Defending victims of cross-border fraud in the EU – A Portuguese view, including the use of preventive “freezing” of bank accounts under anti-money laundering legislation
| Published date | 01 September 2023 |
| DOI | http://doi.org/10.1177/20322844231173913 |
| Author | Vânia Costa Ramos,Diogo Pereira Coelho |
| Date | 01 September 2023 |
| Subject Matter | Articles |
Article
New Journal of European Criminal Law
2023, Vol. 14(3) 397–420
© The Author(s) 2023
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DOI: 10.1177/20322844231173913
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Defending victims of
cross-border fraud in the EU –A
Portuguese view, including the
use of preventive “freezing”of
bank accounts under anti-
money laundering legislation
Vˆ
ania Costa Ramos
Carlos Pinto de Abreu e Associados, Lisboa, Portugal
Faculty of Law, University of Lisbon, Portugal
Diogo Pereira Coelho
DPC Legal Services, Lisboa, Portugal
Abstract
The Article looks into recovering assets for victims of frauds using the financial system to launder proceeds,
against the backdrop of two case-examples and the lessons learned by the authors from their practice as
lawyers in Portugal. It sets out relevant EU instruments (Section I) and then turns into the main difficulties
and obstacles in practice (Section II). Finally, it addresses the use of preventive suspension of banking
operations (“SOB”) under AML laws at the service of the interests of the victims of cross-border fraud. It
argues albeit these have not been built or designed bearing victims’interests in mind they are essential to the
recovery of the proceeds and their return to fraud victims. The authors propose to reflect on improving
such mechanisms, namely by guaranteeing that it is possible to make consecutive blockings that follow the
trail of the proceeds of the fraud through the various jurisdictions involved; and also on the pertinence of
giving an explicit place to the victim in the legal framework that regulates the mechanisms for the prevention
of money laundering, namely by facilitating the access of the victims to reporting channels that allow for
a quick activation of such mechanisms (Section III). The piece concludes stating that although multiple
mechanisms are available to ensure the protection of victims’financial interests in this context, the ar-
ticulation and definition of the strategy is highly complex, making the intervention of a lawyer essential. In any
event, if there is no swift intervention and freezing of the proceeds at the outset of the detection of fraud, it is
as a rule impossible to recover victims’assets.Itisironicthatinpracticesuchfreezingisatbestmade
possible by AML laws that were not designed having victims’interests at the forefront.
Corresponding author:
Vˆ
ania Costa Ramos, Carlos Pinto de Abreu e Associados, Alameda Quinta de Santo Antonio, 13-C, Lisboa 1600-675,
Portugal.
Email: vaniacostaramos@carlospintodeabreu.com
Keywords
Victims, asset recovery, fraud, money laundering, regulation (EU) 2018/1805, cybercrime, CEO-Fraud
Introduction
The phenomenon of globalization and the growth of freedom of movement has led to an exponential
increase in cross-border crime.
1
The technological advances in computer and communication
technologies have resulted in ever greater risks related to cybercrime. In fact, a significant part of the
population has a digital identity, accessing the most diverse digital platforms for all kinds of
purposes (for example, social networks, e-mail, bank accounts, online commerce, etc.), which
makes them potential targets for fraud and, more specifically, computer fraud. In turn, the COVID-
19 lockdown has inevitably led to a significant increase in the purchase of products over the Internet,
with payments made through digital platforms such as home banking, enhancing those risks.
As a result, it is increasingly common for a lawyer to be contacted by victims of frauds with an
international dimension. Such contact takes place, as a rule, the moment they realize they have been or
are still being victims of crimes committed in their jurisdiction (often computer fraud or even traditional
fraud, but perpetrated at a distance), but that the proceeds of these crimes
2
have been or are still being
transferred to other jurisdictions very quickly. Even the traditional bankingsystem is used to dissipate the
proceeds of fraud almost instantaneously.
However, the existing international legal framework,
3
and relevant domestic laws, do not
explicitly give victims the necessary legal mechanisms to obtain the immediate freezing and
therewith the safeguarding of the return of their “stolen”assets. Even in the European Union, where
1. Vˆ
ania Costa Ramos, “A importˆ
ancia das redes de cooperação judici´
aria europeia em mat´
eria penal –qual o papel do
advogado?”,JULGAR 21/2013, p. 259.
2. On the concept, see João Conde Correia, “Apreensão ou arresto preventivo dos proveitos do crime?”,RPCC25/2015, p. 516, and
pp. 508-518; Pedro Caeiro, “Sentido e função do instituto da perda de vantagens relacionadas com o crime no confronto com
outros meios de prevenção da criminalidade redit´
ıcia (em especial, os procedimentos de confisco in rem eacriminalizaçãodo
enriquecimento "il´
ıcito”)”,RPCC 2/2011, pp. 271-273; Augusto Silva Dias, “Criminalidade organizada e combate ao lucro
il´
ıcito”, in Maria Fernanda Palma, Augusto Silva Dias & Paulo de Sousa Mendes, 2.° Congresso de Investigação Criminal, Org.
Associação Sindical dos Funcion´
arios de Investigação Criminal da Pol´
ıcia Judici´
aria and Instituto de Direito Penal - Ciˆ
encias
Criminais, Faculdade de Direito da Universidade de Lisboa, Almedina, Coimbra, 2010, pp. 30-32.
3. In fact, relevant international instruments in this field establish obligations or recommendations to take victims’interests into
account, but do not award specific rights to restitution or compensation –see e.g., Declaration of Basic Principles of Justice for
Victimsof Crime and Abuse of Power, adopted by the United Nations General Assembly in its resolution 40/34, dated November
29, 1985 (§§8,9). In the context of mutual legal assistance in criminal matters, international instruments only establish an
obligation for States to consider giving priority to returning confiscated property to the requesting Party so that it can give
compensation to the victims of the crime or return such property to their legitimate owners - see e.g. Article 25(2) of the Council of
Europe Convention on Laundering, Search, Seizure and ConfiscationoftheProceedsfromCrimeandontheFinancingof
Terrorism, adopted in Warsawon May 16, 2005; 2000 Convention against Transnational Organized Crime (also known as the
"UNTOC" or the Palermo Convention; Article 14(2); Convention against Corruption, adopted on October 31, 2003 (also known
as "UNCAC" or the M´
erida Convention). The 1990 Strasbourg Convention on Laundering, Search, Seizure and Confiscation of
the Proceeds from Crime did not mention victims, however,the Explanatory Report mentioned, regarding the possibility provided
by Article 15 of the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, the need to take
victims’interests into account. See Council of Europe, Explanatory Report to the Convention on Laundering, Search, Seizureand
Confiscation of the Proceeds from Crime, European Treaty Series –N.° 141, 1990, commentary on Art. 15, p. 17, available at:
https://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent?documentId=09000016800cb5de (consulted:
25.11.2022).
398 New Journal of European Criminal Law 14(3)
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