12 GOGITIDZE AND OTHERS v. GEORGIA JUDGMENT Paragraph 5 This refers to the situation where proceeds of crime have been intermingled with property from legitimate sources. States Parties are required to subject to confiscation any such property up to the assessed value of the proceeds. As stated above, both situations may pose a problem when the confiscation system operates under an object confiscation system, which requires a determination of property obtained through the offence. When operating a value confiscation system these situations do not pose any problem. Paragraph 6 This requires States Parties to subject to confiscation not only primary but also secondary proceeds of crime. Primary proceeds are those assets directly obtained through the commission of the offence – e.g., a bribe of $100,000. The secondary proceeds, by contrast, refer to benefits derived from the original proceeds, like bank interest or the amount increased as a consequence of investment. In this regard, the Convention requires States Parties to provide mandatory confiscation for both the primary and secondary proceeds. Though the definition of the proceeds of crime given in article 2 (g) includes property “obtained through a crime” and property “derived from a crime,” the paragraph explicitly refers to “[I]ncome or other benefits” derived from the proceeds of crime and applies to benefits coming from any of the situations referred into paragraphs 4 and 5 – property transformed or converted and intermingled property. In other words, any appreciation in value of the proceeds of crime, even when not attributable to any criminal activity must also be liable to confiscation. ... Paragraph 8 Paragraph 8 recommends that States Parties consider the possibility of shifting the burden of proof in regard to the origin of the alleged proceeds of crime. ... [I]n addition to the sui generis procedures that accept non-criminal standards of evidence after the conviction is reached, a number of jurisdictions have also adopted civil procedures of confiscation that operate in rem and are governed by a standard of the preponderance of evidence. VII. Protection of bona fide third parties Paragraph 9 requires States Parties not to construct any of the provisions of that article as to prejudice the rights of bona fide third parties. The Convention does not, however, specify to what extent third parties should be provided with effective legal remedies in order to preserve their rights. Thus, in implementing this provision, States Parties may wish to take into account that some jurisdictions have opted to establish a specific procedure for third parties claiming ownership over seized property, in which the prosecution evaluates whether the claimant(s): • Have acted with the purpose of concealing the predicate offence, or are implicated in any of the ancillary offences; • Have legal interest in the property; • Acted diligently according to the law and commercial practice; • If the property requires a public registration of the transaction or any administrative procedure, such information has conducted (e.g., real estate, or vehicles); • If the transaction was onerous, whether it followed real market values.”