The end of a criminal case will no longer necessarily mean the end of the discussion about what happens to assets linked to criminal activity.
Law No. 37/2026 significantly strengthens the Portuguese regime for the recovery and confiscation of instrumentalities, proceeds and benefits of crime and creates new procedural mechanisms allowing confiscation to be dealt with separately.
The law transposes into Portuguese law the European legislation on asset recovery and confiscation and amends the Criminal Code, the Code of Criminal Procedure and several laws relating to organised crime, economic and financial crime and asset recovery.
The new rules enter into force on 1 September 2026.
In brief
The changes seek to make the identification and recovery of assets linked to crime more effective.
The main changes include:
• creation of autonomous confiscation proceedings;
• the possibility of confiscating assets even when the criminal proceedings are extinguished in certain situations;
• a broader concept of the benefit of crime;
• express inclusion of assets resulting from the transformation or reinvestment of unlawful benefits;
• stronger extended confiscation for certain forms of crime;
• the possibility of confiscating certain seized assets linked to criminal activity;
• creation of the procedural figure of the “affected person”;
• stronger defence guarantees for third parties whose assets are seized, frozen or subject to a confiscation request;
• stronger investigation and asset recovery powers for the Asset Recovery Office.
In short, the reform seeks to separate two issues more clearly: a person’s criminal liability and what happens to assets that may result from criminal activity.
1. New autonomous confiscation proceedings
The biggest new feature is the creation of genuine autonomous confiscation proceedings.
In certain circumstances, even if the criminal case can no longer continue against the defendants, the Public Prosecutor’s Office may continue to ask the court to declare certain instrumentalities, proceeds or benefits forfeited to the State.
This means that the end of criminal liability does not necessarily lead to the assets being returned to, or remaining with, their holders.
The discussion about the assets can continue separately.
2. Limitation, death, illness or amnesty may not prevent confiscation
The Criminal Code now provides that, once criminal proceedings have been brought, the instrumentalities, proceeds and benefits of an unlawful act may still be declared forfeited even if the proceedings are subsequently extinguished, under certain conditions, due to:
• limitation (statute of limitations);
• illness of the offender;
• amnesty;
• death of the offender.
The law does not allow a criminal conviction of a deceased person or of a person in respect of whom the proceedings have been extinguished.
Instead, it creates an autonomous mechanism to determine whether certain assets result from an unlawful act and should be forfeited to the State.
This distinction is key to understanding the new regime.
3. What counts as a benefit of crime?
The definition of economic benefit is also strengthened.
The following are now expressly covered:
• assets or rights constituting a direct or indirect economic benefit of the unlawful act;
• rewards associated with committing it;
• assets resulting from the transformation of those benefits;
• assets resulting from their reinvestment;
• quantifiable gains subsequently obtained from those transformations or reinvestments.
For example, if an unlawful economic benefit is later used to buy another asset or generates additional income, the mere transformation of the assets does not, in itself, prevent their confiscation.
4. Creation of the “affected person”
Another very relevant change is the creation of a new procedural status: the affected person.
This status may be held by an individual or a company whose assets are subject to:
• seizure;
• freezing;
• a confiscation request;
• a confiscation decision;
• early sale;
or whose rights over those assets are directly harmed.
This is particularly important because the asset in question will not always be formally registered to, or held by, the defendant.
It may belong to a family member, a company, a creditor or another third party who claims to have lawfully acquired the right in question.
5. What rights does the affected person have?
The new law seeks to balance the stronger asset recovery powers with specific procedural safeguards.
The affected person will be entitled, among other things, to:
• know the capacity in which they are involved;
• be informed of their rights and duties;
• take part in acts that directly concern them;
• present their defence;
• produce evidence;
• benefit from translation and interpretation when necessary;
• be represented by a lawyer;
• appeal against unfavourable decisions under the terms provided for by law.
When a confiscation request is received and the affected person does not have a lawyer, the law provides for one to be appointed.
6. Challenging the confiscation request
When the Public Prosecutor’s Office seeks to have an asset declared forfeited, it files a confiscation request identifying the assets, the facts and the evidence supporting the claim.
The affected person may contest that request and present their own evidence.
As a rule, they have 20 days to file a defence after being notified.
The confiscation decision thus follows its own procedure, designed to allow third parties who may lose assets to effectively defend their rights.
7. Extended confiscation of assets linked to criminal activity
The reform also strengthens the regime of so-called extended confiscation.
For certain categories of serious crime or crime likely to generate economic benefits, assets proven to result from criminal activity may be declared forfeited, provided the legal requirements are met.
Among other matters, the regime covers certain forms of:
• economic and financial crime;
• corruption;
• drug trafficking;
• terrorism;
• cybercrime;
• weapons-related crime;
• crime against the financial interests of the European Union.
The analysis is therefore no longer necessarily limited to the material proceeds directly identified with the crime that led to the conviction.
8. Confiscation of seized assets linked to criminal activity
The law also creates a mechanism for confiscating seized assets of considerably high value that are proven to result from criminal activity, in certain situations where other confiscation regimes cannot be applied.
It is therefore not enough for someone to own high-value assets.
The legal requirements must be met and the link between those assets and criminal activity must be demonstrated under the terms of the law.
9. Seizure, freezing and early sale of assets
The regime also strengthens the tools designed to prevent assets from disappearing before the final decision.
Measures such as the following may be used:
• seizure;
• economic bail (caução económica);
• preventive freezing (arresto preventivo).
In certain situations, the affected person may also request the sale of the seized assets when they no longer need to be kept as evidence.
The proceeds of the sale then remain deposited to the order of the court until a final decision is made on their fate.
This possibility may be particularly important for assets that depreciate, involve high maintenance costs or are difficult to manage during lengthy proceedings.
10. A stronger Asset Recovery Office
The reform also strengthens the role of the Asset Recovery Office (Gabinete de Recuperação de Ativos – GRA), which operates under the Criminal Investigation Police (Polícia Judiciária).
Its mission covers identifying, locating, seizing and freezing assets that may be declared forfeited or returned to the injured party, including in the context of international cooperation.
In certain situations, the financial or asset investigation may continue even after the inquiry has closed and, for the purpose of detecting and tracing the assets to be forfeited, even after the confiscation decision itself.
11. Victims’ rights do not disappear
Stronger confiscation in favour of the State does not mean that the rights of those harmed by the crime are no longer taken into account.
The law itself states that the confiscation regime is without prejudice to the rights of the injured party.
In addition, the injured party may, in certain circumstances, file or maintain a civil compensation claim within the autonomous confiscation proceedings themselves.
What is the main change?
The most important change is conceptual.
Until now, the discussion about the confiscation of assets was closely tied to the outcome of the criminal case itself.
The new regime aims to allow, in certain cases, the question:
“Can this person be held criminally liable?”
to be legally separated from the question:
“Do these assets result from criminal activity and should they be declared forfeited?”
The extinction of criminal proceedings may prevent a criminal conviction, but it no longer necessarily prevents an autonomous court decision on the assets.
This is a particularly relevant change in economic and financial crime cases, where the location, transformation and movement of assets may be as important as criminal liability itself.
Frequently asked questions
Can the State keep an asset just because there is a criminal investigation?
No. Seizure or freezing during the investigation is not the same as final confiscation. Confiscation depends on a court decision and on the legal requirements being met.
Can a third party who is not a defendant lose an asset?
A confiscation claim may be made in respect of an asset owned or held by a third party, but that third party now benefits from the procedural status of affected person, with their own rights of defence, evidence and appeal.
Does the defendant’s death automatically mean the assets go to the State?
No. It only means that, if the legal requirements are met, death may no longer prevent the continuation of autonomous proceedings to decide on the confiscation of the assets. A court decision is still required.
Are the new rules already in force?
Yes. Law No. 37/2026 entered into force on 1 September 2026.
How we can help
URB Law Services provides legal support in criminal proceedings and in asset-related matters connected with criminal investigations, namely:
• defence and representation in criminal proceedings;
• assistance with seizures and freezing orders;
• representation of third parties whose assets are affected by an investigation;
• contesting confiscation requests;
• analysis of the origin and ownership of assets;
• protection of the property rights of individuals and companies;
• assistance in cases involving economic and financial crime.
With an office in Almancil, in the Algarve, and representation in Lisbon, URB Law Services provides legal support to Portuguese and foreign clients in Portugal.
Law No. 37/2026 significantly strengthens the mechanisms for recovering assets linked to crime, but at the same time creates new procedural rules to guarantee the involvement and defence of those whose assets are at stake.
Contact us to find out more.
