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House of Commons Select Affairs Committee Report on Proceeds of Crime

Today (Friday 15th July), the House of Commons Home Affairs Select Committee published its fifth report on the recovery of criminal proceeds under the Proceeds of Crime Act 2002 (POCA).

Having contributed to the inquiry via written and oral submissions, Jonathan Fisher QC’s evidence was relied upon in respect of a number of key elements, including how criminal benefit is investigated and recovered, and the susceptibility of the UK (particularly London) to complex forms of money laundering.

In regard to the startling £1.61 billion debt reportedly outstanding from confiscation orders, Jonathan Fisher QC noted (at [68] of the report) that the figure is likely to be inflated. This is due to the approach the courts must take to confiscation orders when defendants fail to engage with proceedings:

‘In many cases, when quantifying the benefit figure, a court is required to assume that all a defendant’s income and expenditure in the past six years has been criminally obtained. A connection between this money and the commission of a particular criminal offence does not need to be established. Instead, the burden rests with a defendant to show that the assumption is incorrect. Leaving aside moral arguments for and against making this assumption, the practical effect is to increase the benefit figure when quantifying the confiscation order.’

In response to these issues and more, the Committee makes a number of wide-reaching recommendations aimed at improving the recovery of the proceeds of crime and making it more effective, including:

  • Initiating asset freezing at the earliest stages of an investigation;
  • A new ‘confiscation court’, where ‘one judge could deal with the financial aspect of a serious and/or complex case from cradle to grave’;
  • Granting the courts power to compel defendants to attend at a confiscation hearing;
  • A new separate criminal offence of non-payment of a confiscation order, including the imposition of travel restrictions on those subject to a confiscation order;
  • Greater coordination and collaboration between law enforcement and the private sector to improve asset recovery, including the private enforcement and collection of unpaid confiscation orders that enter arrears;
  • A new, more robust, system for handling Suspicious Activity Reports.

You can read the press release here and the full report here.

Jonathan Fisher QC, Visiting Professor in Practice, LSE, and Barrister, Devereux Chambers, is ranked in Band I as one the UK’s leading financial crime and proceeds of crime specialists.

Jonathan can be contacted to discuss any of the issues raised in the report at fisher@devchambers.co.uk.

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The views expressed in this article represent those of the author and not Bright Line Law.

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