On 2 May 2024 a directive appeared in the Official Journal of the EU that affects how you hold your wealth, even if you never have anything to do with criminal law. It is called Directive (EU) 2024/1260 on asset recovery and confiscation. Parliament and Council signed it on 24 April 2024. Member states must write it into their own law by 23 November 2026.
Its core lies in two articles. One governs when assets may be confiscated although nobody has been convicted. The other governs the confiscation of assets whose origin is unclear. Both belong among the powers a state can use to reach property. What that means for a fortune held with care is the subject of our overview of asset protection.
What the directive is about
The directive lays down minimum rules. For tracing, freezing, confiscating and managing assets in criminal proceedings. It replaces an older directive from 2014 and several framework decisions.
It applies to a long list of offences. Organised crime, terrorism, human trafficking, corruption, money laundering, fraud against the EU budget, cybercrime, environmental crime. And, entirely new, violations of EU sanctions. Through an opening clause, any future EU legal act can bring further offences within its scope.
For the tracing of assets the directive goes further still. Those rules apply to every offence for which national law allows a prison sentence of one year or more. That is a large part of criminal law.
Confiscation without a prior conviction
Normally a simple order applies. First the judgment, then the confiscation. The directive breaks that order expressly.
Under Article 15, member states must make confiscation possible even where criminal proceedings have begun but cannot be brought to an end. The grounds are listed:
- the suspect is ill,
- the suspect has absconded,
- the suspect has died,
- the offence is time-barred, provided the limitation period is under 15 years and expired after the proceedings began.
The condition: the proceedings could have led to a conviction but for these circumstances. And a court must be satisfied that the assets derive from the offence.
The case of death deserves a second look. The proceedings end with the suspect. The confiscation of his assets must still remain possible. That is what the text requires.
Assets of unclear origin
The second article goes one step further. Article 16 covers cases in which none of the other forms of confiscation applies. Assets identified in the course of an investigation may then be confiscated. The precondition: a court is satisfied that they derive from criminal conduct committed within the framework of a criminal organisation.
What the court can base this on is set out in the text. Three indicators are named expressly:
- the value of the assets is substantially disproportionate to lawful income,
- there is no plausible lawful source,
- the person concerned is connected to people linked to a criminal organisation.
Offences with a maximum penalty of at least four years are covered. The rights of bona fide third parties remain unaffected.
Read the indicators closely. None of them is an act. They are circumstances. The gap between assets and income. The absence of a plausible explanation. Dealings with certain people. From circumstances like these a court may draw conclusions about origin.
When assets have gone to the family
A further article concerns third parties. The directive requires that assets a suspect has transferred to others can also be confiscated. The precondition is that the recipient knew or ought to have known that the transfer was made to avoid confiscation.
Here, too, the text names the circumstances that count. The transfer was made free of charge or far below market value. Or the assets went to closely connected persons but remain, in fact, under the suspect's control.
This is the point at which asset protection and criminal law touch. A transfer to the family in which you keep control is, from the standpoint of this rule, no protection. It is an indicator. The rights of bona fide third parties are expressly protected. But under the text, only someone who did not know and had no reason to know is in good faith.
Direct access to your registers
The least conspicuous part of the directive may be the one with the greatest consequences. It governs what asset recovery offices are allowed to see.
Under Article 6, these offices receive immediate and direct access to a whole range of registers. Land registers and property registers. Population registers. Registers of vehicles, aircraft and ships. Commercial registers. Beneficial ownership registers. And the central bank account registers.
On request or directly, further data are added. Tax data. Social security data. Information on mortgages and loans. Customs data on cash at the border. Company accounts. And information on crypto accounts and crypto transfers.
Every access is logged. It is to take place only case by case, where it is necessary and proportionate. The offices may exchange information among themselves, across the borders of member states as well. And where there is an immediate risk that assets will disappear, they may freeze them at once for up to seven working days, before a court has ruled.
The new directive adds no new content to the existing registers. It opens them to a further group of authorities. Where the plans for a wider register of assets stand is set out on our page on the EU asset register.
Frozen does not mean convicted, but it can already mean sold
Years often pass between the freezing and the final decision. The directive has rules for that period too. They are instructive for every owner.
Frozen assets may be sold even before final confiscation. The directive names three cases. The item is perishable or loses value quickly. The cost of storage or upkeep is out of proportion to its market value. Or management requires special conditions and expertise. The person affected is to be heard beforehand, except in urgent cases. The proceeds are secured until a court has decided.
Member states may also make the owner bear the costs of managing his frozen assets, at least in part. And they are encouraged to use confiscated assets for public or social purposes. Assets from sanctions violations may even be used to support third countries affected by the situation that led the EU to impose sanctions, expressly for instance in a war of aggression.
If there is no confiscation in the end, the assets must be released without delay. That, too, is in the text. But a property, a business or a collection that stood under someone else's management for years, or was sold early, is no longer the same asset it was before.
The UK has had this power for years
The United Kingdom is outside the EU and not bound by the directive. In one respect, though, the directive brings nothing new for British owners. Under Part 5 of the Proceeds of Crime Act 2002, the enforcement authority can recover property obtained through unlawful conduct in civil proceedings before the High Court or the Court of Session. These powers can be used whether or not anyone has been prosecuted for an offence in connection with the property. The court decides on the balance of probabilities, the civil standard, not the criminal one.
Alongside this stands the unexplained wealth order. The High Court can make one where property is worth more than £50,000 and there are reasonable grounds to suspect that the known sources of the respondent's lawfully obtained income would have been insufficient to obtain it. The respondent must be a politically exposed person or be suspected on reasonable grounds of involvement in serious crime, either personally or through a connected person. If the respondent fails to comply without reasonable excuse, the property is presumed to be recoverable in later proceedings unless the contrary is shown.
The European directive and British law therefore speak the same language. The gap between wealth and lawful income is a central criterion in both. In the UK already today. Across the EU from the end of 2026.
Ireland, Denmark and the rest of the region
Not every country in the region is bound in the same way. Under the directive's own recitals, Ireland and Denmark are not taking part in its adoption and are not bound by it or subject to its application. Ireland's position rests on Protocol No 21 to the Treaties, Denmark's on Protocol No 22.
Sweden, Finland, the Netherlands, Belgium and Luxembourg are bound as member states. There, what the directive requires must be in force by 23 November 2026. How far national law already meets these requirements is for each legislature to decide when it transposes the directive.
Norway is not an EU member state, and the directive is addressed only to member states. For anyone with assets in a member state, such as a holiday home or an account, the law of the state where the assets are located applies all the same.
What this means for lawfully acquired wealth
The directive targets the proceeds of crime. Under its text, what is confiscated is what derives from crime.
Even so, something shifts. And that something concerns everyone who owns assets.
First, the burden of evidence shifts. In the past, confiscation began with a judgment on an offence. In certain proceedings, circumstances from which a court infers origin are now enough. Anyone with substantial wealth who can no longer document where it came from, because papers are missing, inheritances were never recorded or cash was saved up over decades, ends up in a weaker position. Not because they did something. But because they can no longer prove it.
Second, the scope grows. The list of offences has been extended to include sanctions violations. The opening clause allows further extensions. A tool built once for one purpose is then available for others. That is not a forecast. It is built into the directive itself.
Third, visibility becomes the precondition for access. The registers that authorities now reach directly show where your wealth is located. Land register, accounts, companies, crypto accounts. What is recorded there is found in minutes.
For these powers the state needs no expropriation in the constitutional sense. It needs a procedure, a court and a set of indicators. This confiscation does not presuppose a conviction. That is precisely its purpose.
What you can do now
Three practical steps follow from the directive. None of them is exotic.
Document where your wealth comes from. Purchase contracts, grants of probate, deeds of gift, bank statements, sale receipts for gold and property. What is self-evident today may no longer be provable in twenty years. Your protection against an indicator is a record.
Do not transfer below value to people over whom you keep control. That is exactly what the directive describes as an indicator. A transfer that leaves you in control does not protect, it makes you vulnerable. Anyone planning their succession therefore needs a clean structure, not a quick gift.
Separate protection from invisibility. The registers are being opened, not closed. Protection therefore does not come from nobody finding your wealth. It comes from wealth being set up in law so that it holds even when it is fully known.