Proceeds of Crime guidance
Principle
The confiscation regime prior to the Proceeds of Crime Act 2002
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 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 Confiscation and ancillary orders - pre-POCA, elsewhere in this guidance.
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's structure as it impacts on CPS
Role of the Assets Recovery Agency (ARA)
Part 1 creates the Assets Recovery Agency and a Director. ARA is given a role in criminal restraint and confiscation proceedings, in addition to training financial investigators. ARA is primarily concerned with the civil forfeiture of the proceeds of crime and the Director may exercise revenue powers in place of civil forfeiture. In some cases ARA may require confirmation from the CPS that a prosecution cannot be pursued before commencing civil forfeiture proceedings. ARA may conduct criminal restraint and confiscation proceedings whilst CPS is prosecuting a case, provided that certain criteria are met. Disclosure and other issues are likely to be the subject of a protocol between ARA and the CPS.
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. A recent amendment to POCA by the Serious Organised Crime & Police Act 2006 will allow magistrates' courts to make low value confiscation orders up to £10,000 in simple cases but complex and/or high value applications for confiscation orders will still have to be committed to the Crown Court on the application of the prosecutor. Area prosecutors should henceforth expect to deal with restraint and confiscation issues and applications on a regular basis.
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 provided on this topic.
POCA Part 8 - Investigative powers
Part 8 of POCA provides financial investigation officers (FIOs) 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. Please refer to legal guidance chapter on this topic.
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. A copy of the SLA together with a draft local protocol is annexed to this guidance.
Early advice
Prosecutors should refer to the SLA and their local protocol with the police for specific details, however, Areas will be expected to provide early advice to the police concerning the investigation, preservation of assets, obtaining and enforcement of confiscation orders and confiscation matters generally and will make restraint and confiscation applications to the Crown Court on behalf of the police.
The CPS is unable to appear on behalf of the police at cash seizure hearings due to their civil nature and will also not make applications to Court under Part 8 (the investigative powers) unless there is specific agreement as to costs.
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.
Prosecutors should also have regard to the guidance in the Attorney General's Guidelines on the Acceptance of Pleas.
Disclosure issues
Prosecutors will need to ensure that all material is reviewed in accordance with the duties imposed by the Criminal Procedure and Investigations Act 1996 (CPIA), whether that material is in a separate restraint and/or confiscation file, or with ARA.
Differential disclosure
Problems may arise in cases involving co-defendants. Information disclosed by one defendant to the Court in respect of restraint and/or confiscation might only be disclosable to a co-defendant with leave of the Court.
Prosecutors should refer to Chapter 21 of the Disclosure Manual,elsewhere in this guidance, regarding the disclosure of unused material created in the case of financial investigations.
Prosecution appeals
POCA provides the prosecutor with the right to appeal in a number of circumstances:
- Confiscation
- Section 31(1) to the Court of Appeal where the Crown Court has made an order;
- Section 31(2) to the Court of Appeal where the Crown Court has refused to make an order; and
- Section 33 (2) (a) to the House of Lords of the decision of the Court of Appeal where the prosecutor appealed the original decision of the Crown Court.
- Restraint
- Section 43(1) to the Court of Appeal where the Crown Court has refused to make an order;
- Section 43(2) (a) to the Court of Appeal where the Crown Court has made an order; and
- Section 44 (2) to the House of Lords of the decision of the Court of Appeal.
- Management and Enforcement Receivership
- Section 65 (1) to the Court of Appeal in respect of the refusal of the Crown Court to appoint and/or give powers to a management or enforcement receiver;
- Section 65 (2) (a) to the Court of Appeal in respect of an order made by the Crown Court to appoint and/or to give powers to a management or enforcement receiver;
- Section 65 (3) to the Court of Appeal where on a further application by the prosecutor, the Crown Court refuses to make an order;
- Section 65 (4) to the Court of Appeal where on a further application the Crown Court has made an order; and
- Section 66 to the House of Lords in respect of a decision of the Court of Appeal.
The appeal procedure may be found in a combination of the Criminal Procedure Rules and in the Proceeds of Crime Act 2002 (Appeals under Part 2) Order 2003 (SI 2003 No. 82).
Notice of an appeal will need to be served within twenty-eight days in respect of confiscation appeals and fourteen days in respect of restraint and receivership appeals. Leave will be required from the court to which the appeal is made. Clearly, there are resource and other implications for the CPS if unworthy appeals are pursued and prosecutors should seek advice from the Proceeds of Crime Delivery Unit at Headquarters and refer likely cases to a level E or head of unit for decision.
In addition to the above, the right to appeal is also given to persons affected by an order of the court in respect of a refusal to vary or discharge a restraint order and in respect of receivership orders. The defendant may appeal to the House of Lords in respect of a decision of the Court of Appeal made pursuant to an appeal by the prosecutor or the Director of ARA in respect of the making or the refusal to make a confiscation order. POCA is likely to be a very fruitful source of appeals.
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.
Process maps
The National Best Practice Guide to Confiscation Order Enforcement (Revised April 2005) provides an overview of the procedures involved in restraint, confiscation and enforcement (see further information below). Prosecutors and Caseworkers are encouraged to study the process maps and to become familiar with the new procedures.
File keeping
POCA work requires careful file handling. Areas are encouraged to create a confiscation sub-file with three distinct bundles of documents, each held together with a treasury tag. The three bundles should be composed of:
- Court orders, variations and statements in support;
- Correspondence;
- Briefs to counsel.
The file should also have a front sheet setting out a list of the orders within the file and the dates on which they were made.
Implementation dates
The Proceeds of Crime Act received Royal Assent on 31st July 2002, but is being brought into effect in stages.
| PART | COMMENCEMENT DATE | COMMENT |
|---|---|---|
| 1 | 24 February 2003 | Established ARA |
| 2 | 24 March 2003 | Confiscation and restraint provisions |
| 5 | 30 December 2002 | Cash seizure |
| 7 | 24 February 2003 | Money laundering |
| 9 | 24 February 2003 | Investigations |
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. TIC's do not affect the choice of legislation and may date before or after the commencement of POCA. Please refer to the table of transitional provisions below.
Reference should be made to the case of Sekhon [2002] EWCA Crim 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.
Restraint applications should be made to the High Court when the confiscation order is likely to be made under the previous legislation.
The CU, OCD (formerly called the CCB) will continue to deal with pre-POCA applications, if they meet their criteria and will continue to provide advice to the Areas in all cases. Reference should also be made to the Legal Guidance chapter relating to the previous legislation (see link below).
Further information: Table of transitional provisions
Parts 2 and 4 of the Proceeds of Crime Act 2002
Applying for a confiscation order
| When did the offence or any of the offences for which the defendant has been convicted begin? | Under what legislation can you apply for a confiscation order? |
|---|---|
| Before 24 March 2003 | Pre POCA legislation (eg DTA and CJA) |
| On or after 24 March 2003 | POCA |
| A mix of before 24 March 2003 and on or after that date | Pre-POCA legislation will usually apply for all offence(s) |
Applying for a restraint order
| When did the alleged offence or any of the alleged offences being investigated or for which proceedings have started begin? | Under what legislation can you apply for a restraint order? |
|---|---|
| Before 24 March 2003 | Pre POCA legislation (eg DTA and CJA) |
| On or after 24 March 2003 | POCA |
| A mix of before 24 March 2003 and on or after that date | Application should usually be made in the High Court when there is likely to be a pre-POCA confiscation order. |
Determining benefit from criminal conduct
| Type of conduct involved | Can offences committed before 24.03.03 be relevant to deciding whether the defendant has a criminal lifestyle? | Can the benefit of offences committed before 24.03.03 be taken into account when deciding whether the benefit reaches the £5000 threshold in s 75(4)? |
|---|---|---|
| Particular criminal conduct | Not applicable. (If the offence is before 24.03.03 POCA does not apply). Also note that benefit from any offences taken into consideration in sentencing for current offence(s) does not count. | Not applicable. £5,000 threshold applies only to certain of the criminal lifestyle tests. |
| At least two previous convictions on separate occasions over last six years (s 75(3)(b)) | If the current offence(s) all began on or after 24.03.03, POCA applies. | Benefit from previous offences and any further offences taken into consideration in sentencing for current offence(s) under s 75(5)(c)) all count. |
| Offence committed over a period of at least six months (s 75(2)(c)) | Not applicable. (If the offence begins before 24.03.03, POCA does not apply) | Benefit from any offences committed before 24.03.03 taken into consideration in sentencing for current offence(s) (under s 75(6)(b)) does not count. |
| Convicted of four plus offences in current proceedings (s 75(2)(a)) | All of the offences must have been committed on or after 24.03.03. | Benefit from any offences committed before 24.03.03 taken into consideration in sentencing for current offence(s) (under s 75(5)(c)) does not count. |
| Lifestyle offence (eg drug trafficking) (s 75(2)(a)) | Not applicable. (If the offence is before 24.03.03 POCA does not apply) | £5000 threshold does not apply to this criminal lifestyle test. |
Useful references
Confiscation and ancillary orders - pre-POCA, elsewhere in this guidance
Role of the Crown Prosecution Service, elsewhere in this guidance
Code for Crown Prosecutors
Sekhon [2002] EWCA Crim 2954
Chapter 21 of the Disclosure Manual, elsewhere in this guidance
Sekhon [2002] EWCA Crim 2954
Best Practice Guide to Confiscation Order Enforcement (Revised April 2005)
Disclosure and covert law enforcement, elsewhere in this guidance
Money laundering offences, elsewhere in this guidance
www.homeoffice.gov.uk/crimpol/oic/proceeds/index.html