Compensating the Social Harm of Illicit Trade by Social Reuse of Confiscated Assets: Opportunities and Side Constraints

Various forms of illicit trade, such as drug trafficking, trading in counterfeit products, wildlife trafficking, and cigarette smuggling, can have a significant impact on local communities and cause a deterioration in the living environment, undermine institutional structures, and increase violent conflicts between and within social groups. This social harm is real, albeit difficult to gauge and compensate, as traditional procedures focus on individual perpetrators and victims. This paper addresses a promising response to illicit trades, namely social reuse of confiscated assets. This entails the seizure and confiscation of immovable and movable property for the direct benefit of impacted communities. The paper discusses how social reuse of seized and confiscated assets operates within EU countries, how social harm can be assessed, and which barriers to social reuse can be identified. We find that there is much potential in the concept of social reuse of confiscated assets, which can and does already benefit impacted communities. Crucially, we recommend that central authorities are set up at the national level and that professional asset managers are equipped with sufficient means and staff to ensure the effective reallocation of confiscated assets in a way that empowers local communities and makes them more resilient to organised crimes and illicit trades.