Asset freezing and confiscation: how governments secure assets held by companies

Government authorities across the EU can freeze property during a criminal investigation, and in some cases take it permanently. Recent EU rules go further still: property can be confiscated even without a conviction, and in some cases without a specific crime being proven. Freezing and confiscation are the two mechanisms behind this. This guide explains what they are, how they work, and what authorities may and may not do.

What is the difference between freezing and confiscation?

They are connected, but they are not the same thing.

Freezing is temporary. An authority secures property while an investigation or case is ongoing, so that it cannot be moved, sold, or spent. Freezing does not change who owns the property, and if it is lifted, the property is released.

Confiscation is permanent. Here a court orders that the property is taken from its owner and passes to the state. It can take the form of confiscating the specific property, or of ordering the owner to pay a sum equal to its value.

In short: freezing secures, confiscation takes. Freezing can lead to confiscation, but it does not have to.

Who can freeze property, and on what basis?

Freezing is used to secure property that may later be confiscated, returned to a victim, or used as evidence. A competent authority, typically a prosecutor or a court, can order it, and in urgent cases property can be frozen quickly to stop it disappearing before a formal order is in place.

What can be frozen is broad. It covers property of any kind, whether physical or not, including money in a bank account and crypto-assets.

The rules come from EU law and national law together. Directive (EU) 2024/1260 sets minimum rules on freezing and confiscation that member states must put into national law by 23 November 2026. Because it is a directive, it sets the common framework, but the exact powers and procedures a company actually meets are set by each country's own law.

How does confiscation work?

Confiscation is ordered by a court, not by the police or a prosecutor alone. It comes in several forms.

The most familiar is confiscation after a conviction: when someone is convicted of a crime, the proceeds and the instruments of that crime can be confiscated, and where those cannot be reached, a sum of equal value instead.

Beyond that, a court can confiscate a convicted person's other property where it is satisfied that the property comes from criminal conduct more generally. Property can also be confiscated from someone else it was passed to, if that person knew, or should have known, that it was transferred to them in order to avoid confiscation.

And two forms go further still, reaching property without any conviction at all. They come next.

Can property be confiscated without a conviction?

Yes, and this is where the rules have expanded most. There are two situations.

The first is where a criminal case has been started but cannot be completed, for example because the suspect has died, fled, or fallen ill. The property can still be confiscated even though no conviction follows.

The second goes furthest: confiscation of unexplained wealth. Here property can be confiscated where a court is satisfied that it comes from criminal conduct, without a specific crime having to be proven. The burden of proof is lower than the one needed to convict someone, but it is still a court that decides, and the person affected can challenge it. In the EU rules this is aimed at property linked to serious and organised crime, though member states are free to apply it more widely.

These possibilities are being introduced through Directive (EU) 2024/1260, which member states must bring into national law by 23 November 2026. Some countries, such as Sweden, have already gone further than the minimum.

What may authorities not do?

Authorities' powers are wide, but they are not unlimited.

Confiscation is a decision for a court, not something an authority can impose on its own. The person affected has the right to be heard and to a fair trial, and can challenge the order in court, including the evidence said to show the property comes from crime.

Freezing and confiscation also have to be proportionate. Where confiscation would cause undue hardship in an individual case, national law can allow a court not to order it.

And people who are not involved are protected. If property was passed to a third party, it can only be taken from them if they knew, or should have known, that the transfer was meant to shield it. Someone who received property in good faith keeps it.

What should companies keep in mind?

For many companies this matters more than they expect, because they hold value for others: money, assets, property. If a customer is investigated, assets the company holds can be frozen or confiscated, and the company can find itself in the middle of a case without being suspected of anything itself.

The most important thing is to understand your role. An order to freeze or hand over property does not mean the company is accused of anything. But it has to be handled correctly: check that the order is genuine and has a legal basis, act on what it actually covers, and keep a record of what was done. Because a good-faith holder is protected, being able to show that the company acted properly matters.

Orders can also arrive from another EU country. A freezing or confiscation order issued in one member state can be recognised and enforced in another, so a company may receive one that originated abroad but reaches it through its own national authority.

Good handling matters here. Handled over email and scattered documents, this is hard to keep track of and hard to prove afterwards. Clear, traceable handling protects both the company and its customers.

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Reqport replaces manual, unverified workflows for handling authority requests and orders with a purpose-built portal. Each one is verified, structured into a trackable case, and recorded with a full audit trail, so a company can show exactly what it did, when, and on what basis. See how Reqport works.

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This article is for informational purposes only and does not constitute legal advice. Many of the obligations described are implemented through national law, which varies by member state. For how they apply to your specific situation, consult qualified legal counsel.

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Reqport is a platform for handling law enforcement and other authority data requests.

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