According to the Law, a forfeiture action regarding illegally acquired property can be filed against officials and other natural persons who are under investigation for corruption charges or for having committed other certain crimes, against their close relatives, heirs, all those with whom the individual or his/her close relatives live or lived in the same household and run or ran a joint business, as well as against other individuals that took over the ownership of the respective property at considerably below market price. At the same time the circle of close relatives, determined by the Law, is rather wide and includes, in particular, spouses, fiancés, minor and adult children, guardians and trustees, parents, siblings, grandparents, grandchildren, aunts and uncles, spouses’ parents and other individuals, including any adults that have lived in the same household for at least 180 days within the period under review and for a total period of at least one year.
The property of a value of over 50 million AMD (approximately 105 thousand USD or 7.7 million RUB), whose origin cannot be reasonably explained in relation to the lawful income, and the proceeds of this property are to be considered illegal.
The forfeiture of illegal property in favour of the State is implemented within the framework of civil proceedings based on the results of an independent verification. What is more, on the one hand, a criminal conviction of a natural person is not needed to file a forfeiture action; on the other hand, the termination of a criminal case does not imply the termination of forfeiture proceedings.
It is the General Prosecutor’s Office of the Republic of Armenia that is responsible for conducting the verification procedures and proving the illegal origin of property. The investigation is carried out if there are reasonable grounds to suspect that the property of illegal origin belongs to:
- a convicted person or his/her associate and was not confiscated in accordance with the conviction;
- a person accused of having committed a crime or his/her associate;
- a person who has ever been under investigation for a crime in the event that criminal proceedings cannot be initiated against him/her or his/her associate;
- a person against whom criminal proceedings were initiated but subsequently suspended on any legal basis;
- an official or his/her associate.
In the event that the evidence produced by the verification points to the illegal origin of a property, the General Prosecutor’s Office notifies accordingly the owner of the property and asks him/her to submit the declaration which includes the information about:
1) the property that belongs to the individual and the members of his/her family;
2) the obligations of the individual and the members of his/her family towards each other and third parties;
3) all bank accounts of the individual and the members of his/her family in the Republic of Armenia and abroad;
4) the income of the individual and the members of his/her family and its origin for the period under review;
5) the contracts for the alienation or acquisition of property of the individual or the members of his/her family concluded within the period under review;
6) other circumstances related to the subject of the investigation.
On the grounds of the gathered material the General Prosecutor’s Office issues its opinion about the outcome of the verification and decides whether to file a forfeiture action to the court against the illegally acquired property.
The defendant has the possibility to provide the evidence to support the legal origin of the property under civil proceedings. If such evidence is not provided or the court considers it insufficient, the property is found to be illegal and is seized in favour of the State.
According to the Law, the limitation period is 10 years. However, in some cases where there is tangible evidence of the illegal origin of certain assets, the limitation period is September 21, 1991 and the respective property is subject to the verification procedure and eventual forfeiture.
The legal mechanism for the forfeiture of illegal property, established in Armenia, is similar to the procedure of forfeiture in favour of the State of the property whose acquisition with a lawful income is not proved by the procedure of verification of expenditure, which is also undertaken under civil proceedings in accordance with the Federal Law of the Russian Federation of December 3, 2012 No. 230-FZ “On the Control over the Matching of Expenditure of the Persons Holding Public Positions and of Other Persons against Their Income”.
It should be highlighted that similar legislation is becoming increasingly prevalent in the post-Soviet area. For instance, the possibility to forfeit in favour of the State the property which cannot be reasonably explained in relation to a lawful income on the basis of the outcome of the procedure of control over expenses was provided for by the Law “On the Declaration of Income, Expenditures, Assets and Liabilities of Public Officials and Deputies” adopted in Abkhazia this year, meanwhile the mechanism for the non-conviction based forfeiture of illegal assets of public officials was established in Ukraine at the end of last year.