Confiscation under Section 20 AWG

By Dr. Julius Hagen, Attorney at Law

Which assets can be confiscated

Section 20 AWG allows, subject to specified conditions, confiscation of property connected with a criminal offence under section 17 or section 18 AWG or a regulatory offence under section 19 AWG. It also covers property used or intended to commit or prepare the offence. Examples include exported goods, technical equipment and vehicles. Confiscation of the proceeds is governed by the general confiscation provisions.

We examine which property the authorities seek to take from you or the company and the legal basis they rely on. The order also shows whether the assets are being preserved provisionally or final confiscation has been ordered. Both require examination of the connection with the offence and the conditions for taking property from the person concerned.

The connection with the alleged offence

Goods in a prohibited export may be treated as objects of the offence. A vehicle or piece of equipment may be an instrumentality if it was used to commit or prepare the offence. For each item, we establish its role in the transaction and whether that is sufficient for confiscation.

Where several shipments are involved, we examine which of them the measure covers and how the authorities justify its scope. Purchase, leasing and transport contracts, together with payment records, also help establish ownership and rights of use.

Property belonging to someone else

Section 20(2) AWG refers to section 74a of the German Criminal Code (StGB) and section 23 of the Regulatory Offences Act (OWiG). These provisions permit confiscation of third-party property subject to additional conditions. One example is where an owner contributed, at least through gross negligence, to the property's use as an object or instrumentality of the offence. Acquisition in the circumstances specified by those provisions may also be covered. Ownership or knowing the suspect is insufficient on its own.

Limits on confiscation

Confiscation under section 20 AWG is discretionary and must be proportionate. We therefore also assess the property's value, the seriousness of the allegation and possible less intrusive measures. If a vehicle or machine is needed to keep the business running, its function and the consequences of losing it should be documented. Financial harm alone does not, however, rule out confiscation.

Calculating the proceeds of an offence

Confiscation of proceeds and their value in criminal cases is governed by sections 73 onwards of the German Criminal Code (StGB). It may cover the revenue received and therefore exceed the profit. Section 73d StGB determines, in particular, which expenses may be deducted. The calculation must start with the value actually obtained through or for the offence.

We trace payments to establish who received the proceeds. Where the money went to a company, the conditions for confiscation from that company need examination. Spending the money later, or arguing that the transaction could have been authorised, does not automatically defeat the confiscation claim.

A monetary equivalent for objects or instrumentalities is governed by different conditions from value-based confiscation of proceeds. Where a corporate fine is imposed, statutory limits on additional confiscation of proceeds for the same act must also be observed.

Challenging an asset restraint order

The authorities may secure assets for later confiscation while an investigation is still ongoing. Section 111b of the German Code of Criminal Procedure (StPO) permits seizure of specific property. An asset restraint order under section 111e StPO secures the later confiscation of a monetary equivalent. Neither measure is a final decision on confiscation.

We examine whether the conditions for restraint are met, how far it may extend and which remedy is available. Ownership documents, account movements and the allocation of individual claims may be important. The interests of the suspect, the company and other owners each need consideration. A separate EU sanctions freeze may remain in force even if the criminal asset restraint is lifted.