient to trigger the asset seizure.

Speci­fi­cally, the preli­mi­nary suspi­cion accor­ding to § 152(2) StPO requires that it must appear at least possible, based on crimi­na­li­stic expe­ri­ence, that a prose­cu­table offense has been committed. Ther­e­fore, asset seizure can be ordered as early as the begin­ning of the preli­mi­nary inves­ti­ga­tion.

The valid seizure claim, as a concrete mani­fes­ta­tion of the preli­mi­nary suspi­cion within the context of asset seizure, requires that there are suffi­cient indi­ca­tions to assume that the defen­dant will be obliged to pay compen­sa­tion for value due to crimes committed by them after the conclu­sion of the procee­dings. It must thus be evident that the condi­tions for orde­ring the confis­ca­tion of value after the conclu­sion of the criminal procee­dings will be met. The details regar­ding confis­ca­tion are governed by §§ 73 et seq. of the Criminal Code (StGB).

A limi­ta­tion that should not be unde­re­sti­mated in light of Article 14(1) of the Basic Law (GG) is the specific need for safe­guar­ding, which, as an aspect of propor­tio­na­lity, is expli­citly inherent in the StPO and requires the neces­sity and appro­pria­teness of the asset seizure. In addi­tion to these two condi­tions, further objec­tive circum­s­tances must be present that justify, in a compre­hen­sive assess­ment of the indi­vi­dual case, the conclu­sion that an order for asset seizure is neces­sary to secure enforcement—such as if the defen­dant is unwil­ling to disc­lose their finan­cial situa­tion or there are indi­ca­tions of attempts to conceal their actual assets.

This funda­mental prin­ciple of propor­tio­na­lity broadly influences the orde­ring of asset seizure accor­ding to § 111e StPO. The need for safe­guar­ding the general public and the funda­mental right of the affected party protected under Article 14 GG must be weighed and balanced during the orde­ring of asset seizure. This is parti­cu­larly evident in the temporal aspect of the asset seizure—even though the propor­tio­na­lity of the asset seizure may justi­fiably be ques­tioned after a dura­tion of appro­xi­m­ately six months, the limit of propor­tio­na­lity must ulti­m­ately be unders­tood concre­tely and assessed on a case-by-case basis.

Of course, a person affected by asset seizure is not defen­se­less. Various legal reme­dies are available to the affected party, depen­ding on which autho­rity ordered the asset seizure:

If the asset seizure is ordered by the court, the affected party has the right to file a simple complaint accor­ding to § 304 StPO before the district court. If the district court decides against the complaint, the decision regar­ding the order then falls to the regional court as the appel­late court. Further action against a decision of this court is only possible if the seizure exceeds an amount of €20,000, as stated in § 310(1) No. 3 StPO. Addi­tio­nally, after a certain dura­tion of procee­dings, it is advi­sable to submit a request for the lifting of the asset seizure.

Against an order issued by the public prosecutor’s office, the affected party can contest this by filing a request for a court decision. If the court finds the asset seizure and the orde­ring autho­rity of the public prosecutor’s office lawful in light of exis­ting immi­nent danger, a simple complaint accor­ding to § 304(1) No. 3 StPO is permis­sible against the court’s decision, and if appli­cable, a further complaint accor­ding to § 310(1) No. 3 StPO can also be pursued.

Asset Seizure According to § 324 of the Fiscal Code (AO)

The inten­sity of inter­fe­rence of the asset seizure is signi­fi­cantly increased by the fact that, in tax criminal procee­dings, in addi­tion to § 111e StPO, the tax autho­ri­ties have the option to take parallel action against the tax debtor based on § 324 AO. Not only is the poten­tial double burden itself proble­matic, but also the early point at which the tax autho­ri­ties can secure the tax claim: it is suffi­cient for the claim to arise from the tax obli­ga­tion accor­ding to § 38 AO. In contrast, the orde­ring autho­rity of the tax autho­rity is subject to strict dead­lines in this approach.

If the tax autho­rity orders an attach­ment of property accor­ding to § 324 AO, the affected party has nume­rous legal protec­tion options available. Accor­ding to § 33(1) No. 2 FGO, they have the right to approach the tax courts. Addi­tio­nally, the affected party can file a request for a tempo­rary order or suspen­sion of enforce­ment.

Do I Need a Lawyer as Someone Affected by Asset Seizure?

Since it is not uncommon for you to be obli­gated to surrender your assets both through an asset seizure accor­ding to § 111e StPO and through the tax autho­ri­ties via the attach­ment of property accor­ding to § 324 AO, this double burden parti­cu­larly empha­sizes the need to seek profes­sional legal advice. The substan­tive and timely selec­tion of an appro­priate legal remedy should be prepared by a specia­lized lawyer.

To file a legal remedy that is meaningful in your specific case and ideally to achieve a swift lifting of the asset seizure order, it is essen­tial to contact a lawyer specia­li­zing in criminal law and tax criminal law.

Should you have any further ques­tions or be a defen­dant in a criminal or tax procee­ding (tax criminal procee­ding), please feel free to contact us.

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