The National Fiscal Management Agency (ANAF) is the last and most important resort in recovering the fiscal prejudice national courts have ascertained. The amount that the Fiscal Authority manages to collect, though, is unsubstantial. Until 2012, not even 5% of the fiscal prejudice had been recovered. Later, some progress has been made, but not nearly enough. All of this while the opinion of most legal professionals is that recovering assets or money resulting from illicit deeds is as least as important as executing sentences. The reason for that is not only it increases the state’s revenues and covers the costs of penal lawsuits, but, first and foremost, that it discourages infringement of the law. If it will continue to prove profitable, economic criminality will flourish.
A harmful idea has already infected the collective consciousness: ‘it’s worth stealing a million for a little time in jail.’ As long as recovery of the fiscal prejudice is not aggressive, the prosecutors’ actions and the courts’ decisions get only half of the work done. The main question is: why doesn’t recovery of the prejudice work? The fiscal authority justifies its poor results by blaming procedures. ANAF thinks that the major problem is the fact that, in general, those sentenced are already in prison, so that procedures are long and difficult. Is it, after all, a management problem or is it a lack of institutional will? Laura Stefan, an anti-corruption expert for EFOR, says that the Fiscal Authority is hiding behind a few administrative minutes: ‘executing court decisions is slow because ANAF has not issued clear procedures. It’s a very serious problem if a judge issues confiscation orders and ANAF does not follow through. It’s true there has been some progress, but it’s not that impressive. For example, if a building must be seized and its owner is imprisoned, ANAF will say there is no one who can give the building away.’
Discontent with recovering fiscal prejudice has been voiced by ministries of justice, civil society, prosecutors and the chief of the Anti-Corruption National Division (DNA), Laura Codruţa Kovesi. Recently, she said that she does not know why ANAF is so inefficient and that the responsibility lies solely with the ministry of finance, apart from those cases in which there is proof of corruption and penal investigations can be initiated. ‘I think it is a problem that can be solved through internal policies and through a consistent observation of these principles,’ Kovesi explained.
The devil is in the details
In the last years, both difficulties and solutions to recovering fiscal prejudice have been discussed. Attorney Emil Bivolaru thinks that the most important aspect is the deployment of an inter-institutional system that monitors assets and sums of money which are taxed by the state, in order that the system’s general status and deficiencies are quickly noticed. His opinion is that the lack of an efficient interaction between the institutions involved in the execution of fiscal prejudice recovery is making the process so difficult.
Indeed, it has been acknowledged over time that the confiscation of assets is a problem, because, in most cases, prosecutors who must make a decision do not succeed in identifying the real estate or bank accounts they must confiscate, meaning they cannot conduct a swift fiscal enquiry. The experts conclude that the penal and fiscal enquiries must be concurrent, that precautionary measures must be taken at the beginning of the penal enquiry and maintained throughout, while court decisions must identify all confiscated assets. ANAF should, in their turn, view recovery measures as a priority. Otherwise, financial crime will remain a very profitable way of getting rich.
‘The only way of fighting corruption are extended confiscation measures, criminals must be dispossessed of their illicit gains if crime is not to pay,’ says Cristina Guseth, manager of Freedom House Foundation, making the observation that the problem lies with the recovery process in itself. Laura Ştefan is of the opinion that ANAF should respect court decisions and find the adequate administrative tools to operate with because, otherwise, we could be talking about a breach of the separation of powers principle: the executive, which is a political actor who makes decisions, does not respect court decisions which it should implement through the fiscal authority. According to the numbers of recovered fiscal prejudice which ANAF has provided exclusively to the Capital, the process of recovery is not only inefficient, but also yields different data from DNA’s last report, which states that a ten times bigger prejudice has been ascertained by penal courts.
In the same report, DNA shows that the main challenge will be that ‘institutions whose job is recovering confiscated assets or equivalent compensations for the national or EU’s budget execute the courts’ decisions.’ This objective is feasible as long as recovering money is vital for the efficiency of the battle against corruption. And this presents a lot of different aspects. According to DNA, corruption generally occurs in the cases of illegal awarding of contracts from public funds, of naming people in public office, of proceedings regarding the change of laws, of undervaluation of assets in commercial operations, of illegal refunds, of fixed auctions, of preferential payments to some companies and the likes.
How and by whom is the fiscal prejudice recovered?
- The policeman or the financial expert identifies the assets of the persons under penal enquiry.
- The prosecutor issues precautionary measures and seizes identified assets.
- The prosecutor forwards the case to the court.
- The judge decides to confiscate the assets and to continue the precautionary seizure.
- ANAF executes the court’s decision.
The duty of confiscation lies with the Ministry of Finance.
Attorney Emil Bivolaru, partner NNDKS, explains what the Ministry of Finance has to do in order to execute special or extended confiscation measures:
Assets that have been confiscated by a court’s decision are declared and forfeited to the due authorities by their owners. The authorities have the obligation to inventory and preserve them until they actually come into possession.
The authorities come into possession of the assets in 10 days, after which a committee evaluates them in the next 21 days.
The capitalization of the assets is done through stock markets, own commercial channels, a public auction or directly on site.
Regarding the sums of money that have not been registered with banks, the judge designed to execute the sentence will forward a copy of the decision to the fiscal authorities which will enact confiscation.
On the basis of the judge’s decision, the fiscal authority will proceed with the foreclosure. The first step will be to verify and inventory all assets. Before capitalization, they will be evaluated by independent or state experts.
Foreclosure will begin once the notice is issued. If the debt is not covered in 15 days since the issue of the notice, foreclosure measures will continue.