Article 127 Spanish Criminal Code: Confiscation of Proceeds and Instrumentalities

Article 127 of the Spanish Criminal Code provides that every penalty imposed for an intentional offence carries with it the loss of the effects deriving from the offence, of the property, means or instruments with which it was prepared or executed, and of the gains derived from it, whatever transformations they may have undergone. Where confiscation of those specific assets is impossible, the court confiscates other property of equivalent value. For a client with property, vehicles or accounts in Spain, this article frequently determines the real consequence of the case, and it operates from the investigation stage through the freezing of assets.

Wording of Article 127 of the Spanish Criminal Code

Elements of the offence

1. A conviction for an intentional offence, or for a negligent offence punishable by more than one year in the discretionary case.
2. A connection between the asset and the offence: it must be an effect of the offence, an instrument used to prepare or execute it, or a gain derived from it.
3. For gains, the identification of the benefit obtained, including assets into which it has been transformed, which requires a documented trace and not an estimate.
4. For confiscation by value, the impossibility of reaching the original assets and a determination of the economic value to be substituted.

Defence strategy

Breaking the connection with the offence. The asset must be an effect, an instrument or a gain. A vehicle used incidentally, a property acquired before the period under investigation, funds whose origin is documented and an account used both for the business and for the conduct alleged are not confiscable in whole. The defence produces the acquisition history of each asset, because confiscation orders are habitually drafted by reference to everything found rather than to what is connected.

Third parties and the family home. Confiscation cannot prejudice a third party acting in good faith. A spouse with a matrimonial interest, a co-owner, a mortgage lender and a purchaser who acquired for value are all entitled to be heard. Where the family home is affected, the defence intervenes on behalf of those interests from the moment of the freezing order, since a charge registered against a property is far harder to remove after judgment than to resist before it.

Quantifying the gain. The gain is the benefit obtained, not the turnover of the activity nor the value of the goods seized. Deducting the sums that were never received, the amounts already returned to the injured parties and the sums attributable to lawful activity is legitimate and materially reduces the figure. Where confiscation by value is sought, the defence contests the valuation and the date at which it is taken.

Proportionality and the timing of the challenge. Freezing orders are made early and reviewed rarely. The defence challenges the measure at once, by reference to the sum that could realistically be confiscated on the charge as formulated, and seeks the release of assets exceeding it, offering a guarantee where appropriate. For a foreign client whose Spanish assets are the object of the measure, this work is often more urgent than the defence of the charge itself.

• Civil liability and confiscation
• Article 301: money laundering
• Spanish Criminal Code by article
• Spanish-language entry

This entry is provided for information only and does not constitute legal advice. The application of any provision depends on the circumstances of the individual case and requires examination of the case file by a qualified lawyer.