Reconsidering the effectiveness of an asset confiscation scheme
| Pages | 628-636 |
| Published date | 02 October 2017 |
| Date | 02 October 2017 |
| DOI | https://doi.org/10.1108/JFC-07-2016-0050 |
| Author | Andrew Torre,Dean Vogdanos,Robert Sdraulig |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
Reconsidering the effectiveness of
an asset confiscation scheme
Andrew Torre
Department of Economics, Deakin University, Burwood, Australia
Dean Vogdanos
Deakin University, Melbourne, Australia, and
Robert Sdraulig
SDR Law –Confiscation Law Specialists, Melbourne, Australia
Abstract
Purpose –The purpose of this paper is to suggest how the effectivenessof an asset confiscation scheme
might be evaluated by focussing on the currently operating Victorian model in Australia. For illustrative
purposes, the offence of traffickinga commercial quantity of cannabis has been chosen. This is a topical and
important issue, given two recent reports by the Victorian Auditor-General lamenting the absence of a
suitable framework for evaluating the scheme’s performance. Because these programs provide important
supplementarypunishment tools, it is desirable that methodologiesto gauge their efficacybe developed.
Design/methodology/approach –The approach to evaluating effectiveness is a mixture of
criminological andeconomic theory coupled with some basic empirics. Utilisinginsights from the theories of
valuing the social losses of crime and that of penalties provides a backdrop against which actual values
of confiscatedassets can be compared with ideal ones.
Findings –Comparison of actualand ideal values reveals a very considerable gapbetween the two, which
suggests that the scheme is being underutilisedrelative to its maximum potential. The value of seized assets
is well below the ideal order of magnitude.Even though the data on which this finding is based are sparse, the
frameworkcan be replicated as better statistics on the scheme’s operations becomeavailable.
Originality/value –The suggested methodology buildson and adds to current knowledge of evaluation
techniques for legal system programs.Hopefully, it will provide stakeholders with yet another lens through
which to view the operation of an asset confiscation scheme, and provide an impetus for collecting better
qualitydata.
Keywords Deterrence, Distributive and corrective justice, Gains-based penalty,
Harm-based penalty
Paper type Research paper
1. Introduction
Asset confiscation programs are commonly used to fight highly profitable and socially
harmful crimes. Section 3A of the Victorian Confiscation legislation, enacted as the
Confiscation Act 1997 (Vic)(the Act) lists three objectives:
(1) to derive persons of the proceeds of certain offences and of tainted property;
(2) to deter persons from engaging in criminal activity; and
(3) to disrupt criminal activity by preventing the use of tainted property in further
criminal activity.
The specific offences to which the legislation applies are found in Schedules 1 and 2. The
Victorian Auditor-General(VAG) in a recent audit of the Victorian scheme has found that at
JFC
24,4
628
Journalof Financial Crime
Vol.24 No. 4, 2017
pp. 628-636
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-07-2016-0050
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