Notice of freezing and confiscation orders in accordance with the Regulation (UE) 2018/1805

Part 1. Registry requirements

1. What is the procedure to lodge or present these judicial orders in the Land Register? Particularly electronic.

Judicial orders can be presented at the land register in three different ways:
-Hand delivery
-By mail
-By fax
Additionally, electronic judicial order can be entered into the registry by two different paths:
-By submitting it to our electronic site www.registradores.org
-Internal Public administration and judiciary communication through a specific IT program
Please note that land registry Email is not a mean of presentation at the Land Register, because it would alter our priority system. The priority in the Land Register is given by the time of presentation and entry note in the land registry Diary Land book. For this reason, both IT paths to enter a judicial order electronically signed are dully synchronized with the land registry Diary Land Book. This does not happen with the email reception of documents, which is not allowed in any case.
By electronic judicial order I mean any judicial order which is signed by the Court officer, judge or secretary (upon each case of judicial resolution according to the civil or criminal procedure law) with advanced electronic signature and that can be checked the integrity of the sign and document by consulting the CSV in a web domain.
The Court officer or clerk by delegation of the Court judge or Court secretary its encourage to use the electronic procedure for submitting electronic judicial orders is by using an internal communication path developed by CORPME in cooperation with the Justice ministry or by the electronic site which require advanced electronic signature by the presenter.
Additionally, the online application procedure can be used as well submit to the land registry judicial orders electronically signed, not only by the Court judges, secretaries, officials or clerks but as well by any person provided with an electronic signature. Prosecutor officers, lawyers and particular citizens, for example, can themselves electronically enter a judicial order electronically signed by our website. The website online registry is dully connected to the Entry land book so that temporary stamp is given while entered. As well integrity of the document submitted is granted through the IT used.

2. Possibility of registering these orders in the event that who appears as the owner of a property according to the land registry («A») is a different person from the defendant (or person «B») who is issued a freezing or confiscation order against

1.1 Should the judgment be registered even if the owner according to the land register is “A” and the judicial measure is concerning to “B”? On the one hand, in general terms the answer to this question will be NO. One of the main principles in our system, along with the “Priority” principle aforementioned, is principle of “Chain of title”. This means that no freezing or confiscation order can be registered if the owner by the Land Register is not the defendant or is party at the procedure.
Chain of title is understood as the need for entries to be linked to one another in a concatenation.
So, in order for titles declaring, transferring, encumbering, modifying or terminating ownership or other in-rem rights in property to be registered or caveated, the right of the person executing the acts in question (or the person in whose name the acts in question are executed) must be previously registered or caveated. However, there is one specific exception in case of freezing orders, especially in criminal proceedings.
Article 20.7 of our mortgage law says that “Any notice of claim, attachment or prohibition of disposal, or any other notice provided for in the law, may not be taken if the registered owner is a different one than the one against whom the procedure has been directed. In criminal and confiscation proceedings, an entry may be made of a preventive seizure or a prohibition on disposing of the assets, as a precautionary measure, when, in the opinion of the judge or court, there are reasonable indications that the true owner of the assets is the accused, making it so stated in the commandment
1.2 Otherwise, should the land register refuse the registration or apply for any type of clarification? The land register will suspend the registration, until the defendant´s ownership title should be registered or is ensured that it has been caveated or he or she will require the judge to explicitly manifest that there are reasonable indications that the true owner of the assets is the accused, despite the formal registered owner is someone else. It frequently involves judge suspicious of different overlapped (societies corporate veil piercing theory).
1.3 In order to register a freezing or confiscation order in a property of “A”, “A” has to be part of the procedure, and the judicial document has to indicate that “A” has been sued. Or in the very rare exception of article 20.7 mortgage law, the judge to explicitly manifest that there are reasonable indications that the true owner of the assets is the accused, despite the formal registered owner is someone else

3. Type and duration of the registration of these orders

• A freezing order and a confiscation order are considered different; each one of them leads to a different registration or notice. They first one leads to a provisional entry, while the second one to a definite entry.
• A freezing order does not lead to indefinite registrations. It always leads to temporal notice, 4 years duration according to article 86 Mortgage Law, which can be extended 4 years as many times as it is necessary. It always leads to temporal notice, 4 years duration according to article 86 Mortgage Law, which can be extended 4 years as many times as it is necessary. Also, the judicial orders corresponding to opening procedures lead to a provisional or temporary registration. The criteria are defined by Land Register’s main Law, this is Mortgage Law. As said before, the judicial orders corresponding to opening procedures lead always to a four years duration notice, according to article 86 Mortgage Law, which can be extended 4 years as many times as it is necessary. This effect cannot be changed by the judicial decision.
• A confiscation order leads to indefinite registrations, which can only be changed by another judicial order.

Part 2. Registry effects

1. Effects of the freezing order once registered

• The freezing orders involve a warning to third parties. The notices publish the disability of the owner in order to make disposition or administration acts. The Register block in this case can be total or partial, depending on the terms of the Court decision. Once registered this restriction, the effect might be to block or freeze subsequent registrations, depending on the content of the judicial measure, apart from implying a warning to third parties.
• Prohibition of disposal: the owner is not allowed to sell, mortgage or carry out any other act of disposal on the property. The order blocks any possible registration. Regardless of the date of the act or contract that intends to access the Registry. Once registered this restriction, the effect might be to block or freeze subsequent registrations, depending on the content of the judicial measure, apart from implying a warning to third parties. This judicial measure does not block registering other notices about judicial disputes claiming a different amount of money.
• If there are several notices about judicial measures registered, the first one entering the register is going to have priority.
• Once the priority notice is executed, the other ones are going to be cancelled.
• If the owner carries out some acts of disposition relative to the land which has the freezing order, that act could never be registered.
• The process can lead to forced sale or public auction, in order to satisfy the creditor.
• If in the legal proceeding there is remaining money, the no priority notices are going to be cancelled, but that remaining money will be used to pay those claims by order.
• Freezing order involves the possibility of auctioning the property in the same way as a forced sale.
• The only effect of a freezing order is to close the Register to acts related to the affected land. No act of administration or disposal done by the owner regarding the land affected can be registered. However, this judicial measure does not block registering other notices about judicial disputes claiming a different amount of money. If there are several notices about judicial measures registered, the first one entering the register is going to have priority.
• The freezing order which has been registered by a notice can be also cancelled, after four years If it´s duration is not extended and also can be cancelled by Judicial decision.

2. Effects of the confiscation order once registered

• As said, a confiscation order leads to a definite entry, as they mean the final deprivation of the property of a natural or legal person.
• The registration of a confiscation order gives the property to the State or the owner that the procedure has determined. Once registered, the owner is protected among third parties under article 34 of our Mortgage Law, by the public faith principle. The owner also has in his favour the principle of legitimation of art 38 of the Mortgage law, and therefore, it is the one who is presumed to have the rights over the property. Once registered, all of the effects that the Registry can provide belong to the owner which has been registered and its ownership and rights can only be questioned or changed by a judicial order or by his own will.

3. What is the registry proceeding and moment in which the opening procedures of freezing or confiscation are applied for registration?

In the opening procedure the Criminal Courts usually adopt provisional measures that pursue two objectives: to ensure that the effective judicial protection is preserved and to be proportionate. Also, these measures must be necessary and based in a criminal rate.
As for the examination made by the Land Registrars when receiving freezing orders, they cannot examine the substance or proportionality of the measure adopted, due to their public order nature.
Nevertheless, the examination of the Land Registrars extends to the following aspects. First of all, there must be a coordination between the resolution and the order submitted (both documents must be presented in the Registry). Secondly, these kinds of orders, due to their temporary nature, don’t have to be based in final resolutions, which is different from confiscation orders, as it will then be explain. Also, the property and the person prosecuted must be perfectly identified (the order must be against the person that is the owner in the Registry, with the exception of the article 20.7 of our Mortgage Law, as explained in the previous questionnaire). Furthermore, in some cases some people have to be notified or have to be part in the procedure, for instance if it is the primary residence of a family. Finally, if it is a prohibition of disposal order, it must specify the disposition acts that are prohibited and to what extent. Sometimes the order includes also the garnishment of the property. In that case the quantities claimed must be also specified.
As for the entry that is made in these opening procedures, due to the temporary effect of the measures adopted, they will be registered through an annotation. This entry is provisional, it lasts 4 years (renewable) and in some cases it can be converted into a definitive entry.
As for the confiscation orders, the examination of the Land Registrars will extend to the same issues, except that, in these cases, orders must be based in final resolutions. The documents that have to be presented in the Registry are the final resolution and the order executing it. Another difference will be that these orders lead to a definite entry, as they mean the final deprivation of the property of a natural or legal person. However, it is unusual to receive confiscation orders in an opening procedure, the normal thing is to receive previously a freezing or prohibition of disposal order (based in articles 338 of our Criminal Process Law, article 127.8 of our Criminal Law and articles 20.7 and 42 of our Mortgage Law).

4. What are the executing authorities of these orders in this national system and what is the role of the land registers?

The executing authority is the Criminal Judge or Court that deals with the proceeding and who sends an injunction together with a resolution testimony issued by the Court Clerk to the Registries in which the properties of the legal or natural person prosecuted are.

The role of Land Registrars will be to register the orders and to prevent that any operation that goes against the order annotated, makes an entry in the Registry.

The freezing orders, if they include a prohibition of disposal and they are issued by a Criminal Court, mean that no disposition act can be registered, neither if it has been previous nor if it is subsequent to the order.

As for the confiscation order, the Land Registrar will register the property in favour of the State who will be, from then on, to all effects, the owner. As mentioned previously, this entry would be made by presenting the final Resolution together with the order addressed to the Registry. However, the execution, administration and/or conservation of these properties can be assigned by the Criminal Court to the “Oficina de Realización y Gestión de Activos” (ORGA). This Office can be the one in charge of selling the property (by a public auction or by a specialized entity- Article 367 of our Criminal Process Law; Royal Decree 948/2015, of 23rd October). In these cases, the document that will be presented in the Registry will be a Certification of the ORGA that has to comply with the content stablished in articles 34 and 35 of the Royal Decree mentioned (e.g., it must contain the final resolution in which is based). The examination made by the Land Registrar will extend to the same aspects as said before, as for the judicial part of the document, and also to the fulfilment of the requirements established in the articles mentioned.

Finally, when, in the course of the proceeding, an annotation in relation with the proceeding has been made (a freezing order, a prohibition of disposal), the Criminal Judge, or the ORGA has to issue an order to the Registry so that this annotation is cancelled together, when necessary, with any subsequent entries made in the property. However, if no annotation has been made, and the first document that is presented in the Registry is the Confiscation order, the final resolution must reflect that the owner of any right or encumbrance over the property has been part of the proceeding.

Part 3. National land registry experience

Freezing and confiscation orders are frequently entered into the land books. They are common in criminal procedures related with antimony laundering, assets concealment crime and in general economic crimes.
An issue that usually requires special attention in the examination made by the Registrar of this kind of orders, is that the resolution must clearly specify the effects that the judicial measure pursues, mainly in relation with the limitations of disposal.
Finally, the most difficult approach is to enter the notice in those cases that the land registry owner is not the defendant, because the judge must show its suspiciousness in the order issued.