In the 1990s a number of criminal proceedings were started against Mr Ciro Giordano, a businessman trading in fur and living in Naples until his death in 2017, as he was suspected of belonging to a mafia-type organisation operating in the Campania region between 1988 and 1995; none of these proceedings led to a conviction. He was considered to be “the bank of the Camorra clans” because he was an expert in money laundering; his nickname was “Ciruzzo, a varchetella”, meaning “little Ciro, the boat of money”.
In 2001, preventive measures were taken against him under the Italian law against mafia type organizations and he tried to hide his assets in Switzerland, where he opened two accounts in which he deposited a total of 13,800,000 Euros, using the names of his daughters as fictitious holders.
On 19 April 2001 the Italian Court of Santa Maria Capua Vetere submitted a request for judicial assistance to Switzerland for the application of preventive measures against Mr. Giordano, as a person suspected of belonging to mafia-type associations (see Articles 1 and 2 of Law no. 575/1965, now D.lsg 159/2011). By decision of 31 May 2001, the Prosecutor of Cantone Ticino ordered the seizure of the two bank accounts. These measures were confirmed by the Chamber of Criminal Appeals of the Court of Appeal of the Canton Ticino.
On 30 October 2001 the Court of Santa Maria Capua Vetere confiscated several assets from Mr. Giordano, including the bank accounts mentioned above. The decree of non-conviction based confiscation was confirmed on 26 May 2005 by the Court of Appeal of Naples, and became irrevocable on 23 January 2007, after the final decision of the Court of Cassation n. 5248/2007.
With the definitive decision of 17 August 2010, the executing authority in Switzerland (MPC) accepted the Italian request for judicial assistance, ordering the transmission to the Court of Santa Maria Capua Vetere of the values deposited with the bank, and reserved the option to retain a percentage of the value according to the treaty on the distribution of the confiscated assets.
On 17 September 2010 the two daughters of Mr. Giordano, as formal owners of the accounts, interposed appeal against the decision, complaining the fact that judicial assistance was provided in a case in which there wasn’t the application of the criminal matter, as swiss law apparently required. According to the appeal, in this case the assistance was therefore based on a preventive measure, that is a prerogative by Italian system and is not a typical Swiss law tool. The II Court of Criminal Complaints rejected the appeal.
The Federal Court (Tribunal Pénal fédéral) declared inadmissible the appeal against the sentence of the II Court of criminal complaints (sentence 1C_563 / 2010 of 22 December 2010) and explained the possibility of applying judicial cooperation also with regard to prevention measures.
Clarifying issues:
In the Italian legal system there is a difference between criminal penalties and preventive measures: a criminal penalty relates to an offence already committed (guilty judgment), whereas a preventive measure is intended to reduce the risk of future offences (social danger judgment).
In Italy, both types on confiscation can be ordered in proceedings before the judge, according to the principles of the due process of law, but non-conviction-based confiscation requires a standard of proof that is lower than the standard required to obtain a conviction in a criminal court.
In this case, the confiscation decree – as non-conviction based preventive measure – was issued in order to apply special tools against mafia-type organizations introduced by Act no. 646 of 13 September 1982 ("the Pio La Torre Act" – the name of the Italian Member of Parliament murdered due to his anti-mafia activity). This law introduced the seizure and the confiscation of property at the direct or indirect disposal of the person against whom the preventive proceedings have been started, due to the “criminal lifestyle” of the defendant. The confiscation could be ordered when there is sufficient circumstantial evidence, such as a considerable discrepancy between their lifestyle and their apparent or declared income, to show that the property originates from unlawful activities or their reinvestment.
Legal basis of confiscation: Italian Law (Act no. 1423 of 27 December 1956; Act no. 575 of 31 May 1965; Act no. 646 of 13 September 1982)
ItalySwitzerlandOn 19 April 2001 the Italian Court of Santa Maria Capua Vetere submitted a request for judicial assistance to Switzerland for the application of preventive measures against Mr. Giordano, as a person suspected of belonging to mafia-type associations (see Articles 1 and 2 of Law no. 575/1965, now D.lsg 159/2011).
By decision of 31 May 2001, the public Ministry of Cantone Ticino ordered the seizure of the two bank accounts. These measures were confirmed by the Chamber of Criminal Appeals of the Court of Appeal of the Canton Ticino.
On 30 October 2001 the Court of Santa Maria Capua Vetere confiscated several assets from Mr. Giordano, including the bank accounts mentioned above.
The decree of non-conviction based confiscation was confirmed on 26 May 2005 by the Court of Appeal of Naples, and became irrevocable on 23 January 2007, after the final decision of the Court of Cassation n. 5248/2007, Judge Piercamillo Davigo as relator.
With the definitive decision of 17 August 2010 the executing authority in Switzerland (MPC) accepted the Italian request for judicial assistance, ordering the transmission to the Court of Santa Maria Capua Vetere of the values deposited with the bank, and reserved the option to retain a percentage of the value according to the treaty on the distribution of the confiscated assets. On 17 September 2010 the two daughters of Mr. Giordano, as formal owners of the accounts, interposed appeal against the decision, complaining the fact that was realized a judicial assistance in a case in which there wasn’t the application of the criminal matter, as swiss law apparently required. According to the appeal, in this case the assistance was therefore based on a preventive measure, that is a prerogative by Italian system and is not a typical Swiss law tool. The II Court of Criminal Complaints rejected the appeal.
The Federal Court (Tribunal penal federal) declared inadmissible the appeal against the sentence of the II Court of criminal complaints (sentence 1C_563 / 2010 of 22 December 2010) and explained the possibility of applying judicial cooperation also with regard to prevention measures.
In the Italian legal system there is a difference between criminal penalties and preventive measures: the former constitutes the response to an unlawful act and the consequences of that act as established in a penal proceeding; the latter are means of preventing the commission of such acts. Basically: a criminal penalty relates to an offence already committed (guilty judgment), whereas a preventive measure is intended to reduce the risk of future offences (social danger judgment).
Both types of confiscations are ordered in proceedings before the judge, according to the principles of the due process of law, but non-conviction-based confiscation requires a standard of proof that is lower than the standard required to obtain a conviction in a criminal court.
In this case, the confiscation decree – as non-conviction based preventive measure – was issued in order to apply special tools against mafia-type organizations introduced by Act no. 646 of 13 September 1982 ("the Pio La Torre Act" – the name of the Italian Member of Parliament murdered due to his anti-mafia activity). This law introduced the seizure and the confiscation of property at the direct or indirect disposal of the person against whom the preventive proceedings have been started, due of the “criminal lifestyle” of the defendant. The confiscation could be ordered when there is sufficient circumstantial evidence, such as a considerable discrepancy between their lifestyle and their apparent or declared income, to show that the property come from unlawful activities or their reinvestment.
The Federal Court (Tribunal penal federal of Switzerland) declared inadmissible the appeal presented by the two daughters of Mr. Giordano as formal owners of the accounts and explained the possibility of applying judicial cooperation also with regard to prevention measures, even if they are not part of the national law. According to the Swiss Federal Court, the Italian non-conviction-based procedures would present a sufficient degree of affinity with the confiscation procedures recognized by Swiss law, since it presupposes both the creation of a crime (without requiring a specific assignment of criminal responsibility to the person concerned) and a link between the crime and the object of the confiscation. So, this kind of measure can therefore be assimilated to a "criminal case" for the purpose of the granting by the Swiss authorities of the request for judicial assistance.
This proceeding is an appeal against the sentence of the II Court of criminal complaints (sentence 1C_563 / 2010 of December 22, 2010).
The Federal Court (Tribunal penal federal) declared inadmissible the appeal against the sentence of the II Court of criminal complaints (sentence 1C_563 / 2010 of 22 December 2010) and explained the possibility of applying judicial cooperation also with regard to prevention measures, because the Italian non-conviction-based procedures would present a sufficient degree of affinity with the confiscation procedures recognized by Swiss law, for these reasons:
a) the Federal Court took into account the particular conceptions of Anglo-Saxon law by ratifying the CRIC Convention. In their explanatory report, the experts explain that they considered the different types of procedures followed by civil law and common law systems for taking confiscation decisions, in particular the procedures independent of a prosecution and the procedures in rem.
b) The Tribunal Federal underlines that an effective instrument of cooperation must be taken into account of these differences between the various internal laws and recognize them.
c) The Italian prevention measures are similar to the crime based Swiss confiscation because:
On 19 April 2001 the Italian Court of Santa Maria Capua Vetere has submitted a request for judicial assistance to Switzerland for the application of preventive measures against Mr. Ciro Giordano, person suspected of belonging to mafia-type association (see Article 1 and 2 of the Law n. 575/1965 today D.lsg 159/2011). The Court issued a reasoned decision, ordering the seizure of property at the direct or indirect disposal of Mr. Ciro Giordano, against whom the proceedings showed sufficient circumstantial evidences that the property concerned forms the proceeds from unlawful activities or their reinvestment. In particular the Court revealed a considerable discrepancy between his lifestyle and his apparent or declared income, as fur businessman. This fact, connected to the evidence of his constant contacts with members of Camorra clans was enough to sustain the belonging to mafiatype association.
For these reasons, the Court ordered the confiscation of any of the goods seized in respect of which it has not been shown that they were lawfully acquired.
2nd instance:
Mr. Ciro Giordano appealed to the Court of Cassation, complaining about:
- The leak of motivation;
- The wrong application of the international treaty with Swizerland
The Court of Cassation confirmed the decree of non-conviction on 23 January 2007.
The Italian Court sent the request of juridical assistance to Switzerland.
3rd instance:
With the definitive decision of 17 August 2010 the executing authority in Switzerland (MPC) has accepted the Italian request for juridical assistance, ordering the transmission to the Court of Santa Maria Capua Vetere of the values deposited on the bank.
On 17 September 2010 the two daughters of Mr. Giordano, as formal owners of the accounts, interposed appeal against the decision, complaining the fact that was realized a judicial assistance in a case in which there wasn’t the application of the criminal matter, as swiss law apparently required. According to the appeal, in this case the assistance was therefore based on a preventive measure, that is a prerogative by Italian system and is not a typical Swiss law tool. The II Court of Criminal Complaints rejected the appeal.
The Federal Court (Tribunal penal federal) declared inadmissible the appeal against the sentence of the II Court of criminal complaints (sentence 1C_563 / 2010 of December 22, 2010) and explained the possibility of applying judicial cooperation also with regard to prevention measures.
The Federal Court (Tribunal penal federal of Switzerland) declared inadmissible the appeal presented by the two daughters of Mr. Giordano, as formal owners of the accounts and explained the possibility of applying judicial cooperation also with regard to prevention measures, even if they are not part of the national law.
According to the Swiss Federal Court, the Italian non-conviction based procedures would present a sufficient degree of affinity with the confiscation procedures recognized by Swiss law, since it presupposes both the creation of a crime (without requiring a specific assignment of criminal responsibility to the person concerned) and a link between the crime and the object of the confiscation. It can therefore be assimilated to a "criminal case" for the purpose of the granting by the Swiss authorities of the request for judicial assistance.
Act no. 1423 of 27 December 1956 and Act no. 575 of 31 May 1965, as amended by Act no. 646 of 13 September 1982 (now Act. 159/2011 Antimafia Code) and art. 416 bis, 644, 648 Penal Code.
Suspected of belonging to a mafia-type organisation operating in the Campania Region (clan Casalesi- Alleanza di Secondigliano) by Court of Santa Maria Capua Vetere
Tribunal pénal fédéral
The case of Ciro Giordano clearly shows the legal reasoning that can be applied to realize the mutual recognition of different models of confiscation, even non-conviction based confiscations.
According to the FATF Recommendations 2017 confiscation of assets or property is the permanent deprivation of property by order of a court or administrative procedures, which transfers the ownership of assets derived from criminal activity to the State.
The proceeding without a conviction are called in different way: “action in rem”, “prevention measures”, “precautionary measures” and “civil forfeiture”.
In the legal systems where these are applied (Italy, UK, Ireland Scotland, Australia, USA) they are ordered in legal proceedings in which law enforcement officers or Courts take assets from persons suspected of involvement with crime or illegal activities without necessarily charging the owners with wrongdoing.
The mutual recognition of different types of confiscation can be challenging, hence this case – involving a request for mutual legal assistance between Italy and Switzerland - represents an accurate guide to subsume the preventive confiscations (action in rem) under the criminal model, and let the mutual recognition be effective.
The reasoning presented in this case allows for a greater application of confiscations and strengthens the applicability of these tools to combat international crime. The national and international regulatory sources regulating the subject of judicial assistance in criminal matters between Switzerland and Italy are:
- European Convention on Mutual Assistance in Criminal Matters of 20 April 1959,
- Italian-Swiss Agreement of 10 September 1998 (CEAG);
- Articles. 48 and ss. of the Convention implementing the Schengen Agreement of 14 June 1985 (CAS);
- Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime of 8 November 1990 – (CRIC).
These rules are similar to the procedures of Art. 12 and 13 of the United Nations Convention against Transnational Organized Crime and the Protocols Thereto (UNTOC). Article 12 UNTOC states that States parties may consider the possibility of requiring that an offender demonstrates the lawful origin of alleged proceeds of crime or other property, to the extent that such a requirement is consistent with the principles of their domestic law and with the nature of the judicial or with other proceedings. The link to “other proceedings” could be referred also to “action in rem”, “prevention measures”, “precautionary measures” and “civil forfeiture”
In this view, the Swiss Court’s reasoning can also be used to extend the application of Articles 12 and 13 of the Palermo Convention even in non-conviction based cases in order to increase international cooperation for purposes of confiscation.
Article 54 of the UN Convention against Corruption (UNCAC) encourages States to consider taking the measures necessary to allow confiscation without a criminal conviction in cases in which the offender cannot be prosecuted by reason of death, flight or absence or in other appropriate cases. The two Conventions should be applied following the same guide lines.
Finally, this case is also an important example of mutual legal assistance (MLA), as also foreseen by UNTOC Article 18 of the UN Organized Crime Convention, in order to realize the harmonization of legal procedures to identify or trace proceeds of crime, property or instrumentalities for evidentiary reasons and their seizure for the purpose of confiscation.
By using the reasoning of this case, it is possible to increase the number of confiscations when different States are involved, and that’s extremely relevant, because the confiscation of assets is a way to undermine the fiscal/financial structure and even survival of an organized criminal group.