The lawlessness that prevails in the confiscation of assets contributes to the outflow of funds from Latvia

The Constitutional Court's (CC) judgement of May 23 on property to be confiscated for the benefit of the state has sparked a debate on the unjustified decisions of the process facilitators to declare the property as criminally acquired. Lawyer Daiga Siliņa predicts that the unwillingness of the prosecutors and the courts to apply the rules of law in confiscating property will result in the Latvian state being forced by the European courts to pay compensation.

Asked to comment on the May 23 ruling of the Supreme Court, Siliņa said: "It is clear from the press release that the Constitutional Court has not dealt with the substance of the issues at stake. It dealt very narrowly with the question of creditors' rights in the liquidation of a bank where the assets have been found to be criminally acquired - why the State has priority over other creditors. On this point, I have to agree with the judgment of the Constitutional Court. If a court has found that assets have been criminally acquired, then the criminally acquired assets cannot be distributed among creditors. They must be confiscated. I also assessed the application before the Constitutional Court. I do not know why the Constitutional Court even brought the case and considered the matter. There are other norms that the Constitutional Court should assess in order to put an end to the arbitrary actions of the police at the moment and to indicate to the courts how the norms should be applied. The Constitutional Court does not address the question of the application of the norms. It only looks at whether or not a norm is compatible with the Constitution. The biggest problem is how the police and the courts apply the law. I am currently trying to get our court to go to the European Court of Justice to ask about the application of norms - whether we are correctly applying national norms that derive from both EU directives and the Warsaw Convention."

People abroad are baffled

Asked whether other countries are also moving towards ignoring the sanctity of private property, Siliņa explained: "The Latvian process is unique, phenomenal. My German colleagues do not understand what is happening here. For example, in Luxembourg, too, there are cases concerning the ABLV bank. But things like that don't happen there. The Warsaw Convention sets out how assets are criminalized - if they are laundered, there is no need to specify the offence through which the funds were obtained. Here, the Convention is read and applied. But it also has an explanatory report, which sets out precisely the criteria that must be established for this provision to apply. This explanatory report is not read here."

Presumed does not mean proven

Asked whether persons in Latvia are really deprived of their property as under the dictatorship of the proletariat, the lawyer said: "Our level of education is... well... I read the decisions taken by the prosecutors in connection with the initiation of proceedings for the criminal property. The dirtier they have written the decision, the more justified it seems to them. But what is this justification: ‘There is information on the Internet that...’ Since when does the information found on websites have evidential value? Here is a case in point. The decision states that there is information on the Internet that criminal proceedings have been initiated against the owner of the company in Ukraine. I started to analyze. Yes, there is indeed a criminal case against an official who incorrectly filled in an income tax return. We requested the criminal case and the documents. It turns out that the criminal proceedings have been dropped and no damage has been caused to the State. This misunderstanding with the tax return took place in 2018, but the assets that are considered to be criminally acquired were already deposited in the bank account in 2014. How can assets acquired in 2014 be linked to information on a website about criminal proceedings in 2018 that were dropped because no damage was caused? That is the level at which the investigation is working, and the court accepts it! However, there are strict criteria in the process as to how criminal proceedings can be opened - when a sufficient body of evidence has been gathered. The problem is how the legal framework is applied. The University of Latvia has analyzed the situation in the proceedings for criminal property. There are two types - presumed criminally acquired property and proven criminally acquired property. The process facilitator does not even specify what type of property it is. It is only a matter of time before the European Court of Justice orders the Latvian state to pay the fines. This is my country, too, and I, too, am in favor of the rule of law.

I do not want the taxpayers to pay the compensation ordered.

But probably, until there are European rulings, things here will go on as they are. The big question is why are the courts avoiding referring requests to the European Court of Justice for a preliminary ruling on how the court should apply the directives and the Convention? Are they afraid? Why - I do not know. Politics? I don't know! Ms [Ilze, head of the Financial Intelligence Unit] Znotiņa says there are typologies and methodologies. Look at the decisions on criminal assets. There, it is only based on typologies and methodologies that a presumption of criminal origin is made. I lodged a complaint with the Court of Economic Affairs - the process facilitator considers that the lawyer should not copy and photograph the case file. But, Your Honor, if we are talking about the exercise of equal procedural rights, why do the prosecutors give themselves an advantage over the lawyer, who is ordered, as if as a method of torture, to copy out the file by hand? Thank goodness the court upheld the complaint. Let us see what evidence, or so-called evidence, prevails in the decisions. For example, there is the Financial Intelligence Unit report, which is essentially a presumption; then there is some information that can be found on websites, and this is presented as evidence. How does that go along with what is presented to us as the rule of law?"

Assets flowing abroad

Asked whether what is happening is a signal to those who have assets under Latvian jurisdiction that it is high time to get rid of them or remove them from this jurisdiction, Siliņa said: "Unfortunately, a large number of both legal and natural persons have already opened their accounts outside the Republic of Latvia. Money flows are moving out of Latvia and this is happening because banks are afraid of fines. The ‘prevention’ law provides for insane penalties. It is easier to refuse and not accept the money; not to assess and manage the risks. Now the police are not limited to seizing bank assets. People are also having all their immovable property seized. It's sad."

Previously, the issues of confiscation of property in connection with the judgment of the Supreme Court were commented on Neatkarīgā by the President of the Latvian Council of Sworn Advocates, advocate Dr. iur. Jānis Rozenbergs.