Asset Seizure: What Is It? Requirements for Ordering Asset Seizure

Criminal Law – What Does Asset Seizure Mean in Criminal Proceedings?

Asset seizure in tax criminal proceedings enables the confiscation of substitute value from the affected party through the seizure of movable and immovable property. This measure serves two main purposes:

1. 1. It is intended to deter potential tax offenders and money laundering perpetrators
   2. It serves to secure the enforcement of claims by the injured party (usually the state)

There are two different types of asset seizure:

• • Asset seizure pursuant to § 111e StPO (Code of Criminal Procedure)
  • Attachment in rem pursuant to § 324 AO (Tax Code)

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

Asset seizure under the Code of Criminal Procedure is less well known to the public than pretrial detention, but it is one of the most severe coercive measures in criminal proceedings. The requirements for its ordering are surprisingly low compared to the serious consequences for those affected.

Formal Requirements: Who May Order Asset Seizure?

As a rule, asset seizure must be ordered by the competent court. Only in exceptional cases, when there is imminent danger, may the public prosecutor’s office also order this measure (§ 111j StPO).

Court Jurisdiction in Detail:

• • In investigation proceedings: The investigating judge at the local court in whose district the public prosecutor’s office has its seat
  • After filing of charges: The court handling the case
  • In appeal proceedings: The appellate court after receipt of the files
  • In revision proceedings: The court whose judgment is being challenged

The court decision is made by written, reasoned order.

Order by the Public Prosecutor’s Office in Cases of Imminent Danger

In cases of imminent danger (§ 111j para. 1 sentence 2 StPO), the public prosecutor’s office may also order asset seizure. In such cases, however, it must obtain confirmation from the competent court within one week.

Material Requirements: When Is Asset Seizure Lawful?

Four essential conditions must be met for ordering asset seizure:

1. 1. Initial suspicion
   2. Eligible seizure claim
   3. Need for security
   4. Proportionality with consideration of time limits

Initial Suspicion as a Basic Requirement

For initial suspicion pursuant to § 152 para. 2 StPO, it must appear at least possible according to criminal investigation experience that a prosecutable offense was committed. Asset seizure can therefore be ordered at the beginning of investigation proceedings.

What Is an Eligible Seizure Claim?

The eligible seizure claim concretizes the initial suspicion for asset seizure. Sufficient indications must exist that the accused will be obligated to pay substitute value upon conclusion of the proceedings.

The Need for Security as an Important Requirement for Asset Seizure

The need for security is an essential limitation on asset seizure and protects the fundamental right to property pursuant to Article 14 para. 1 GG . It requires that asset seizure be:

• • necessary and
  • required

Additionally, objective circumstances must exist that suggest in the individual case that asset seizure is necessary to secure subsequent enforcement. Such circumstances may include, for example:

• • The accused refuses to disclose his financial circumstances
  • There are indications of concealment of actual assets

The Importance of Proportionality

The principle of proportionality pervades the entire ordering of asset seizure. The public interest in security must be weighed against the affected party’s constitutionally protected property right (Article 14 GG).

Time Limits for Asset Seizure

Particularly important is the temporal component of asset seizure. Although proportionality may be seriously questioned after approximately six months, it must be assessed specifically in each individual case.

Defending Against Asset Seizure: What Legal Remedies Do Those Affected Have?

Those affected by asset seizure are not without protection. Depending on which authority ordered the asset seizure, various legal remedies are available:

Legal Remedies Against Court Orders

In the case of an order by the court, the affected party has the simple complaint pursuant to § 304 StPO available:

• • Initially before the local court
  • In case of a negative decision, the regional court decides as the appellate court
  • Further action is only possible if the seizure exceeds 20,000 euros (§ 310 para. 1 no. 3 StPO)

In case of longer proceedings, an application for revocation of the asset seizure is also recommended.

Legal Remedies Against Orders by the Public Prosecutor’s Office

Against an order by the public prosecutor’s office, an application for judicial decision may be filed:

• • If the court confirms the lawfulness, a simple complaint pursuant to § 304 para. 1 no. 3 StPO is possible
  • If applicable, further complaint pursuant to § 310 para. 1 no. 3 StPO is also permissible

Attachment in Rem by Tax Authorities Pursuant to § 324 AO

Parallel Ordering Authority of Tax Authorities

A special situation exists in tax criminal proceedings: In addition to asset seizure, the tax authorities may proceed in parallel against the tax debtor pursuant to § 324 AO. This can lead to the seizure of both movable and immovable property and significantly increases the intensity of the intervention. Particularly in cases of tax evasion and money laundering, this double burden frequently occurs.

Earlier Intervention Authority for Tax Authorities

The early point at which tax authorities may act is problematic:

• • It is sufficient if the claim arising from the tax obligation pursuant to § 38 AO has arisen
  • However, the tax authority is subject to fixed deadlines in this procedure

Legal Protection Options Against Attachment in Rem

Several legal remedies are available to the affected party against attachment in rem pursuant to § 324 AO:

• • Recourse to the tax courts pursuant to § 33 para. 1 no. 2 FGO
  • An application for interim order
  • An application for suspension of enforcement

Why You Need Legal Assistance in Case of Asset Seizure

The Problem of Double Burden

Since those affected are often confronted simultaneously with asset seizure and attachment in rem pursuant to § 324 AO, a considerable double burden arises. This makes professional legal advice particularly important.

The Importance of Expert Advice

A specialized attorney can:

• • Select the most appropriate legal remedy in terms of content and timing
  • Ideally achieve a prompt revocation of the seizure order

For optimal defense against asset seizure, contacting a specialist attorney for criminal law and tax criminal law is essential.

Understanding Asset Seizure as a Serious Measure and Taking Appropriate Action

Asset seizure to secure enforcement represents a significant intervention in the financial circumstances of the affected party. The seizure of movable and especially immovable property can be life-threatening. Due to the comparatively low thresholds for ordering the confiscation of substitute value and the potential double burden from criminal and tax law measures, early and competent legal advice is crucial.

If you have questions about asset seizure or are affected yourself, the specialist attorneys at Mügge, Dr. Pitschel & Partner are available with their expertise in tax criminal law.