What The Criminal Finances Bill Means For Asset Seizure And Forfeiture

Syedur Rahman and Nicola Sharp examine the changes likely
when the Criminal Finances Bill becomes law.

The authorities have often found it difficult to seize and
forfeit assets that they suspect to be the proceeds of crime.

Seizing cash, however, has not been too problematic. Under
the Proceeds of Crime Act 2002 (POCA), law enforcement agencies have had the
power to seize money if they have reasonable grounds for suspecting that it is
the proceeds of crime.

It is a power that the authorities have been able to use
extensively; leading to it even being described as draconian by some critics.
Certainly, anyone faced with having their money seized can face huge
difficulties in holding on to it.

Assets

The problems that have been encountered by the authorities
regarding seizure and forfeiture have come when any suspected proceeds of crime
have been turned into assets other than cash. Existing law gave the authorities
few options other than to go after the money.

This problem faced by the authorities, however, now looks
set to disappear. The Criminal Finances Bill 2017 gives the authorities the ability
to locate, seize and forfeit valuable items other than cash. A whole new range
of assets could be the subject of seizure or forfeiture if the Bill, as
expected, becomes law.

Gems and precious metals, items of jewellery and watches,
works of art and items that represent monetary value, such as gift vouchers and
even gambling chips, could all be seized or forfeited if the Bill passes
through Parliament. The authorities have convinced the law makers that such
items should all be considered moveable assets: objects that someone buys with
the cash proceeds of crime in order to disguise and relocate their criminal
income.

Under the terms of
the Bill, any such items that are subject to seizure must have a value of
£1,000 or more. As with current cash seizures, any attempt to seize such items
must be subject to oversight by the courts and the authorities will have to
show that they have reasonable grounds to suspect that the items are the
proceeds of crime.

Complex

One major issue that the authorities may have to overcome
when looking to seize such items is the question of ownership. With cash
seizures, the process of linking the money to the person can be relatively
straightforward.

When it comes to other assets, issues such as establishing a
person’s ownership and complications regarding joint or third party ownership
can make it more difficult to establish a link between that property and
alleged criminal activity.

This has been acknowledged by the Bill: it states that if
someone has a lawful, legitimate interest in the property that is the subject
of an attempted seizure, the
seizing authority could possibly find themselves in a position whereby they
could have to pay the third party for their stake in the asset. But
while, on paper, this seems a logical approach, this principle will surely be
immensely difficult to apply. Reaching agreement on the amount a person should
be compensated for their stake in a seized item could prove a lengthy legal
exercise in its own right.

Such problems could, arguably, dissuade the authorities from
pursuing any seizure where there is possible third party involvement.

Bank Accounts

The Bill also gives the authorities greater civil recovery
powers regarding the freezing of bank accounts. They can currently be frozen by courts at the request of the likes of the Serious
Fraud Office (SFO), Crown Prosecution Service (CPS) and the National Crime
Agency (NCA).

Under the terms of the Bill, the minimum amount that can be
subject to freezing is £1,000. In addition, HM Revenue and Customs (HMRC) and
the Financial Conduct Authority (FCA) will join the SFO, CPA and NCA in being able to request that courts freeze bank accounts.

UWO’s

Going hand in hand with the ability to freeze bank accounts
is the Bill’s introduction of unexplained wealth orders (UWO’s). Imposing a UWO
on someone who cannot provide proof that they obtained their assets legally is
a huge step when it comes to seizure.

A UWO requires a person to explain the source of the wealth
that enabled them to have, for example, a million pound in the bank or a
handful of expensive properties. Failing to respond to the Order or giving an
inadequate response to it will see the authorities use existing POCA civil
recovery procedures to take those assets off the person.

An important point to note here is that neither criminal nor
civil proceedings need to have started for a UWO to be put in place. For a UWO
to be brought, it is merely enough for the authorities to have reasonable
grounds to suspect an individual is involved in serious crime.

Such measures are the reason why the Bill is being viewed as
a major boost to the authorities’ powers when it comes to seizure and
forfeiture.

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