In many cases, the state does not know how to deal with property that has been seized, forfeited, or encumbered in criminal or tax proceedings. An investigation by the Supreme Audit Office (SAO) found that property was sometimes not valued. In contrast, other times, it was unrealistically appreciated, and even though it was rapidly losing value in many cases, it was not sold.
This reduced the revenue that goes into the particular account of the Ministry of Justice, which is used to pay victims’ property claims.
The SAO looked at how the state disposed of electrical appliances and motor vehicles between 2015 and 2020, which are items that lose value quickly and where it is desirable to sell them as soon as possible.
“The auditors found that, for example, the Office for State Representation in Property Matters (OSPM) did not offer for sale 57 percent of the passenger cars in the audit sample of 180 seized cars. The average storage period was 522 days. And it did not offer even 93 percent of the control sample of 110 seized electrical equipment for sale,” the SAO stated.
In addition, two-thirds of the cars inspected were not maintained by the ministry, which led to a decline in their value. The General Directorate of Customs (DGC) supported only 11 out of 68 vehicles. Only six were ready for auction.
We are cutting costs and opposing the Office of the Ministry of the Interior
In response to the investigation, the Office of the Ministry of Customs said it was trying to minimize the costs of managing its assets. On the criticism of the lack of maintenance, it said its staff carried it out to save money.
“Thus, not only has no damage been caused, but there have been savings in state budget expenditure,” said ÚZSVM spokeswoman Alena Mühl. Partial deficiencies pointed out by the SAO have been eliminated.
Billion-dollar assets
The SAO also raised concerns about the registration and valuation of the property. The office estimated the value of the seized property to be at least CZK 3.5 billion, while the forfeited and seized property was estimated at another CZK 2.92 billion. However, the law does not impose an obligation to value property, so the state has only a limited overview.
“According to the published reports of the National Headquarters against Organised Crime for 2017, 2018, and 2020, all the departments of the Police of the Czech Republic seized property worth CZK 6.24 billion on average per year between 2016 and 2020,” the SAO said, noting that the Centre for Seized Assets of the Ministry of the Interior did not record the value of the property when it was taken into administration. For a change, the Office of Asset Management reported that over 90 percent of the secured assets had zero value.
The administration of seized, forfeited, or confiscated assets cost the state CZK 320 million.
The audited entities were the Ministry of the Interior, the Ministry of Justice, the General Financial Directorate, the General Directorate of Customs, the Office for State Representation in Property Matters, the Regional Court in Ostrava, and the Regional Police Directorate of the South Moravian Region.