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Proceeds of crime - The confiscation regime prior to the Proceeds of Crime Act 2002

Sunday, February 9, 2003

Prior to Part 2 of the Proceeds of Crime Act 2002 (POCA) coming into force on 24 March 2003, the Drug Trafficking Act 1994 (DTA) and Part VI of the Criminal Justice Act 1988 (CJA) as amended by the Proceeds of Crime Act 1995 gave the Crown Court power to make confiscation orders and also gave the Magistrates' Court a limited power of confiscation. Please refer to the Legal Guidance section Proceeds of Crime Confiscation and Ancillary Orders pre-POCA.

The prosecutor could apply to the High Court to preserve the defendant's assets where proceedings had been instituted or the defendant was to be charged, or an application in respect of further confiscation proceedings had been made or was to be.

If the defendant did not pay the confiscation order voluntarily, then either the Magistrates' Court enforced the order as if it were a fine or the prosecutor could apply to the High Court to appoint a receiver. This regime continues for proceedings in which an offence was committed before the 24 March 2003 commencement date in respect of which an application for confiscation is to be made.

The drivers behind the formulation of POCA

In October 1998, the Prime Minister tasked the Performance & Innovation Unit (PIU) of the Cabinet Office with examining asset recovery arrangements with a view to improving the efficiency of the recovery process and increasing the amount of illegally obtained assets recovered. The PIU report was published by the government in June 2000 with a number of legislative and other proposals, which included the consolidation of existing laws on confiscation and money laundering into a single piece of legislation.

POCA received royal assent on 31 July 2002 and it seeks to implement the PIU proposals. The Act is in twelve parts and will be brought into effect in stages. Prosecutors will mainly be concerned with Part 2 of the Act, in which restraint, confiscation, receivership and related matters are covered.

POCA'structure as it impacts on CPS

POCA Part 1: Creation of the Assets Recovery Agency (ARA)

Part 1 of POCA created the Assets Recovery Agency and a Director.ARA was given a role in criminal restraint and confiscation proceedings, in addition to training financial investigators.  ARA was primarily concerned with the civil forfeiture of the proceeds of crime and the Director could exercise revenue powers in place of civil forfeiture.

The Serious Crime Act 2007, Chapter 27, Part 3, Chapter 2, Proceeds of Crime, revised the provisions of POCA 2002 with regard to ARA, which was abolished and its functions were redistributed.  Its confiscation functions ceased to exist and its civil recovery functions were transferred to the Serious Organised Crime Agency (SOCA) and prosecution authorities. SOCA also took over its Revenue functions and the power to abolish them.  Its accreditation and training functions were transferred to the National Policing Improvement Agency (NPIA).

POCA Part 2: Criminal restraint and confiscation powers

Part 2 of POCA extends the Crown Court's powers to make confiscation orders and makes the Crown Court the main venue for confiscation and related proceedings for offences committed after 23 March 2003.The High Court's power to make charging and restraint orders for offences committed after the commencement date is abolished.

POCA Part 5: Civil cash seizure powers

Part 5 of POCA introduces a new scheme for the civil seizure of cash related to all unlawful conduct and it provides for the seizure of such cash inland, unlike previous legislation, which only applied to ports. Due to the civil nature of this remedy, the CPS is unable to act on behalf of the police on the hearing of such applications Police officers have been ordered to use this new power whenever possible. These extended seizure powers became operative on 30 December 2002.

POCA Part 7: Money laundering offences

Part 7 creates new money laundering offences. For further information on these provisions, please refer to the legal guidance on Money Laundering Offences.

POCA Part 8: Investigative Powers

Part 8 of POCA provides financial investigation officers (FIO's) with new investigative powers. Prosecutors will need to be aware of these powers and to be able to advise the police on their use, but will not usually make applications to the court for such orders on behalf of the police.

Guidance

The role of the CPS

On 2 December 2002 the DPP signed a Service Level Agreement (SLA) with the Association of Chief Police Officers of England and Wales (ACPO), which is intended to serve as a general guide to co-operation between the parties on issues arising from POCA. The Agreement should be used as a basis for local protocols between Chief Crown Prosecutors and Chief Constables. These will clarify roles and responsibilities of those involved at Area/force level and set out effective working arrangements for the Act's objectives.

Choice of charge and acceptance of pleas

The Code for Crown Prosecutors advises prosecutors to select charges, which reflect the seriousness of the offending; give the court adequate sentencing powers; and enable the case to be presented in a clear and simple way. When pleas are offered, the Code states that Crown Prosecutors must bear in mind the fact that ancillary orders can be made with some offences, but not others.

In the context of proceedings where confiscation is an issue, the prosecutor needs to take particular care. The choice of charges and/or the acceptance of pleas can determine whether POCA or the earlier legislation applies to the proceedings and therefore the procedure to be adopted; whether the Defendant is deemed to have a criminal lifestyle as defined in section 75 of POCA; and ultimately whether a confiscation order can be made, and if so in what sum. Even within the same proceedings different legislation can apply to different defendants, because of the dates on which their respective provisions came into force.

In the case of Sekhon [2002] EWCA Crim 2954, the Lord Chief Justice described confiscation orders as being one of the most successful weapons, which can be used to discourage offending committed to enrich the offender. If the evidential test is satisfied in respect of offences, which allow the POCA provisions to be used by the Court to best advantage, then it will generally be in the public interest to proceed on those offences.

Procedure

The emphasis under POCA moves away from restraint being dealt with centrally by the High Court and it is the Crown Court that becomes the 'one stop shop' for all matters relating to restraint and confiscation.

The CPS handles the Proceeds of Crime work as follows:

  • CPS Areas will deal with all Proceeds of Crime work including advice to the police and application to the Crown Court for restraint, confiscation and receivership orders.

  • For an indefinite period the Confiscation Unit of the Organised Crime Division (CU, OCD) will deal with existing caseload and any applications to be made to the High Court under the Drug Trafficking Act 1994 and Criminal Justice Act 1988.

  • For an indefinite period CU, OCD will continue to provide general advice and assistance in restraint, confiscation and receivership matters.

Part 1 (Established ARA) commenced 24 February 2003

Part 2 (Confiscation and Restraint Provisions) commenced 24 March 2003

Part 5 (Cash Seizure) commenced 30 December 2002

Part 7 (Money Laundering) commenced 24 February 2003

Part 8 (Investigations) commenced 24 February 2003

Transitional Provisions

If any of the offences in the proceedings in respect of which confiscation is sought pre-date 24 March 2003, the Drug Trafficking Act 1994 (DTA) and Part VI of the Criminal Justice Act 1988 (as amended by the Proceeds of Crime Act 1995 if the offences of which the accused is convicted were committed on or after 1 November 1995) continue to apply. TICS do not affect the choice of legislation and may date before or after the commencement of POCA.

Reference should be made to the case of Sekhon [2002] EWCA Crime 2954 in which the difficulties and procedural technicalities that can arise under the pre-POCA legislation in relation to commencement dates, notices and postponement are highlighted.

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