Summary and Keywords
The genealogy of pecuniary punishments is a story of constant reformulation in response to shifting political pressures, changes in institutional and administrative arrangements, and intellectual developments that changed ideological commitments of legislators and practitioners. Within this chronicle of reformulation, broad transformations since the late 17th century are discernible. These legal transformations, most of which have been widely discussed and debated, help delimitate old and new forms of punishment and, to some degree, different modes of constructing punishment inside the criminal law. Based on the notion that the legal discussions during the 19th century set the stage for the profound reforms initiated by the emergence of consumer societies, the discourses that unfolded from around the end of early modern times until now are analyzed, even though few could have predicted the increase in the use of fines and confiscation that would occur throughout the 20th century. For the fine to reach such a state of ubiquity, one of its most criticized characteristics derived from its monetary nature had to undergo a severe scrutiny: the unequal impact on offenders caused by the unequal distribution of money between individuals in society. Confiscation, on the other hand, after having being extensively used by the Nazi, fascist, and Francoist regimes against “people’s enemies” and political opponents, was rediscovered as one of the most powerful weapons in the fight against organized crime during the war on drugs in the 1980s. In the 21st century it has become increasingly important for countries to be able to freeze and confiscate property related to the committing of an offense, thus depriving criminals of their illicitly obtained assets.
Making Offenders Pay
“Money is probably the most frequently used means of punishing, deterring, compensating and regulating throughout the legal system” (O’Malley, 2009, p. 1). Monetary punishments outnumber other penal sanctions (including custodial sentences) in many European jurisdictions, with just a few notable exceptions in countries such as Italy or Spain. They are ancient and widely used penalties in American courts, although historical development and actual trends are different from what we can see in western Europe.
The most important pecuniary punishment is the fine, understood as a sum of money required to be paid to the state by the offender as a penalty for a criminal or regulatory offense. Other “monetized sanctions” often mentioned include confiscation, civil forfeiture, restitution, punitive damages, liquidated damages, court fees, probation supervision fees, costs, bonds, or bail bonds. Although all of them involve an order to pay an amount of money, apparently meaning no difference for the offender’s pocket, their specific rationale and legal nature varies (Klein, 1997, p. 213; Ruback & Bergstrom, 2006).
This article focuses on fines and confiscation, understood as monetary sanctions that courts impose on the adult offender—and, eventually, even on an innocent third party—for the benefit of the public treasury. They are “offender-focused economic sanctions” (Ruback & Bergstrom, 2006, p. 256). The fine is defined as a sum of money required to be paid to the state as a penalty for a criminal or regulatory offense. A confiscation order is also an order for payment of a sum of money to the state but designed to deprive offenders and third parties of the benefit they have obtained from related criminal conduct, whether or not they have retained such benefit, within the limits of their available means in the present and in the future. We do not consider here other financial obligations that are not “sanctions,” properly speaking, but fees imposed for the administrative cost of offenders’ arrest, incarceration, supervision, or legal representation—court fees, probation and supervision fees, electronic monitoring fees, defence fees, even if many of these fees are legally defined as penalties and non-payment may trigger a warrant, arrest, or incarceration. Furthermore, we do not consider payments totally or partly owed to the victim or to symbolic victims, such as restitution, damages, or charitable donations. Nor does this article explain interim and precautionary measures that may precede confiscation, temporarily prohibiting the transfer, destruction, conversion, disposal, or movement of property, such as the freezing and seizure of assets. Forfeiture, which is an age-old term that denotes the removal of items whose possession is an offense—for example, drugs and of the instrumentalities of a crime (e.g., weapons or vehicles) is only mentioned to distinguish it from confiscation of proceeds.
The fine is unanimously considered a legal sanction, a pecuniary or monetary punishment. It is implemented not only in criminal law but also in other branches of the legal system. Confiscation, for its part, is considered a criminal sanction (i.e., a pecuniary punishment) by some legal systems, but it may also have other legal natures.1 It is a preventive measure and an ancillary consequence in Spain but a financial security measure in Italy, while it is considered a penalty, a security measure, or a compensatory measure, depending on modalities, in Germany and France. In England and Wales it is often maintained that the confiscation order is not part of the offender’s sentence but is essentially a civil remedy attached to a criminal process. Similarly, confiscation is not regarded as a penal measure in Denmark, Finland, Norway, or Sweden. In the United States confiscation takes two distinct forms, criminal and civil forfeiture, with the criminal variety operating as punishment for a crime, while the civil variety does not require a conviction or even an official criminal charge against the owner. This second variety has also been recently introduced in Europe, where it is known as non-conviction-based confiscation.
Fines and confiscation have a long and tortuous history. United by their rejection by the 18th- and 19th-century liberal governmentality, in the 21st century they represent two different yet distinctive trends of modern criminal policy: the fine as a means to search for alternatives to short custodial sentences and confiscation as a means to fight against organized crime and corruption. Although both are pecuniary punishments, which means monetary transfers to the state because an offense has been committed, conceptually the fine is different from the confiscation order when it comes to the terms and conditions for its implementation, the calculation of the amount to be paid, the consequences of non-payment, and even the level of cooperation of EU member states in the enforcement of sentences.
Where a fine is sufficient, a custodial sentence should not be imposed; when the latter is enough, the death sentence should not be imposed. With a fine, only the offender suffers the loss, not society; with a custodial or death sentence, society has to pay, with its own loss, for the punishment imposed on the offender; all excess backfires.
(Von Ihering, 1877 , pp. 292–293)
When one searches for the “origins” of a concrete form of punishment, what is often found is not a clearly identified problem and the proposal of a universally accepted solution, but the dissension of other factors. In the case of fines, this “other factor” is the penalty of imprisonment. The theoretical justification and practical application of fines depend largely on whether custodial sentences, and especially short-term imprisonment, are seen as an eligible, positive option capable of fulfilling the purpose of punishment or not. Europe and the United States have followed disparate trends in this regard.
In the European experience, prison and fines are essentially alternatives. The use of fines has expanded considerably since the 1970s, and in the 21st century is the most used sanction in many jurisdictions. From the perspective that short custodial terms should be avoided, the historical development of fines in Europe is based on the belief that the use of money as a sanction can greatly contribute to the reduction of imprisonment. Tariff and fixed-fine systems were adopted by the first criminal codes as a way of limiting the arbitrariness of the old regime in the assessment of fines. These systems were based upon understandings that the same or similar amounts of money should be imposed on all defendants coming before the court convicted of a particular offense. But the result of such fines was, eventually, the lack of deterrence for the richer offenders and the insolvency of the less affluent ones. Soon it was observed that punishing an offense with the imposition of a fine for a specific amount generally led to the legal imposition of inequality, an especially grievous consequence given that fine defaulters ended up in prison, even when they did not pay simply because of lack of means. In fact, imprisonment for fine defaulters gave the administration of justice the nature of a justice of classes, since the rich man paid, while the poor man went to prison. Therefore, a major topic of research and legal experimentation during the 19th and 20th centuries was how to achieve equalization of impact of the penal fine on poor and rich offenders, a condition seen as a necessary condition for the expansion of fines. This preoccupation did not extend to regulatory fines, usually imposed through tariff and fixed-fine systems. Regulatory law was born as a form of bureaucratic regulation not only of the great mass of minor offenses against the existing social order, mainly traffic and public order offences, but also of the new economic crimes against industrial, labor, and commercial laws. It is characterized by the monetization of the sanction. Regulatory fines do not affect liberty, not even in the case of non-payment. Payment of regulatory fines is encouraged by debt collection techniques such as reducing the amount of the fine if it is paid in short order and without contest, the compulsory sale of the person’s goods, or the charge of a further fee for administrative costs if the offender does not pay voluntarily. Once disarticulated from the possibility of imprisonment in case of default, regulatory fines allow expensive, time-consuming legal procedures to be curtailed and encourage guilty pleas. Regulatory fines can usually be imposed without an oral hearing or other formalities and to a lower standard of proof compared with what is used in criminal procedure. These technicalities have allowed standardization to achieve rapid processing of large numbers of cases and a higher administrative efficiency.
In the American experience, patterns of fine use vary widely, even within the same state or metropolitan area. Despite these variations, however, there are some common themes. Fines are a common, largely discretionary supplement to incarceration and probation in misdemeanor and felony cases. Imprisonment is generally seen as the only proper punishment for serious and medium-range crimes, with fines failing symbolically to serve the functions of punishment for them. Fines are often considered to lack a rehabilitative value. The dominance of the rehabilitative approach to penalties in the American criminal justice system precluded a wider use of fines, unless the commission of the offense was guided by greed or resulted in economic enrichment of the offender. This meant that expanding the use of fines as an alternative to short terms of imprisonment was generally considered inappropriate. As a consequence, their amount did not increase in money value in order to make them equivalent in severity to prison sentences. Therefore, fines have been criticized because of the perception that they have no effect on wealthy defendants. The poverty of offenders is also frequently cited as an obstacle to the broader use of fines, even for minor crimes. Fines are considered unenforceable, as it is unconstitutional to imprison offenders for non-payment of debt. Recognition of the intrinsic inequality of tariff and fixed-fine systems did not produce legal reforms oriented to equalize the impact of fines but rather reinforced American reliance on imprisonment as the primary means of punishing offenders. Little attention was paid to the developments of the fine in Europe.
Fines in Europe
The fine was a very important sanction in most European countries until the late 18th century. But it was subjected to severe criticism by enlightened intellectuals and philosophers (in Italy, Filangieri, 1788; in Germany, Von Feuerbach, 1804, p. 228; in Spain, Marcos Gutiérrez, 1826, pp. 145–147), with only a few but relevant exceptions, such as Beccaria (1764 ) and Bentham (1830). The reformers wanted “not to punish less, but to punish better” (Foucault, 1975 , p. 82). They preferred punishments whose numbers were widely divisible and multipliable, such as prison, arrest, and bail. Imprisonment lent itself extremely well to an exact gradation of the degree of punishment to the offense, much better than the death penalty or most of the corporal punishments. But the same advantages could be attributed to the fine. Why then were fines abandoned and imprisonment favored? The generalized acceptance of the program of reformation through hard labor by the end of the 18th century helps to explain the further rapid development of the idea of imprisonment over the next century. The fine was considered in this regard to have no reformative value at all. Deprivation of money could not be conceived as a morally improving factor in the same way imprisonment was, at least during the first half of the 19th century, when the use of the prison system responded to a philosophy of individual transformation and correction. The acceptance of the penalty of imprisonment as a more equal punishment than the fine is another explanatory factor of this shift toward custodial sentences. Liberty was something that every person should be deemed to possess in the same amount. In contrast, the use of fines as a punishment did not sit well with the formal understanding of the equality principle.
This flaw led to fines being relegated to the periphery of the catalogue of punishments. That is, until the late-19th-century critics of short-term imprisonment, while pointing out the pernicious practical effects of this, reawakened interest in finding a more egalitarian pecuniary punishment.2 Such a reformulated fine would allow for individualization in line with personal inequalities and be understood as a punishment that would adapt to the financial situation of the offender in order to avoid having to impose prison sentences for non-payment of fines, a major cause of imprisonment during the period. During the reform movements of the 20th century, the day-fine system was adopted in some European countries; in many other countries that did not adopt it, there was the obligation to take the offender’s economic situation into account. This meant that the objections to the inequality of the fine’s impact on offenders with different economic situations could at last be circumvented, if not completely solved. Viable alternatives to imprisonment for defaulters were developed, such as community service or the conditional suspension of sentence. A more widespread use of fines became possible, following the general tendency to avoid committing offenders to prison whenever possible. The generalization of the day-fine system marked a turning point in 20th-century European criminal policy. Only after the problems of equalization of impact and imprisonment for fine defaulters had been successfully addressed was the literature able to fully display the positive effects of fines, such as:
• their capacity to be adjusted in line with the seriousness of offenses and the offenders’ financial situation using criteria of proportionality and equality;
• their impact on a commodity appreciated by all;
• their economical enforcement, not so much in revenue earned by the state—considered unseemly -, but rather in reducing the costs involved in other punishments;
• their facility to provide reparation for an unjust sentence, because as they affect a “non-personal” commodity, it is easy to return the offender to the situation he or she was in before experiencing the punishment;
• their contribution to repairing the damage suffered by the victim;
• their lack of dissocializing and stigmatizing effects, compared to imprisonment; and
• their favorable capacity to not withdraw manpower from the economic system.
Description of the Day-Fine System
In the day-fine system (called the “unit-fine” system in the United Kingdom), the amount of the fine imposed is based on the seriousness of the offense as well as the offender’s ability to pay. The fine amount is arrived at through the application of a two-stage process. The number of days or units depends on the seriousness of the offense, usually between a minimum and a maximum. The amount of money to be paid every day depends on the offender’s ability to pay, which is also usually between a minimum and a maximum. The final amount is the result of the multiplication of the number of days of the first step by the amount of money to be paid every day of the second step.
First Doctrinal Formulations of the Day-Fine System
It is generally assumed that Thyrén (1910, p. 75) was the creator of the day-fine system. Thyrén’s work was undoubtedly the inspiration of the first European regulations of the day-fine system, and he coined the term “day fine” (Lappi-Seppälä, 2014, p. 1640), but his proposal occurred several years after the first descriptions of a two-stage breakdown of the method of calculating the fine amount could be found in literature.
In fact, the first doctrinal formulations of the day-fine system, defined in terms of the need to break the determination process of the fine down into two elements, are found at the end of the 19th century, almost simultaneously in Austria (Friedmann, 1892, p. 148) and Italy (Bertola, 1895, pp. 10, 12). They shared the idea of adopting a term of imprisonment as the basis for calculating the amount of the fine. In other words, they determined the penalty, then using a conversion method based on the offender’s financial situation, replaced each day of the penalty with a specific amount of money.
The Two-Stage Adoption of the Day-Fine System in Europe
The day-fine system was first adopted in Finland in 1921, through Law no. 130 of May 21, 1921, reforming the Penal Law. The primary reason for this reform was the rapidly declining value of money. Compared to summary fines, day fines could easily be adjusted to changes in the value of money brought about by inflation or recession, since the amount to be paid was tied to the level of income.
Other Nordic countries followed suit. The Swedish law amending some parts of the Penal Law, no. 327 of September 24, 1931, adopted the day-fine system. The law on special fines, no. 328 of the same date, regulated the implementation of the day-fine system in the secondary criminal law. The main aim of both legal norms was to depopulate the prisons, stating primarily that fine defaulters should not be sentenced to imprisonment. And in fact, although heavily criticized, the reform took about 10,000 prisoners out of prison in the following ten years (Bondeson, 2009, p. 417). In 1937 another statute required a second examination of the case before commutation of unpaid fines into imprisonment, opening up the possibility of remission of sentence for offenders unable to pay the fine through no fault of their own, unless commutation was considered necessary for their reform. This regulation, according to the official commentary on the statute, had “its basis in the danger of insecurity which might arise if fines inflicted upon paupers could not be commuted even in cases of recidivism.”
Shortly after, law no. 87 of March 15, 1939, on amendments and additions to the 1930 Civil Penal Code introduced the day-fine system in Denmark, albeit “in a half-hearted way against strong opposition,” the common opinion being that it never worked well in that country (Thornstedt, 1975, p. 307).
Finland, Sweden, and Denmark were the only European countries to introduce the day-fine system during the first half of the 20th century—the reason why the day-fine system is also known as the “Scandinavian system,” although after Finland two American countries, Peru in 1924 and Mexico in 1929, were the next adopters of the new system. As Albrecht (2001, p. 306) pointed out, “The concept generated substantial controversy in all three Scandinavian countries, and was far from being unanimously supported.” Other countries, such as Austria, England, Germany, or Switzerland, made substantial revisions regarding fines during the 1920s and 1930s. And while these countries did not adopt the day-fine system, some cases produced excellent results in terms of reducing short-term prison sentences.
Starting in the 1960s the debate on prison alternatives was revived as a consequence of increasing prison populations and disillusion with imprisonment. This revival resulted in a greater interest in the fine, both as a sole penalty and as a substitute for imprisonment. A second wave of national implementations took place starting in the last third of the 20th century. The Federal Republic of Germany and Austria introduced the day-fine system in 1975, followed by France and Portugal in 1983, England and Wales in 1992 (though briefly) Spain in 1995, and Switzerland in 2007. This wave of legislative changes essentially marked a turning point in European criminal policy, similar to the one in the 18th century, which led to the abandonment of corporal penalties and their substitution with imprisonment. The different national outcomes regarding the day-fine’s impact on the reliance on imprisonment and its potential in terms of decreasing the use of imprisonment for defaulters are related to the conditions under which the day-fine system is executed. In particular, the rules governing the choice of penalties and the conversion of unpaid fines into imprisonment are of utmost importance (Faraldo-Cabana, 2017).
Advantages of the Day-Fine System
In the day-fine system the fine handed down is both proportionate to the offense, expressed in temporal units, days, or months, and is reflective of the offender’s means, expressed in a certain sum to pay every day. Thus, the system does not offend the proportionality principle between crime and punishment, or the equality principle between rich and poor offenders. Furthermore, it offers a calculation procedure from which both the offender and the community can discern the reasons underlying the amount of the fine, “so that the outcome is more visible as well as more rational” (Hillsman, 1990, p. 76).
The important question of how to translate day-fines into prison terms for fine defaulters is answered in an effective way: one, two, or three temporal units of the fine for one day in prison. This approach nullifies differences between income groups of criminals, because the number of days in the day-fine system is fixed according to the seriousness of crime and not keyed to the amount of the unpaid fine.
Disadvantages: The English Bad Experience of Unit Fines
Day fines are no solution for people with no means at all. On the one hand, even a light fine with prison in case of default imposed upon a bankrupted offender is in essence a sentence of imprisonment. On the other hand, there is a continuing debate about whether lower limits are too low to be taken seriously. In cases where the offender is dependent on social care, so that the state provides resources thought to represent a minimum level of maintenance, it is incoherent to push the offender below that level with a day fine—thus rendering alternatives for poor offenders necessary.
However, this problem also exists on the other end of the fine scale. While it is possible—and quite common—to put a maximum limit both on the duration and the amount of the fine, establishing a maximum limit on the duration and the amount of the fine prevents the penalty from being adapted to suit the real economic capacity of the wealthy. The problem here is not that poor people cannot pay fines due to a lack of means but rather that affluent people are so rich that fines, even hefty ones, only pose a minor annoyance (Baumann, 1968, pp. 29–30). Further consideration of approaches to account for high incomes and capital assets would be useful (Hillsman & Greene, 1992, p. 139). Moreover, the question as to whether people can effectively hide their financial status is always open to discussion, especially if one takes into account the ability of the wealthy to hide their financial holdings and the difficulty of assessing the wealth of those who earn their income through illicit activities. These considerations are particularly crucial, since virtually all advantages attributed to the day-fine system depend on reliable and valid information about the offender’s financial situation.
In any case, it is important to explain the functioning of the day-fine system to the public and the courts, since their acceptance is crucial to the system’s success. A high fine for a petty offence imposed on a rich offender can be viewed as outrageous if the reasoning is not effectively communicated to the public, while those operating the system should also understand and accept both its principles and its practical implications. The English experience with the unit-fine system between 1991 and 1993 is a good example of this.
The unit fine scheme was introduced by the Criminal Justice Act 1991. Although it achieved certain desired goals—the increased use of fines compared to other punishments, a lower average fine for unemployed people, and a higher average fine for employed people—the scheme ultimately failed. Despite combining “simplicity,” “fairness,” “clarity,” “greater precision,” “effectiveness,” and “consistency” (Gibson, 1990, p. 11), the system was repealed in May 1993, in what has been described as “perhaps the most astonishing volte face in the history of the English justice system” (Cavadino & Dignan, 1997, p. 211). A media campaign highlighted high fines for middle-class motoring offenders and small fines for similar offences committed by poor people, without explaining that differences were due to different incomes, as a way of avoiding other disparities. As Warner (2012, p. 231) put it, “[The scheme] was not well explained to the public and the press were able to ridicule it.” Statements both in the media and among magistrates repeatedly ignored the elementary justice of the principle of equal impact. As a result, the unit fine was thought to be unfair for the better off. Middle-class people were seen as victims of an unfair system of punishment.
Use of Fines in Europe: An Overview
Currently 23 European countries have implemented the day-fine system in their criminal justice systems.3 Most of these were in combination with the tariff system for regulatory fines or certain cases of penal fines for minor offences. Still other countries had fines established in proportion to the damage caused, the value of the object of the offense, or the profit obtained from it. In countries such as Austria, Germany and Portugal fines have been given statutory priority over short-term imprisonment. However, even though many countries share a similar fine system, the number of sentences that are fines and their percentage to total convictions varies widely across jurisdictions. For example, fine sentences represent approximately 88% of total convictions in Finland; 84% in Denmark; about 70% in Germany, Portugal, and the United Kingdom; 40% in France, Greece, and the Netherlands; and less than 30% in Spain and Sweden. Eastern Europe also shows low percentages. In Italy the tariff-fine system collapsed in the 2000s due to constitutional and organizational issues. Fine sentences only represent circa 15% of total convictions, the majority of which are not executed but suspended. On the contrary, the tariff system in England and Wales resulted in more than 70% of fines to all convictions thanks to careful consideration of the offender’s financial circumstances and well-conceived alternatives in case of default. Detailed but not yet updated data can be found in the European Sourcebook of Crime and Criminal Justice Statistics (2014, p. 196).
The EU legal framework on fines is limited to the Council Framework Decision 2005/214/JHA of February 24, 2005, on the application of the principle of mutual recognition to financial penalties that introduced specific measures under the principle of mutual recognition. This allowed a judicial or administrative authority to transmit a financial penalty directly to an authority in another EU country and to have that penalty recognized and executed without any further formality. The concept of “financial penalty” includes “a sum of money on conviction of an offence imposed in a decision”—that is, penal, regulatory, and civil fines—but also victim compensation and court and administrative fees imposed to cover the costs of proceedings leading to the decision. This Framework Decision follows the pattern of other mutual recognition instruments and includes not only criminal judgments but also out-of-court settlements and procedural agreements. Its scope also extends to decisions of administrative authorities, considering that the national legal systems of the member states differ as to the existence of regulatory offenses or administrative criminal law. Thus, a penalty imposed for a certain violation of the law may be categorized in one member state as a criminal penalty whereas the same penalty constitutes an administrative fine in another member state.
The Framework Decision 2005/214/JHA was amended by the Framework Decision 2009/299/JHA of February 26, 2009, enhancing the procedural rights of persons and fostering the application of the principle of mutual recognition to decisions rendered in the absence of the person concerned at the trial.
Fines in the USA
While it is quite normal to speak about the American exceptionality in the criminal justice system, especially regarding the use of imprisonment, it is less clear whether we could use the same concept regarding fines. Authors highlight the scarce use of fines in America, often showing some perplexity. As Klein (1997, p. 215) puts it, “[A]s perhaps the premier capitalistic country in the world, one might expect fines to play a larger role in our criminal justice system.” The same idea can be found in O’Malley (2009, p. 45), when he says that “[i]n many ways, a society and economy that emphasizes financial incentives so strongly, and lionizes market processes, is the ‘logical’ place for this commodified sanction to thrive.” In practice, almost nothing could be further from the truth, which is doubly interesting because penal fines have been vigorously championed by the influential law and economics movement, as highlighted by O’Malley (2009, p. 55). But despite the support of some key figures in the ranks of economics scholarship, such as Gary Becker and Richard Posner, and despite law and economics having become the neoliberal rationality of government par excellence, fines have not moved to a position of greater prominence in the United States. Why?
The fact is that fines were the most common punishment in colonial-era America, although they were associated with an explicit class bias in terms of the ability to pay and escape other punishments. Like in pre-19th-century Europe, corporal punishments and penal servitude were the only alternative sanctions for poor people and slaves while, in contrast, the propertied class had the economic means to literally “pay” for their crimes through penal fines. Nowadays fines are extensively used in American courts, generally as an add-on to a custodial or even to a non-custodial sentence, but not as an alternative to imprisonment. As sole penalties they are normally used for minor and traffic offenses but rarely for more serious crimes, such as felony cases (Beckett & Harris, 2011). Some factors can explain this contrasting situation to Europe.
America still uses the tariff-fine system. In this system, the amount of the fine to be paid is fixed for any particular offense based on its seriousness. Some statutes establish a minimum and a maximum between which courts may discretionally decide the appropriate amount. If the tariff is set high, poor offenders are disproportionately impacted and more likely to suffer the consequences of default for non-payment. A belief in the fundamental inequality of penal fines can be traced throughout American history (Miethe & Lu, 2005, p. 90), which may explain the general distaste of courts for a pecuniary punishment that has little impact on the affluent offender and a harsh impact on the poor one. Non-payment of fines was a major cause of imprisonment in the United States in the 1960s and 1970s. In 1971 imprisonment for indigent offenders who could not pay their fines was deemed by the U.S. Supreme Court to be in violation of Fourteenth Amendment rights to equal treatment (see Tate v. Short 401 US 400). Courts were slow to adjust to this decision, which further undermined the perceived usefulness of fines because of the reduction in collection percentages and the perception that fines cannot be enforced against the poor.
On the contrary, if the fine is set low, it will have little penalty value for wealthier offenders, which means that the sentence will fail to fulfill its potential for retribution and deterrence. Because most offenders tend to be poor and unemployed, tariffs are typically set at the lower end of the statutory range to ensure that they are credible (i.e., collectible). Fines have traditionally been limited to amounts so low that they cannot seriously be considered as even roughly equivalent to a term of imprisonment (Morris & Tonry, 1990, pp. 116–117; Klein, 1997, p. 215; Miethe & Lu, 2005, p. 89). This decreases fines’ punitive potential and makes them less appropriate for serious offenses. Moreover, they are perceived as lacking a rehabilitative value, unless the commission of the offense was guided by greed or resulted in economic enrichment of the offender. Consequently, legislation contains no provision for the use of fines in place of short-term prison sentences, limiting them to a supplemental role, or “something to be imposed in addition to the real sentence” (Morris & Tonry, 1990, pp. 116–117), except in the two cases mentioned. This precluded a wider use of fines, which were made to appear unfair and non-progressive. Pilot projects with schemes similar to the day-fine system were tested in the 1980s and 1990s (Turner & Petersilia, 1996), but in the end they did not result in changes in legislation.
In sum, the confluence of all these factors helps to understand, firstly, why in the United States fines have never been seen as comparable to short terms of imprisonment. Secondly, we can see why the argument related to the intrinsic inequality of tariff-fixed fines, although widely recognized, never caught on in the United States. In a country characterized by high levels of punitivism, punishment is expected to go beyond “just money” to a loss of liberty.
Confiscation of property has been historically used as punishment, especially for political enemies. Though most legal systems did not provide for the confiscation of proceeds from crime until recently, it is now considered a key strategy for disrupting criminal activity, especially economic and organized crime.
Confiscation refers to the permanent deprivation of property implicated in a crime: property that may belong to an innocent party by order of a court or some other competent authority. The property could be used to commit the crime (the instrumentum sceleris, particularly vehicles and weapons) or could be its product (the objectum sceleris, e.g., the drugs trafficked, the tobacco smuggled). Or this property could mean the profits drawn from committing a crime—the productum sceleris. Deprivation of the instrumentalities and products of crime is generally known as forfeiture. Confiscation of profits drawn from committing a crime seeks to deter criminality by reducing its profitability, as well as diminishing offenders’ ability to finance further criminal activity. In addition, confiscation schemes aim to redress imbalances by compensating society for the adverse impacts of criminal activity and reimbursing the state for the costs incurred in fighting crime. Finally, it is argued, there is public utility in demonstrating to the community that crime “does not pay”: “seizing criminals” assets … is a key tool of law enforcement. It reduces crime … and ensures (and shows) that crime does not pay” (Home Office, 2008, p. 36).
In fact, the widespread use of confiscation of the proceeds of crime is based on the principle, deeply ingrained into the law, that people should not profit from unlawful activities in general and from crime in particular (critically, Manes, 2016). With regard to economic and organized crime, significant consideration has been dedicated to the role of confiscation in upholding the “crime does not pay” principle. The aim of confiscation is to compel the offender to disgorge the profit of crime, since it is generally accepted that one of the most effective ways of reducing the number of such crimes is to reduce the incentive for the offender who enjoys the use of the proceeds of crime.4 It has even been argued that the traditional responses to crimes of greed are ineffective, the better alternative being to follow the money trail (Pieth, 1990). However, it is not clear that confiscation laws are having the expected effect in terms of adversely impacting criminal activity, especially in the context of organized crime. Although the extent to which offenders are deprived of their assets can be assessed to some degree from the scarce, partial, and unreliable available statistical data, the extent to which they are deterred from committing further crime is harder to measure. This claim has probably never been subjected to any empirical research. More generally, little has been done empirically to test whether the promises of confiscation legislation have been realized. Confiscation statutes have triggered important changes in criminal law without any proper effectiveness analysis (see, e.g., Vettori, 2006, Van Duyne et al., 2014), even though it is widely recognized that an assessment of the effectiveness of this legislation is crucial to policy decisions. Therefore, assumptions grossly exaggerating the benefits that may be drawn from confiscation policies deserve careful inspection.
Types of Confiscation
In the 21st century there are two means by which proceeds of crime can be recovered: criminal confiscation and non-conviction-based (or civil-based) confiscation. In either criminal or civil confiscation, the commission of a crime is traditionally a necessary precursor of the proceeding. It is well known that both types of confiscation serve as a more or less efficient deterrent, thus fulfilling a traditional goal of punishment, even though the primary goals of the civil variety are remedial and non-punitive. Criminal confiscation is an in personam proceeding against a defendant who forfeits nothing unless he or she is convicted of a crime. In such proceedings courts use the highest burden of proof standard, while constitutional and common criminal procedural protections are provided for defendants. Conviction-based laws were considered to be ineffective, and so jurisdictions increasingly introduced non-conviction-based forfeiture laws. Civil forfeiture usually proceeds by way of an in rem action directed against the property itself, not the owner. The guilt or innocence of the property owner is irrelevant. Civil forfeiture allows the restraint and recovery of assets suspected of originating from criminal activities without the necessity of securing a criminal conviction. Under many in rem forfeiture statutes, the government only needs to establish a “probable cause” standard of proof that the property being sued is forfeitable, either because it was used or intended to be used to facilitate a criminal offense, or because it represents the proceeds of illegal activity or property that has been purchased with those proceeds. Civil forfeiture statutes are usually regarded by prosecutorial and judicial authorities as a measured response not only necessary in practice but justifiable in principle and consistent with the presumption of innocence. Nevertheless, they have received substantial criticism from civil libertarians who see evidence of a new despotism in criminal law violating fundamental rights and potentially inflicting collateral damage on innocent parties. The truth is that since the introduction of these laws, they have been made progressively more severe, which subjects them to many constitutional challenges. Some jurisdictions have also adopted “unexplained wealth” provisions to tackle the indecent display of ill-gotten riches. Unexplained wealth legislation takes civil forfeiture one step further in that there is no need to prove that the assets’ owner has engaged in criminal activity but merely that the value of her properties is disproportionate to her lawful income. The onus then lies with the suspected individual to establish that the wealth has been legally obtained.
A new model of forfeiture and confiscation used to fight against terrorist financing affects the assets not by reason of their illicit origin but because they are likely to be used for the purposes of terrorism, so that the defendant cannot avoid confiscation by proving the legal origin of the proceeds. The Financial Action Task Force (FATF) has issued guidance for financial institutions in detecting terrorist financing activities, but it has proven to be extraordinarily difficult to draw a profile of a terrorist financing activity that does not include a massive number of ordinary transactions. Expansion of powers to tackle terrorist finance is feared to result in the trampling of civil liberties.
Confiscation in Europe
Confiscation is an ancient pecuniary punishment. It was widely used in Roman and medieval law, mostly in the form of seizure of all properties of the offender by the public authority. Total confiscation was understood as an instrument of purification of the community, eliminating every trace of the offender. This perception was clear not only in Roman law (Lehmann, 1904, pp. 94–95; Brasiello, 1937, p. 115) but also in Germanic law (Giffuni, 1995, p. 504). Using the same idea in England, the Corruption of Blood laws deprived the heirs of a person convicted of a felony of all their rights to the convicted person’s property (Blackstone, 1825, pp. 375–376). Similar laws were enacted in other European countries during the old regime. For instance, Spain passed confiscation laws that usually only applied for serious crimes such as high treason or offenses against majesty (Masferrer Domingo, 2009, pp. 105–108). However, the situation changed completely during the Enlightenment, with the emergence of modern criminal law.
The injustice of the complete confiscation of assets was generally accepted in the late 18th century (Beccaria, 1764 ; Robespierre, 1785; Von Soden, 1792, p. 103), and this stance was reflected by 19th- and early-20th-century European literature (Von Feuerbach, 1804, pp. 163–164; Von Abegg, 1836, pp. 206–207; Jordão, 1853, p. 231; Puccioni, 1855, pp. 203–204; Birkmeyer, 1901, p. 1064). The main reason was the acceptance of the personality principle of penalties, according to which it is considered unfair to punish an innocent person in place of some other guilty individual. This principle of guilt, expressed in the Latin aphorism poena non alios quam suos teneat auctores (i.e., misconduct should only bind its own authors), has been considered a cornerstone of the theories of crime and punishment since the Enlightenment (Beccaria, 1764 , chapters 17 and 35; Von Feuerbach, 1805, p. 237). As a result, complete confiscation was abolished to ensure this principle, preventing any impact on the innocent offspring. This explanation is found in the main legislative texts of the time: the 1786 Penal Code for the Grand Duchy of Tuscany; the French Decree of the Constituent Assembly of January 21, 1790; the 1812 Spanish Constitution; the 1818 Baden Constitution; the 1822, 1826, and 1838 Portuguese Constitutions; the 1831 Hessen Constitution; and the 1848 Prussian Constitution. The notion of the injustice of the complete confiscation of assets based on the impact on innocent third parties was so generally accepted in European literature of the second half of the 19th century that when the German Imperial Penal Code was passed in 1871, it even stated in its reasoning that “confiscation should only apply to certain objects. We do not consider it necessary to emphasise this.” As a matter of fact, prohibiting total confiscation was not even mentioned in the final text.
After being abolished in the 19th century, total confiscation reappeared and gained renewed force under the Nazi regime in Germany (Schnieders, 2002, p. 450), the fascist regime in Italy (Vassalli, 1951, p. 4), and the Francoist regime in Spain (Manzanares Samaniego, 1983, p. 252), only to disappear again when these regimes collapsed and their consequences, such as the prosecution of collaborators of the defeated regimes, faded away. Starting in the 1970s, confiscation reemerged as a crime prevention tool that went hand in hand with the growing interest in fighting drug trafficking and related drug problems.5 This reemergence marked the beginning of the so-called age of proceeds (Gallant, 1999, p. 323). Confiscation has since then been extended to organized crime at large (Bettels, 2016; Maugeri, 2012).6 Organized crime has become an important rhetorical device in the debates on criminal profits. The concept has shown an enormous policymaking leverage. What is organized is serious and consequently contributes to the seriousness of the narrative. Therefore, measures that serve the fight against organized crime are easier justified. In this context, confiscation of ill-gotten gains is considered a key element in any modern strategy against criminal enterprises, corruption, money laundering, and terrorist financing. Its recent history in Europe is one of continuous expansion in spite of an insurmountable gap between political expectations and empirical results.
Italy was the first European country to go beyond traditional forms of confiscation, which were perceived as effective in straightforward criminal cases but too limited in scope and unsuitable for more complex ones involving the concealment of the criminal origin of profits. Dissatisfaction with the early confiscation regimes put in place produced legislative changes intended to overcome the infrequent use of confiscation orders by the courts and achieve a more significant impact on criminal assets. The main reason why confiscation legislation had proven ineffective lied originally in the many difficulties in reaching a criminal conviction of the offender due to the high standard of proof and the various constitutional rights secured to the accused. These legislative shortcomings led to the emergence of new strategies. In 1982 and 1992 extremely severe forms of extended confiscation—non-criminal and criminal, respectively—were introduced to seize and confiscate proceeds obtained by Mafia members.7
The Italian legal developments in the field of modern confiscation measures were subsequently imitated by other European countries (see an overview in Albrecht, 1998, p. 180), especially since some decisions showed the apparent inability of legal systems to deprive the defendant of the profits of her offending, causing substantial public concern. For example, this was the case in the United Kingdom, where the House of Lords’ judgment in Cuthberson and Others, June 12, 1980, resulted in the Hodgson Committee on Profits of Crime and their Recovery reporting in 1984 about the convenience of making provisions for the confiscation of the benefit of drug trafficking. Many of its recommendations were taken up and enacted in the Drug Trafficking Offences Act 1986. With the Criminal Justice Act of 1988 the confiscation regime was extended to general criminal conduct. In the next few years, new statutes and amendments were implemented to render the system more effective, including a huge leap forward in the use of civil procedures to deal with criminal acts. On the contrary, the German-Scandinavian approach differed from both the Italian and the common law approaches in that confiscation without a criminal conviction is seen with suspicion, and the non-based-conviction procedures are rarely used in practice.
Implementation of new measures was fueled by the EU and the Council of Europe. Both organizations began in the late 1990s to emphasize the importance of proceeds confiscation in order to combat drug trafficking, organized crime, and corruption.8 In particular the EU had a leading role in persuading European countries to enhance proceeds from crime confiscation provisions, or to introduce them ex novo (Bell, 2000, pp. 24–27; Vettori, 2006, p. 7), despite the fact that its powers in the field of criminal law have been historically rather limited.
Use of Confiscation in Europe: The EU Approach
The EU has played an active role with regard to the confiscation of proceeds of crime. Via numerous acts and documents, they have requested that member states adapt their national legislation so as to enable the seizure and the confiscation or removal of the instruments and proceeds of different types of crime and to facilitate the exchange of best practice in prevention and law enforcement.
The current EU legal framework on confiscation and recovery of criminal assets consists of four main instruments. Two of them are harmonization instruments, namely Council Framework Decision 2005/212/JHA of February 24, 2005, on confiscation of crime-related proceeds, instrumentalities and property, and Directive 2014/42/EU of the European Parliament and of the Council of April 3, 2014, on the freezing and confiscation of instrumentalities and proceeds of crime in the European Union. The other two are mutual recognition instruments, namely Framework Decision 2003/577/JHA of July 22, 2003, on the execution in the European Union of orders freezing property or evidence, and Council Framework Decision 2006/783/JHA of October 6, 2006, on the application of the principle of mutual recognition to confiscation orders.
Even though national confiscation regimes in the EU member states “followed a clearly recognisable evolutionary pattern that can be described, given the severity of its constitutive elements, as being based on the motto ‘tough on criminal wealth’” (Vettori, 2006, p. 7), harmonization measures have been patchy and too limited (Vettori & Zanella, 2011; Fazekas & Nanopoulos, 2016). As a result, there are important differences between member states’ confiscation regimes. Here is an overview of the main types of confiscation in the EU:
• Ordinary confiscation is a final deprivation of property ordered by a court in relation to a criminal offense and directed against an asset that is the direct proceed of a crime.
• Extended confiscation is a confiscation measure that goes beyond the direct proceeds of a crime, where the property seized is derived from criminal conduct.
• Third-party confiscation is a confiscation measure made to deprive someone other than the offender—the third party—of criminal property, where that third party is in possession of property transferred to him by the offender or acquired by him from a suspected or accused person, at least if this third party knew or ought to have known that the purpose of the transfer or acquisition was to avoid confiscation.
• Value-based confiscation is a confiscation measure by which a court, once it determines the benefit obtained by an individual from criminal conduct, imposes an order for the payment of money, which is realizable against any property of the individual;
• Non-conviction-based confiscation is a confiscation measure taken in the absence of a conviction and directed against an asset from illicit origin. It covers cases where a criminal conviction is not possible because the suspect has become ill or fled the jurisdiction, has died, or where the statute of limitations has lapsed. It also applies to cases of action against the asset itself, regardless of the person in possession of the property.
It should be noted that, in Europe, confiscation has traditionally been in personam, with the more stringent criminal and civil confiscation measures conflicting with fundamental rights enshrined by European Constitutions and by the European Convention on Human Rights: to wit, the right to property, the proportionality of the punishment to the seriousness of the offense and to the personal culpability of the offender, as well as the presumption of innocence and the right to a fair trial (Maugeri, 2012).9 Only a small number of EU member states, in fact, have decided not only to strengthen their criminal confiscation laws but also to provide for confiscation in civil proceedings as well. Others still consider it questionable whether the civil asset recovery model would be in harmony with the fundamental rights as guaranteed by their constitutions. Consequently, these member states limit the scope of orders that they will enforce by rejecting in rem confiscation, non-criminal-proceedings-based confiscation, or confiscation orders resulting from trials in absentia (Albert et al., 2014, p. 85). Differences both in terms of legal nature and forms of confiscation and in terms of the objectives of confiscation measures create difficulties in the mutual recognition of confiscation orders. As a result, recognition of confiscation orders continues to be mainly based on general rules of cross-border cooperation and mutual legal assistance.
In spite of significant efforts having been made to develop efficient rules enabling the authorities to forfeit assets derived from crime, confiscation of criminal assets remains underdeveloped and underutilized in the EU member states (European Commission, 2012, p. 2). It is indisputable that the value of criminal assets recovered in the EU can be considered insufficient, especially if compared to the estimated revenues of criminal organizations. Some data suggest that less than 0.2% of criminal assets are recovered in the world (UNODC, 2011). The estimated criminal assets finally confiscated at EU level seem to be higher: 1.1%, according to Europol (2016, pp. 4, 8–10). Percentages decrease enormously when criminal assets are located in several member states as is increasingly the case in the EU. Only very few freezing and confiscation orders are executed in other member states, which indicates that the EU legal framework does not work properly. The EU record of tracing and seizing the assets of terrorist organizations is even worse, evidencing that measures adopted against terrorist financing have had little more than a marginal effect in depriving terrorists of their funds (Acharya, 2009, p. 133; Van Duyne et al., 2014, p. 235).
New powers are not enough. The point is how these new possibilities are used in practice, and the practice has fallen short of expectations. As Vettori (2006, p. 119) puts it, “The ‘tough on criminal wealth’ philosophy is far from being deeply rooted in the everyday practice of law enforcement agencies, especially judicial ones.”
Confiscation in the United States
English forfeiture law was unpopular in colonial America. In England, forfeiture of property to the Crown automatically followed most felony convictions, regardless of the property’s relationship to the crime. “Americans eventually developed an aversion to the forfeiture of property after learning of the widespread abuses of criminal forfeiture in England” (Gormley, 2005, p. 550). This rejection was reflected in the Constitution and subsequent early legislation. The Fifth Amendment requires due process of law as a protection of property. Article I outlaws bills of attainder, and Article III specifically forbids automatic forfeiture for treason. The Act of April 30, 1790, outlawed forfeiture of a defendant’s estate after conviction of a felony. The concept of in rem proceedings against a thing for violating the law was incorporated into American customs and admiralty laws governing the seizure of ships for crimes of piracy, treason, and smuggling in the early days of the Republic. After the Civil War, American forfeiture law began to expand and be used against property owned by Confederate soldiers and sympathizers. In rem forfeiture was also used during Prohibition to combat the illegal alcohol trade. Although these forfeitures were challenged as unconstitutional, they were upheld based on the previous use of in rem forfeiture during the Civil War. Nevertheless, the groundwork for the expansive use of forfeiture against organized crime during the war on drugs in the 1970s and 1980s had been put in place (Rolland, 1999, p. 1373).
The best example of a civil forfeiture law, since Prohibition, was the Comprehensive Drug Abuse Prevention and Control Act 1970, which authorized the forfeiture of the illegal substance involved in the commission of an offense and all instrumentalities used in the manufacturing and distribution of the illegal substance. In 1978 the Act was amended to provide for the forfeiture of all the proceeds from an illegal drug transaction and also for an innocent owner defense. In 1986 the Anti-Drug Abuse Act expanded civil forfeiture to include the proceeds of money-laundering activity. After 1986, federal forfeiture provisions were added piecemeal as additional federal crimes were added to the criminal code, or to provisions already criminalized, such as child pornography, corruption, bank and bankruptcy fraud, government program fraud, and mail and wire fraud, so that in the 21st century there are over 200 federal and state laws that are predicate crimes for money laundering and forfeiture.
All forms of criminal forfeiture were unknown in American jurisprudence until 1970. It was then that two statutes were enacted that provided the federal government with criminal forfeiture authority, namely the Racketeer Influenced and Corrupt Organizations Act (hereinafter RICO) and the Comprehensive Drug Abuse Prevention and Control Act. The passage of the Comprehensive Crime Control Act 1984 further expanded forfeiture authority. Confiscation became a major tool in the war on drugs.
Use of Confiscation in the USA: An Overview
The United States has a robust and effective forfeiture legal regime, stimulated by the fact that forfeited proceeds are divided among the agencies that participated in joint investigations, which creates additional incentives to increase law enforcement activities (Levy, 1996, pp. 1–2) but also a bias toward low-level cases that can bring in money and property even if, relatively, the crimes are not that serious (Ruback & Bergstrom, 2006, p. 258). The American experience with civil or non-conviction-based asset forfeiture spans more than two centuries. Civil forfeitures in the federal system are authorized by Section 881 of the Comprehensive Drug Abuse Prevention and Control Act. Currently the three main criminal forfeiture statutory provisions are the RICO, the Continuing Criminal Enterprise statute (CCE), and the Money Laundering Control Act 1986 (MLC). They are used to combat the profitable business of criminal enterprises, allowing not only for the seizure of profits illegally gained by these enterprises but also for those legally gained. Although criminal forfeiture is less controversial than civil forfeiture, literature and courts have criticized the broad scope of both types of statutes as being too expansive (see a brief discussion on how some of the most prominent issues about civil confiscation were resolved in Cassella, 2015, pp. 26–29).
The significant procedural differences between civil and criminal forfeitures led at the beginning of the 21st century to an almost exclusive use of civil forfeitures in the United States, even after the passing of the Civil Asset Forfeiture Reform Act in 2000 (henceforth CAFRA), which shifted the burden of proof from the property claimant to the government, removed the requirement of cost bonds, and required the immediate release of seized property if the seizure would cause a substantial hardship, giving claimants for the first time a right to counsel in limited circumstances. In recent years, however, criminal forfeiture appears to have become the procedure of choice when judicial proceedings are required (see the U.S. Attorneys’ Annual Statistical Report Fiscal Year, 2015). Statistics do not include civil administrative forfeitures, which provide the highest amounts of forfeited cash in the United States.10 Therefore, it is not clear where the balance would stand if administrative forfeitures were added to the civil forfeiture side of the equation.
In the United States, forfeiture has become an important tool for victims in the recovery and preservation of illicit gains arising from financial crimes such as fraud, embezzlement, and theft. Under the CAFRA of 2000, the Department of Justice has the authority to return forfeited assets to victims of any offense that gave rise to forfeiture. Accordingly, forfeited assets may be returned to victims of all offenses for which a related civil or criminal forfeiture order is obtained. The vehicle through which the Department of Justice ensures that return of forfeited assets to victims is the Victim Asset Recovery Program (VARP). These provisions are used to justifying the widespread use of asset forfeiture in the United States, where it has transformed from an obscure customs penalty to a huge business, becoming one of the most powerful and important tools that federal law has against all manner of criminals and criminal organizations.
Review of the Literature and Further Sources
Pecuniary punishments, in particular fines, outnumber other penal sanctions (including custodial sentences) in many European jurisdictions. Even in the United States they are extensively used. In light of its wide use, the small amount of attention sociologists of punishment and social control, legal scholars, and criminologists give to the role of money in the criminal justice system is extremely surprising, with conceptual and empirical priority having been given to other sanctions that statistically speaking are less common. As Grover (2008, p. 178) puts it:
There appears to be an inverse relationship between the amount of literature regarding particular punishments and their incidence. In other words, a great deal has been written about imprisonment, but far less has been written about fines.
One could think this assertion is not entirely correct since there is a vast amount of literature on the specific characteristics of fines as a legal sanction (in Germany, Jescheck & Grebing, 1978; Albrecht, 1980; Von Selle, 1997; in Italy, Goisis, 2008; Miedico, 2008; in Spain, Manzanares Samaniego, 1977, 1983; Roca Agapito, 2003). And while it could be possible to agree with this assertion regarding two Anglophone countries (the United Kingdom and the United States), in continental Europe there is at least one outstanding exception: Germany. The quantity and quality of works relating to the penal fine in this country are vast. They cover the entire codification period to the present while often taking a historical perspective. This intense attention devoted to the fine was well known in countries profoundly influenced by Germany, such as neighboring German-speaking countries, Austria and Switzerland, as well as in other European countries that experienced waves of German legal influence in their academic history, such as Spain and Italy, and to a lesser extent, Portugal and the Scandinavian countries. In all these countries there has been a lively academic debate and numerous works devoted to the fine. There are interesting contributions in languages other than English that have been completely ignored by the Anglophone academic world: for example, Padovani’s brilliant essay on the alternatives to imprisonment (L’utopia punitiva. Milan: Giuffrè, 1981) or Roldán Barbero’s insightful work on money as a means of punishment (El dinero, objeto fundamental de la sanción penal. Madrid: Akal, 1983).
In the Anglophone academic world, apart from Simmel’s contribution in The Philosophy of Money (Simmel, 1907 ), here are only a handful of significant attempts to understand money sanctions in terms of socio-legal theory: Rusche and Kirchheimer’s (1939) brief discussion before the Second World War; Anthony Bottoms’s (1983) equally brief chapter in the early 1980s book The Power to Punish; and Peter Young’s (1989) work on the meanings of money as a punishment. These stand out almost in splendid isolation. More recently, the only attempt to theorize fines from a sociological viewpoint was O’Malley (2009), which provides extensive consideration and illustration of the development and implications of monetized justice within consumer societies, offering a nuanced comparative analysis of the development of fines and damages in Britain, North America, as well as Australia and New Zealand. A short genealogy of the penal fine from a legal perspective and historical statistical data about its use in western Europe is offered by Faraldo-Cabana (2017).
If we center our attention on confiscation, the picture does not change much. Again, there is a vast amount of literature on this topic, mostly centered on issues such as the standard of proof, the conditions of commencing the confiscation process, or the determination of the available and recoverable amount. Much has also been discussed about civil recovery as an alternative to criminal law (Rui, 2015) and about the reforms needed to improve mutual assistance in restraint and confiscation cases (Vettori, 2006), and much more about the particular characteristics of national procedures (in Austria, Schmidthuber, 2016; in Germany, Park, 1997, and Arnold, 2015; in Italy, Fornari, 1997, and Balsamo, 2010; in Spain, Aguado-Correa, 2000, and Cerezo-Domínguez, 2004; in Switzerland, Mégevand, 2013; in the United Kingdom, Alldridge, 2003, and Smith, Owen & Bodnar, 2015). But what little has been written (and mostly in languages other than English) about the 2,000-year-old historical evolution of confiscation (Pino Abad, 1999; Maugeri, 2001; Schnieders, 2002; Arnold, 2015), the differences between confiscation and fines regarding the principle of personality of punishments (Masferrer Domingo, 2009), or the varied governmental meanings of confiscation as a political penalty in times of war and dictatorship and as the new “big idea” for controlling organized crime and corruption in the 21st century. And although it is widely assumed that financial motives are actively involved in organized crime and many other predicate offences—the reason why confiscation of proceeds is presumed to have a deterrent function—the role of illegal profits on crime causation and of their forfeiture in deterring criminal behavior are rarely addressed in academic and political debates (as correctly pointed out by Van Duyne, 2014).
In sum, there is a surprisingly sparse theoretical literature for such important penalties in criminal justice.
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(1.) The European Court of Human Rights of the Council of Europe has applied the Engel criteria to different national regulations of confiscation, determining that some non-criminal-based confiscation regimes cannot be regarded as a punishment, since the purpose of the measure is not punitive, while in other cases it is. See details in Rui & Sieber (2015, p. 258). The court does not consider confiscation of illegally obtained profits to be a punitive sanction as long as the measure only aims at the reestablishment of the financial situation before a crime. The Engel criteria were created in the plenary case of Engel and Others v. The Netherlands in 1976 to determine whether a measure should be regarded as a criminal measure, making the guarantees of the European Convention of Human Rights applicable. The conclusions for the European Convention of Human Rights are similar to the results for the Charter of Fundamental Rights of the European Union, based on the fact that standards of protection under the charter are generally interpreted in light of the jurisprudence of the European Court of Human Rights in a way that these standards are at least as high as the standards of the corresponding rights in the European Convention (Art. 52§ 3 1st phrase).
(2.) Leading academics in the campaign against short-term imprisonment from European countries—Austria, England, France, Germany, Italy, the Netherlands, Portugal, Scandinavia, Spain, and Switzerland—expressed their uneasiness about the drawbacks they perceived in custodial sentences, which they did not believe were outweighed by the prospective benefits that could be derived from imprisonment. This led to a series of international penitentiary congresses, the first one in London in 1872, the second one in Stockholm in 1878, and the third one in Rome in 1885, as well as the inaugural meeting of the International Union of Penal Law in Brussels in 1889, and the third meeting in Christiania (later Oslo) in 1891, in which short imprisonments were deplored and fines, especially when levied against the poor, were decried because of non-payment of fines leading to short sentences of imprisonment. The proposals mainly focussed on introducing or increasing the use of suspended sentences. Few could predict the increase in the use of fines that would occur throughout the 20th century. For the fine to get to that point it had to undergo a clean-up process of two of the most criticized characteristics derived from its monetary nature: the impersonality which allowed the fine to be paid by an innocent third party and the unequal impact on offenders caused by the unequal distribution of money between individuals in society (Faraldo-Cabana, 2014a, 2017).
(3.) This includes many eastern European countries. In the period immediately after the Soviet revolution there was a widespread negative attitude toward the fine. The fine was viewed with a great amount of suspicion by many Marxist scholars, following Marx’s extremely negative perspective on money (Marx, 1844 , pp. 325–326). Pashukanis (1978, pp. 166–172), for example, viewed the fine as a criminal measure typical of the capitalist system in which everything, even the criminal justice system, is profit-oriented. For him, the monetary transaction that is implicit in the fine expressed relations of power because the institution of monetary exchange is built on the asymmetrical economic relations specific to capitalism. This opinion, rather widespread at the time, explains the limited use of fines in the penal legislation of the new Russian Soviet Federated Socialist Republic and subsequently in most East European socialistic jurisdictions (Frankowski & Zielińska, 1983; Faraldo-Cabana, 2014b), at least until the disintegration of the Soviet Union in 1991.
(4.) As clarified in the Explanatory report to the Council of Europe’s Criminal Law Convention on Corruption (ETS nº 173), the basic idea is “that confiscation of the proceeds is one of the most effective methods in combating crime.”
(5.) The United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, adopted by General Assembly resolution of December 19, 1988 (henceforth Vienna Convention), emphasized the need of forfeiture of drug proceeds as well as the need to establish severe legal restrictions on money laundering. An international body was established to oversee the implementation of the principles of the Vienna Convention. This organization is the Financial Action Task Force (henceforth FATF), whose original purpose, to combat the laundering of proceeds of drug crime, was later extended to the laundering of proceeds of other serious offenses and to the fight against terrorist financing.
The Forty Recommendations of the FATF on Money Laundering required the parties, already in 1990, to enable their competent authorities to confiscate property laundered, proceeds from, instrumentalities used in or intended for use in the commission of any money laundering offense, or property of corresponding value. In addition to confiscation and criminal sanctions, countries were also invited to consider monetary and civil penalties, or proceedings (including civil proceedings) to void contracts entered by parties, where parties knew or should have known that as a result of the contract, the state would be prejudiced in its ability to recover financial claims (e.g., through confiscation or collection of fines and penalties).
(6.) The United Nations Convention against Transnational Organized Crime, adopted in 2000 (henceforth Palermo Convention), is the main international instrument in the fight against transnational organized crime. The convention considers deprivation of the financial basis of criminal organizations as a significant means toward the prevention and combat of transnational organized crime. Article 12 obliges each party to introduce measures providing for the seizure and confiscation of the proceeds directly or indirectly derived from criminal activity, or the value thereof, as well as the income and other economic benefits generated by the said proceeds. The same article invites each party to consider the possibility of introducing reversal of the burden of proof in confiscation proceedings.
The United Nations Convention against Corruption, adopted in 2005 (Merida Convention), was the first international instrument to entail a provision requesting state parties to consider taking measures to permit confiscation “without a criminal conviction, in cases in which the offender cannot be prosecuted by reason of death, flight or in other appropriate cases.”
(7.) Law 646/1982 allowed the application of financial measures (i.e., civil confiscation) as a preventive measure—confisca di prevenzione—for persons suspected of belonging to a criminal organization and deemed socially dangerous. The provisions allowed investigation not only of suspected criminals but also of their spouses, children, and cohabiters during the previous five years. This type of confiscation is imposed outside the criminal justice system, albeit not having a strict civil nature (Panzavolta & Flor, 2015, p. 113). Extended confiscation within criminal proceedings was introduced by law 356/1992. This form of confiscation applied to offenders convicted of crimes typically related to criminal organizations. In the case of conviction, confiscation of assets at offenders’ disposal was applied if they had not been able to prove their licit origin. Amendments to the framework were introduced in the following years.
(8.) The Council of Europe’s Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime (Strasbourg Convention) of 1990 obliged member states to establish systems of control in order to enhance the potential of identifying, freezing, and confiscating proceeds of crime. According to the Explanatory Report, the ultimate goal was “to deprive criminals of the instruments and fruits of their illegal activities”. In 1997 the need to introduce “appropriate measures for the seizure and deprivation of the proceeds of corruption” was stressed by the Committee of Ministers of the Council of Europe, with Resolution (97) 24 on the Twenty Guiding Principles for the Fight against Corruption. See also the Council Action Plan to Combat Organised Crime of April 28, 1997, that stated that “the major driving force behind organised crime is the pursuit of financial gain.” For this reason, in Political Guideline nº 11 “the European Council stresses the importance for each Member State of having well-developed and wide-ranging legislation in the field of confiscation of the proceeds from crime.”
(9.) The European Court of Human Rights initially took a clear stance on the matter, namely the position that the public interest accruing from the protection of society against particularly dangerous forms of criminality well justified some restrictions on due process protections. See, for example, Raimondo v. Italy, Judgment of February 22, 1994; Phillips v. UK, Judgment of July 5, 2001. It has evaluated whether some forms of extended confiscation based on rebuttable presumptions are compatible with the presumption of innocence and fair trial (Article 6) and the prohibition of retrospective criminalization (Article 7). Recently it has insisted on the need to find a fair balance between the protection of the property right (Article 1 of the First Protocol) and the requirements of the general interest. See Paulet v. UK, Judgment of May 13, 2014. However, the standards of the ECHR seem to be lower than those of some national constitutional courts, such as the German one (see Esser, 2015, p. 106).
(10.) Over 80% of federal forfeitures handled by the Department of Justice in the United States are obtained through administrative forfeiture, which is an in rem civil action. The reason is that most seizures, the majority of which constitute large amounts of cash, are not contested. Since no one steps forward to challenge the forfeiture, courts are not involved in the process. The reason why administrative forfeitures are not challenged is that if the person from whom the cash was seized is not arrested or later indicted it may be risky for that person to show an interest in large amounts of money of generally quite unexplained origin. In the other cases the evidence is so overwhelming that contesting the forfeiture would be pointless.