CEDH · CASELAW;JUDGMENTS;CHAMBER;ENG — 19 décembre 2024

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Does not bind the Court.   STRASBOURG 19 December 2024   FINAL   28/04/2025   This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Episcopo and Bassani v.   Italy, The European Court of Human Rights (First Section), sitting as a Chamber composed of:   Ivana Jelić , President ,   Alena Poláčková,   Krzysztof Wojtyczek,   Georgios A. Serghides,   Gilberto Felici,   Raffaele Sabato,   Artūrs Kučs , judges , and Ilse Freiwirth, Section Registrar, Having regard to: the applications (nos.   47284/16 and 84604/17) against the Italian Republic lodged with the Court under Article   34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two Italian nationals, Mr   Luigi Episcopo and Mr   Nelso Bassani (“the applicants”), on 3   August 2016 and 7   December 2017 respectively; the decision to give notice to the Italian Government (“the Government”) of the complaints raised under Article   6 §§   1 and 2 of the Convention, under Article   7 of the Convention concerning the foreseeability of the confiscation, and under Article   1 of Protocol No.   1, and to declare the remainder of the applications inadmissible; the parties’ observations; Having deliberated in private on 12   November 2024, Delivers the following judgment, which was adopted on that date: INTRODUCTION 1.     The case concerns the confiscation of the applicants’ assets, which were considered to constitute the direct proceeds of crime ( confisca diretta ) under Article   322   ter   of the Italian Criminal Code (“CC”), despite the discontinuation of the proceedings in respect of the offences in question owing to the expiry of the statute of limitation. THE FACTS 2.     Mr Episcopo (“the first applicant”) was born in 1956 and lives in Polla. He was represented by Mr A. Pagliano, a lawyer practising in Naples. 3.     Mr Bassani (“the second applicant”) was born in 1960 and lives in Arsiè. He was represented by Mr M. Paniz, a lawyer practising in Belluno. 4.     The Government were represented by their Agent, Mr   L. D’Ascia. 5.     The facts of the case may be summarised as follows.         the first applicant 6.     The first applicant was the director of and a shareholder in P.   s.r.l., a company active in the field of the construction and management of tourist facilities. Between 2001 and 2003, the company obtained public funds for the construction of a hotel. 7.     In 2005 the first applicant was charged with aggravated fraud in obtaining public funds ( truffa aggravata per il conseguimento di erogazioni pubbliche ) under Article   640   bis of the Criminal Code (“CC”), and other related crimes. He was accused of, inter   alia , having submitted, in his capacity as director of P. s.r.l., false information and documents to the public authorities in order to obtain public funds. 8.     By a judgment of 6   March 2008, the Sala Consilina District Court convicted the applicant of most of the charges, including that of aggravated fraud. It sentenced him to three and a half years’ detention, ordered him to pay damages to the public authorities and ordered the confiscation of assets equivalent to the profit of the offence pursuant to Articles   640   bis and 322   ter of the CC. Having established that the public funds unlawfully obtained by the applicant amounted to 844,120.95   euros (EUR), the District Court ordered the confiscation of the applicant’s shares in P. s.r.l. up to that value. The applicant appealed. 9 .     By a judgment of 26   June 2014, the Salerno Court of Appeal declared that the offences had become statute-barred, and discontinued the proceedings against the applicant. Nevertheless, the Court of Appeal examined whether the applicant had advanced sufficient arguments to justify – under Article   129 §   2 of the CC – the quashing of the first-instance conviction and the delivery of an acquittal judgment on the merits. The Court of Appeal found that the applicant’s arguments and evidence did not justify his acquittal; on the contrary, it concluded that “the evidence adduced can only uphold the finding of liability of Mr   Episcopo in respect of the criminal charges”. The Court of Appeal revoked the confiscation of the applicant’s shares in P. s.r.l and ordered, instead, the confiscation of the hotel building up to the value of EUR   844,120.95. It considered, in this respect, that there was no need to resort to confiscation by equivalent means, since Article   322   ter of the CC provided that direct confiscation should prevail whenever feasible over value confiscation; in the present case, it was possible to confiscate the direct proceeds of the crime, which consisted of the building that had been erected with the unlawfully obtained funds. The Court of Appeal further deemed, in line with the recent relevant case ‑ law of the Court of Cassation (in particular, judgment no.   31957 of 23   July   2013, Cordaro ), that the “extinction” ( estinzione ) of the offence did not preclude the imposition of a measure of confiscation, since the criminal liability of the applicant had been established. It stated, in particular, as follows: “When, as in the present case, there is an actual finding of liability, then there is the possibility of ordering confiscation – even in relation to an offence that has become extinct. In the case under examination, in particular, the offence had become extinct after the first-instance conviction, within a context in which the judges were able to ascertain the facts relating to the offence and the liability of the defendants, as well as the unlawful provenance of the money and of the goods subject to confiscation; it follows that the guarantee of a full finding of liability – which is ensured by the term “conviction” referred to by Article 240 of the Criminal Code as the necessary precondition of the deprivation of assets – has to be considered as fulfilled”. 10 .     The applicant appealed to the Court of Cassation, which – by a judgment of 13   January 2016 that was published on 26   February 2016 – upheld the previous judgment. The Court of Cassation referred, in particular, to a recent judgment of the Plenary Court of Cassation (no.   31617 of 21   July 2015, Lucci ) which, settling a previous divergence in case-law, established that the direct confiscation of assets could be ordered even if the proceedings in question had been discontinued, provided that there had first been a conviction and that the finding of liability in respect of the accused had subsequently remained unaltered. The Court of Cassation also addressed the fact that the building was owned by P. s.r.l. and not by the first applicant; however, since the crime in question had been committed in order to further the company’s interests and by its legal representative, the court deemed that fact to be immaterial.       the second applicant 11.     The second applicant was the director and sole shareholder of the company C.T. s.r.l. 12.     He was charged, together with other persons, of participating in a criminal organisation under Article   416 of the CC and of issuing false tax statements (namely, invoices for non-existing operations) under Article   2 of Legislative Decree no.   74/2000, from 2002 to 2004. 13.     On 6   December 2004 the Bassano del Grappa preliminary investigations judge ordered the preliminary seizure of the applicant’s money which was deposited in two bank accounts and invested in a life insurance policy, in the overall amount of EUR   32,409.99. 14 .     In judgment of 7   May 2008, the Bassano del Grappa District Court convicted the applicant on all charges. It sentenced him to three years and four months’ detention and ordered the confiscation of the seized assets, pursuant to section 1 §   143 of Law no.   244/2007 and Article   322   ter of the CC. The applicant appealed. 15 .     In a judgment of 22   May 2013, the Venice Court of Appeal noted that the offences had become statute-barred at the latest in April 2013; as a consequence, it discontinued the proceedings, without deliberating on the question of the confiscation of the applicant’s assets. 16.     The applicant appealed, submitting that the Court of Appeal had delivered its judgment without first conducting an adversarial hearing – thus not allowing him to present his arguments (particularly in respect of the above-mentioned confiscation). On 27   May 2014, the Court of Cassation quashed the appellate judgment and remitted the case to the Venice Court of Appeal. 17 .     In the meantime, following the discontinuance of the proceedings, the applicant lodged an application with the Court of Appeal seeking that the seized assets be restituted to him. On 20   August 2013, the court rejected that application, noting that the case was still ongoing. 18 .     In a judgment of 12   February 2016, the Venice Court of Appeal acquitted the applicant of the offence of participation in a criminal association. In respect of the charges of making false tax declarations, the Court of Appeal stated that “the adduced evidence demonstrates without any doubt [the existence of] an agreement between Bassani and S. to commit the crimes” and that “the liability of Bassani in respect of the charges must be confirmed”. Nevertheless, because the offences had become statute-barred, the proceedings were discontinued. The Court of Appeal further deemed that the above-mentioned confiscation ordered in the case at hand had constituted a form of direct confiscation of the proceeds of crime which, according to the recent judgment of the Plenary Court of Cassation (no.   31617 of 21   July 2015, Lucci ) could be applied despite the discontinuance of the proceedings in question, since the applicant had been convicted at first instance and the finding of his criminal liability had subsequently been left unaltered on the merits. 19 .     The applicant appealed to the Court of Cassation, which – by a judgment of 19   January 2017 that was published on 9   June 2017 – found that the previous judgments had “adequately explained ... why the applicant’s liability had to be considered as fully ascertained” and confirmed the confiscation. RELEVANT LEGAL FRAMEWORK AND PRACTICE         RELEVANT DOMESTIC LAW AND PRACTICE    Confiscation 20 .     Article   240 of the CC, which is part of a chapter dedicated to “property security measures” ( misure di sicurezza patrimoniali ), provides in its relevant parts for a direct form of confiscation. The provision reads as follows: “1. In the event of conviction, the judge may order the confiscation of the things that were used or intended for the commission of the offence, and of the things that constitute the product or profit thereof. 2. [The judge] always orders the confiscation: 1) of things that constitute the price of the offence; 1- bis ) ... 2) of things whose manufacturing, use, harbouring, possession or sale constitutes an offence – even if no conviction has been pronounced. ...” 21 .     Article   322   ter of the CC – introduced by Law no.   300 of 2000 and subsequently amended by Law no.   190 of 2012 – provides that confiscation is mandatory in respect of certain crimes. Such confiscation must be carried out, whenever possible, in respect of the direct profit or price of the crimes (“direct confiscation”); in the alternative, it must be carried out in respect of assets of equivalent value (“value confiscation” or “confiscation by equivalent means”). The provision reads as follows: “1. In the event of conviction or of an [agreement to reach a] plea bargain at the request of the parties pursuant to Article 444 of the Code of Criminal Procedure in respect of one of the offences provided by Articles 314 to 320 ..., [the judge] shall always order the confiscation of the goods constituting the profit or price of the offences, unless they belong to a third party who has not taken part in the commission of the offence, or, when this is not possible, the confiscation of goods at the disposal of [ nella disponibilità di ] the offender for a value corresponding to such price or profit. ... 3. ... the judge, in delivering the judgment of conviction, shall determine the amount of money or identify the goods to be confiscated insofar as they constitute the profit or price of the offence or their value corresponds to the profit or price of the offence.” 22.     The application of this provision has been subsequently extended to other crimes. In so far as is relevant for the present case, Article   640   quarter of the CC established that Article   322 ter applied also in respect of the offence of aggravated fraud, as provided by Article   640   bis . 23.     Additionally, section 1 §   143 of Law no.   244 of 2007 ( Legge finanziaria 2008 ) established that Article 322 ter of the CC applied in respect of the offences of false tax statements provided by sections 2 et seq. of Law no. 74 of 2000. By Legislative Decree no.   158 of 2015, section 1 §   143 of Law no.   244 of 2007 was replaced by a substantially similar provision, which is now contained in section 12   bis of Law no.   74 of 2000. 24 .     Article   210 §   1 of the CC provides that the extinction ( estinzione ) of an offence – which may occur (among other reasons) because it has become statute-barred – precludes the application of security measures. However, Article   236 of the CC excludes the applicability of Article   210 of the CC in respect of confiscation.    Nature and purpose of the confiscation under domestic law 25 .     The domestic legal order distinguishes between penalties and security measures. In principle, penalties are aimed at sanctioning an offence that has been committed, whereas security measures are aimed at preventing the commission of a further offence. 26.     Unlike Article   240 of the CC (see paragraph 20 above), Article   322 ter of the CC does not explicitly state whether the form of confiscation provided by Article   322   ter constitutes a penalty or a security measure. 27 .     The relevant domestic case-law, given that Article   322   ter provides for both direct confiscation and confiscation by equivalent means, classifies direct confiscation as a security measure and confiscation by equivalent means as a penalty. The Plenary Court of Cassation (judgment no.   31617 of 21   July 2015, Lucci ) has reasoned, in this respect, that direct confiscation applies to assets which directly derive from an unlawful transaction and which the accused was not entitled to obtain, even when assessed from a civil law perspective; it has therefore no punitive purpose, but is rather aimed at restoring the previously prevailing economic situation and avoiding the accumulation by the offender of assets of unlawful origin. On the other hand, confiscation by equivalent means, which lacks a direct link between the offence and the assets, is aimed at restoring the previously prevailing economic situation by imposing a corresponding sacrifice on the offender, and therefore has a punitive character. 28 .     Within this context, the classification of the confiscation of a sum of money has given rise to diverging interpretations. One line of case-law holds that the confiscation of money should always be considered to constitute confiscation by equivalent means, since it is impossible to materially identify the profit or price of the offence in question (see, for instance, judgment no.   36293 of 2011). A second line of case-law holds that the confiscation of money can be considered to constitute direct confiscation only if there is evidence that the money directly derives from the commission of the offence in question (see, for instance, judgment no.   11288 of 2010). 29.     In judgment no. 10561 of 30   January 2014 ( Gubert ), the Plenary Court of Cassation introduced a third interpretation, which holds that the confiscation of money must always be considered to constitute direct confiscation. 30 .     In judgment no.   31617 of 21   July 2015 ( Lucci ), the Plenary Court of Cassation, acknowledging the existing divergence in case-law, upheld the solution arrived at by virtue of the Gubert judgment, thus confirming that the confiscation of money should always be considered to constitute direct confiscation and that there was therefore no need to prove that the money in question directly derived from the stated criminal activity.    Applicability of confiscation when the offence in question is statute ‑ barred 31 .     The possibility to apply confiscation under Articles   240 and 322   ter of the CC despite the fact that the offence has become statute-barred has given rise to diverging interpretations on the part of the Court of Cassation. 32 .     This divergence was first addressed by the Plenary Court of Cassation in judgment no.   5 of 25   March 1993 ( Carlea ), which clarified that confiscation under Article   240 of the CC required that the accused be convicted and that confiscation could not be applied in the event that the offence became extinct. Moreover, the Plenary Court of Cassation noted that confiscation required an assessment on the merits, which is incompatible with a declaration that the offence had become extinct. 33 .     Several years later, the same issue was again submitted for consideration to the Plenary Court of Cassation, which addressed it in judgment no.   38834 of 15   October 2008 ( De Maio ). On that occasion, the Plenary Court of Cassation noted that no real divergence in case-law had developed after the Carlea judgment, and confirmed that, according to the wording of Article   240 of the CC – reproduced in Article   322   ter of the CC – confiscation could not be applied in the event of extinction of the offence. At the same time, the Plenary Court of Cassation distanced itself from the Carlea judgment, noting that the extinction of the offence did not necessarily preclude a further assessment on the merits, and invited the legislature to reconsider the possibility of extending the applicability of the confiscation to cases in which offences had been extinguished, in order to prevent accused persons from benefiting from assets of unlawful origin. 34 .     After the delivery of the De Maio judgment, part of the case-law of the Court of Cassation followed the interpretation provided by the Plenary Court of Cassation and excluded the applicability of the confiscation when offences had become statute-barred (Court of Cassation judgments no.   12325 of 2010, no.   17716 of 2010, no.   8382 of 2011, and no.   7860 of 2015). Another line of case-law, however (drawing from the considerations addressed in the De Maio judgment), held that confiscation could be ordered even if the offence in question had become extinct, provided that there had been a finding of liability and that the assets had been found to be linked to the commission of the offence (Court of Cassation judgments no.   2453 of 2009, no.   32273 of 2010, no.   39756 of 2011, no.   48680 of 2012 and no.   31957 of 2013). 35 .     The issue was then again remitted to the Plenary Court of Cassation which, in judgment no.   31617 of 21   July 2015 ( Lucci ), upheld the most recent development and found that direct confiscation could be applied despite the extinction of the offence in question. The principle set out by the Plenary Court of Cassation reads as follows: “The judge, in declaring the extinction of an offence owing to the expiry of the statute of limitations, may apply, under Article 240 § 2 (1) of the CC, the confiscation of the price of the offence and, under 322 ter of the CC, the confiscation of the price of or profit [derived from] the offence, provided that it amounts to direct confiscation and that there has first been a conviction, in respect of which the findings on the merits remain unaltered as to the existence of the offence, the liability of the accused and the classification of the property to be confiscated as the profit or the price of the offence.” The Plenary Court of Cassation also clarified that an incidental finding of liability was insufficient: there had to be a formal conviction at a lower level, which was left unaltered in substance by the subsequent decisions declaring the offence statute-barred. 36 .     Article   578   bis of the Code of Criminal Procedure (“CCP”) – which was introduced by Legislative Decree no.   21 of 2018 and subsequently amended by Law no.   3 of 2019 – currently reads as follows: “1. When ... confiscation as provided for in Article 322 ter of the Criminal Code has been ordered, the Court of Appeal or the Court of Cassation – when declaring that the offence in question has become extinct owing to the expiry of the statute of limitation or to [the promulgation of] an amnesty – shall decide on the appeal only for the purpose of [deciding on issues relating to] the confiscation, based on a prior ascertainment of the defendant’s criminal liability.”    Other relevant provisions 37 .     Article 129 §   2 of the CCP provides that, when an offence has become statute-barred but it can clearly be established that the defendants have not committed that offence or that the alleged events never in fact occurred or did not constitute an offence or did not fall under criminal law, the courts must acquit the defendants on the merits. 38 .     Article   618 of the CCP provides that, if an individual section of the Court of Cassation ( sezione semplice ) finds that a certain issue has prompted (or may prompt) the relevant case-law to diverge, it may refer the case to the Plenary Court of Cassation ( Sezioni Unite ) of its own motion or at the request of one of the parties involved. By Law no.   102 of 23   June 2017, an additional paragraph 1   bis was added to Article   618 stating that, in the event that an individual section of the Court of Cassation ever intended to diverge from a principle established by the Plenary Court of Cassation, it had to refer the case to the latter.       INTERNATIONAL LAW 39.     Several international agreements provide for the confiscation of the proceeds of crime or of property of equivalent value following a criminal conviction. The origins of such an approach may be traced to the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances Article   5 of which provided for – in addition to the more traditional confiscation of instruments used in the commission of such an offence ( instrumentum sceleris ) – the confiscation of the proceeds of drug ‑ related offences ( productum sceleris ) or property of equivalent value. Over time, the provisions on confiscation broadened to encompass cross-border crime, organised crime and other serious offences (for instance, under Article   8 of 1999 International Convention for the Suppression of the Financing of Terrorism and under Article   12 of the 2000 United Nations Convention against Transnational Organised Crime). 40.     By acceding to the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (the “Strasbourg Convention”) – which was opened for signature on 8   November 1990 in Strasbourg and which entered into force on 1   September 1993 (in respect of Italy, on 1   May 1994) – the signatory parties undertook to adopt measures that would enable them to confiscate instrumentalities and proceeds of crimes (or property of equivalent value), to adopt legislation establishing as an offence the laundering of proceeds of crime, and to cooperate in the enforcement of such measures. The Strasbourg Convention allowed States parties thereto to limit its application to selected offences and to refuse cooperation in a large number of cases – including when the confiscation sought did not “relate to a previous conviction, or a decision of a judicial nature or a statement in such a decision that an offence or several offences have been committed”. 41 .     Article   31 of the 2003 United Nations Convention against Corruption provided for the confiscation of instrumentalities or proceeds of crime or property of equivalent value. The Convention also provided a form of non ‑ conviction-based confiscation: under Article 54 § 1 (c) it provided that parties should “consider taking such measures as may be necessary to allow confiscation of such property without a criminal conviction in cases in which the offender cannot be prosecuted by reason of death, flight or absence or in other appropriate cases”. 42.     The Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism, which was opened for signature on 16   May 2005 in Warsaw and which entered into force on 1   May 2008 (“the Warsaw Convention”; in respect of Italy, it entered into force on 1   June 2017), was intended to supersede the Strasbourg Convention but was not ratified by all member States of the Council of Europe. Although containing substantially similar undertakings in respect of the confiscation of proceeds of crimes, it added under Article   23 §   5 the provision that States were required to cooperate with each other on the execution of measures equivalent to confiscation that did not constitute criminal sanctions, in so far as they were ordered by a judicial authority in relation to a criminal offence. 43 .     Additionally, some international organisations have produced good practice guides and recommendations regarding non ‑ conviction ‑ based confiscation, such as the 2004 publication entitled “G8 Best Practice Principles on Tracing, Freezing and Confiscation of Assets”, the 2009 World Bank publication “Stolen Asset Recovery : A Good Practices Guide for Non ‑ Conviction-Based Asset Forfeiture” and the OECD’s Financial Action Task Force Recommendations entitled “International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation” (adopted in 2012 and last updated in 2023).     EUROPEAN UNION LAW 44.     Within the framework of the European Union, a number of instruments have been adopted in order to further progressive harmonisation and cooperation in the field of the confiscation of the proceeds of crime. 45.     By a Joint Action of 3   December 1998 (98/699/JHA) on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds from crime, the EU member States undertook not to derogate from the Strasbourg Convention in respect of offences that are punishable by deprivation of liberty for a maximum of more than one year.   Substantially similar provisions were subsequently included in the Council Framework Decision of 26   June 2001 (2001/500/JHA) on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime. 46.     The Council Framework Decision of 24   February 2005 (2005/2012/JHA) on the confiscation of crime-related proceeds, instrumentalities and property reiterated these obligations (Article   2) and introduced a form of extended confiscation that was applicable to persons convicted of a number of serious crimes, in the event that the domestic courts were fully convinced that the assets in question derived from criminal activities (Article   3). 47 .     The Directive on the freezing and confiscation of the proceeds of crime in the European Union of 3   April 2014 (2014/42/EU) provided the obligation to enable the confiscation of instrumentalities and proceeds of crime or property of equivalent value, subject to a final conviction for a criminal offence (Article   4 §   1). The Directive provided for a form of non ‑ conviction ‑ based confiscation that was applicable in the event that criminal proceedings had been initiated and could have led to a criminal conviction in respect of an offence that could have afforded economic benefit to the accused, but conviction was not possible owing to illness or absconding of the accused person (Article   4 §   2). The Directive also provided for a form of extended confiscation of property belonging to a person convicted of a criminal offence that could have afforded him economic benefit, in the event that the domestic courts were convinced that that property derived from criminal conduct (Article   5). 48 .     All the European Union instruments mentioned above have been replaced by the recent Directive on asset recovery and confiscation of 24   April 2024 (2024/1260/EU). The Directive substantially extended the forms of non-conviction-based confiscation. In addition to the traditional conviction-based confiscation of instrumentalities and proceeds of crimes or property of equivalent value (Article   12) and to the extended confiscation already provided for under the previous legislation (Article   14), it provided for the confiscation of assets in the event that a conviction was not possible owing to illness, absconding or death of the accused person, or to the expiry of a limitation period lower than fifteen years (Article   15); furthermore, it provided for the confiscation of property where the domestic courts were convinced that the property in question derived from criminal conduct committed within the framework of a criminal organisation and could give rise to substantial economic benefit (Article   16). THE LAW          JOINDER OF THE APPLICATIONS 49.     Having regard to the similar subject matter of the applications, the Court finds it appropriate to examine them jointly in a single judgment.        ALLEGED VIOLATION OF ARTICLE   7 OF THE CONVENTION 50.     The applicants complained that the confiscation of the proceeds of crimes after such crimes had become statute-barred had not been based on a sufficiently foreseeable law, as required by Article   7 of the Convention, which reads as follows: “1. No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed. ...” Admissibility      The parties’ arguments    The Government 51.     The Government argued that the complaints raised by the applicants under Article   7 of the Convention should be declared incompatible ratione   materiae , since the confiscation had not amounted to a penalty under that provision. 52.     In that respect, the Government acknowledged that the form of confiscation in question was closely connected to a criminal offence, since it was ordered by a criminal court following a finding of criminal liability in substance. Nevertheless, all other relevant criteria established by the Court’s case-law led to the conclusion that it did not amount to a penalty. 53.     As regards the classification of direct confiscation under domestic law, the Government noted that direct confiscation under Article   240 of the CC – which was substantially similar to the measure applied in the case at hand – was explicitly classified as a property security measure. Additionally, according to the established related case-law, the direct confiscation of the price or proceeds of crime – as provided by Article   240 of the CC, by Article   322   ter of the CC or by any other similar provision – was classified as a security measure. The Government noted, among others, judgments delivered by the Plenary Court of Cassation no.   3802 of 1983 ( Marinelli ), no.   26654 of 2008 ( Fisia Impianti ), no.   31617 of 2015 ( Lucci ) and no.   42415 of 2021 ( Coppola ), which had held that direct confiscation had a restorative and preventive function and should therefore be classified as a security measure rather than as a penalty. 54.     As regards its nature and purpose, the Government noted that direct confiscation had a double function: restorative and preventive. As to the first, it was aimed at removing the effects of the unlawful conduct in question and restoring the previously prevailing economic situation, depriving the accused of an economic gain that he was not entitled to receive; as to the second function, that was aimed at preventing the reuse of assets of unlawful origin. Direct confiscation lacked, by contrast, the punitive function that was typical of penalties. 55.     As to the effects of the measure of confiscation, the Government pointed out that, while direct confiscation resulted in a final deprivation of property, this did not exceed the economic gain derived from unlawful activities. 56.     The Government also drew a parallel with the confiscation measure examined in the case of Gogitidze and Others v.   Georgia (no.   36862/05, 12   May 2015), which had been marked by characteristics substantially similar to those of the measure of direct confiscation under Italian law and was considered to constitute a measure in rem aimed at the recovery of unlawfully obtained property. By contrast, such a form of confiscation had to be distinguished from the form of confiscation examined in the case of Welch v.   the United Kingdom (9   February 1995, Series A no.   307-A), which was considered to constitute a penalty in view of the fact that it could exceed the proceeds of the crime in question, that it required an assessment of the degree of fault of the accused and that it could lead to detention in the event of default. It also had to be distinguished from the form of confiscation examined in the case of G.I.E.M. S.r.l. and Others v.   Italy ((merits) [GC], nos.   1828/06 and 2   others, §   210, 28   June 2018), which was considered to constitute a penalty in view of its classification under domestic law and the severity of its effects, which extended beyond the restoration of the previously prevailing economic situation. 57.     Ultimately, the Government concluded that direct confiscation under Article   322   ter of the CC did not constitute a “penalty” for the purposes of Article   7 of the Convention. 58.     With particular regard to the second applicant, the Government added that the confiscation of his money had to be considered a form of direct confiscation, in line with established domestic case-law. They cited, in this respect, judgments of the Plenary Court of Cassation no.   10561 of 2014 ( Gubert ), no.   31617 of 2015 ( Lucci ) and no.   42415 of 2021 ( Coppola ).    The first applicant 59.     The first applicant maintained that, contrary to the Government’s submissions, the confiscation in question had constituted a “penalty”. 60.     Relying on the criteria set forth in the case of G.I.E.M. S.r.l. and Others (cited above, §§   215-34), he submitted that Article   322   ter did not provide an explicit classification of the form of confiscation in question and that domestic case-law was unclear in that regard, whereas the prevailing domestic legal scholarship considered that it constituted a penalty. 61 .     Moreover, the first applicant submitted that the form of confiscation in question had a punitive character, as shown by the fact that it was mandatory, required a criminal conviction at least in substance and could be converted to confiscation by equivalent means in the event that the direct confiscation could not be enforced. 62 .     The first applicant also pointed out that the legislature, when introducing Article   322   ter , had explicitly stipulated that Article   322   ter did not apply to offences committed before the Article’s entry into force (Article   15 of Law no.   300 of 2000) – thus applying the principle of non ‑ retroactivity, which is typical of penalties. 63.     Ultimately the criminal nature of the confiscation would also be confirmed by the severity of its consequences.    The second applicant 64.     The second applicant, too, maintained that the confiscation, as applied to him, had to be considered as constituting a “penalty”. 65 .     He mainly argued that, in his case, the domestic courts had applied a form of confiscation by equivalent means, as they had not examined whether the confiscated assets had a direct connection with the crime allegedly committed.