Labour’s Stephen Hughes MEP has supported a call for new court orders which could be used to freeze a fraudster’s assets across all 27 European Union countries.
At present someone who has been a victim of fraud and who is seeking the disclosure, or the freezing, of the perpetrator’s assets, will have to seek separate court orders in any country in which they suspect money may be hidden.
The complexity of accessing up to 27 different judicial systems means that in many cases money is moved from one jurisdiction to another, before eventually being moved offshore where it cannot be accessed by any legal authorities.
Stephen Hughes says that a pan-European order is necessary to make it easier for people who have been conned out of their savings to get their money back: “A typical example, which is often raised with me by my constituents, is that of a disreputable builder who persuades people to hand over significant sums of money for a new home but then disappears. By the time it is clear what has happened the money invested could have been moved out of the country. The time and expense needed to trace these funds means that in many cases the money is lost before any action is taken.
“The current legal setup protects the fraudster, leaving the victim lost in a quagmire of paperwork and expensive legal action.
“These proposals would reverse this unfair situation, giving the victim a better chance of getting their money back.”
MEPs voted overwhelmingly in favour of a detailed demand for action backing the idea of pan-EU disclosure and asset freezing orders.
Stephen Hughes added: "The European Commission is expected to come forward with proposals on the freezing of assets later this year and the Labour MEPs will continue to campaign to ensure that EU action will help the victims of these fraud cases.
“Today we’ve put forward realistic proposals that could make a massive difference for people from the North East and throughout the EU who have been cheated out of their hard earned cash. With the safeguards in place that we have proposed, the Commission must now act to redress the balance and give more power to these victims of crime.”
As well as helping victims of fraud get their money back, the rules would also benefit businesses chasing non-payment. This is particularly important for small businesses that often don't have the substantial funds needed to chase non-payment by clients in other EU countries.
The report includes a number of proposals for safeguards that need to be put in place to ensure that the orders are not abused. These include a requirement for applicants to put down a deposit to protect against the possibility of vexatious or malicious claims.