The Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005

Explanatory Note

(This note is not part of the Order)

Parts 2, 3, 4 and 5 of this Order make provision in respect of external requests, within the meaning of section 447(1) of the Proceeds of Crime Act 2002 (“the 2002 Act”), and external orders, within the meaning of section 447(2) of that Act, which broadly corresponds with Parts 2, 3, 4 and 5 of that Act, respectively.

Chapter 1 of Part 2 makes provisions for prohibitions (“restraint orders”) on dealing with property, situated in England and Wales, which is specified in a request by an overseas authority (“an external request”). In order to exercise the powers in article 8 to make a restraint order in respect of relevant property (within the meaning of section 447(7) of the 2002 Act) that is so specified, the Crown Court must be satisfied that either of the conditions set out in article 7 is satisfied. The first condition includes the requirement that a criminal investigation has been started in the country from which the external request was made with regard to an offence. The second condition includes the requirement that proceedings for an offence have been started in the country from which the external request was made and not concluded. The organisations responsible for applying to the Crown Court are those set out in article 6(1) and (3).

Articles 9 to 14 make supplementary provision about the making of restraint orders, including provision for appeals relating to them. Articles 15 and 16 provide for the appointment and powers of receivers in respect of property subject to restraint orders.

Chapter 2 of Part 2 makes provision for the registration of external orders, within the meaning of section 447(2) of the 2002 Act, which arise from a criminal conviction in the country from which the order was sent and concern relevant property (within the meaning of section 447(7) of that Act) in England and Wales. An application for registration is to be made by the organisations listed in article 18(1) and (3). All of the conditions set out in article 21 must be satisfied if the Crown Court is to give effect to the external order by registering it. Where the conditions are satisfied, the Court must register the external order (see articles 21(1) and 22(1)). Articles 23 and 24 provide for appeals and articles 25 and 26 make provision for external orders which specify sums of money. Article 37 sets out the circumstances when a registered external order is to be taken as satisfied.

Article 27 provides for the appointment of enforcement receivers by the Director of Public Prosecutions, Director of Revenue and Customs Prosecutions and Director of the Serious Fraud Office. In common with section 52 of the 2002 Act, article 30 sets out a different procedure for the appointment of receivers of the Director of the Assets Recovery Agency. The powers of receivers differ depending on whether the external order specified a sum of money for recovery or specified property other than money. In the former case, the receiver’s powers under articles 28 and 31 are in respect of recoverable property (as defined by article 49(1)). In the latter case, their powers under articles 29 and 32 are in respect of the property specified in the registered external order. Articles 33 to 36 concern the application of money recovered by receivers. Articles 38 and 39 impose restrictions on actions by persons other than receivers on property that is realisable property or is property specified in a registered external order.

Chapter 3 of Part 2 (articles 39 to 48) makes further provision about receivers. This includes provision protecting the receiver in respect of things done by him (article 40) and the discharge and variation of orders affecting receivers (articles 44 and 45). Articles 47 and 48 provide for the procedure on appeals to the Court of Appeal and the House of Lords under Part 2.

Chapter 4 of Part 2 (articles 49 to 55) provides for interpretation.

Part 3 makes provision broadly equivalent to Part 2 in relation to external requests and external orders relative to property situated in Scotland.

Under Chapter 1, applications for restraint orders are to be made to the Court of Session by the Lord Advocate. The conditions for the grant of a restraint order and the applicable procedure are provided for in articles 57 to 60, 64 and 65, in line with the provisions of Chapter 1 of Part 2. Articles 61 and 62 allow the court to grant warrant for inhibition against any person specified in a restraint order or for arrestment in relation to moveable property to which the order applies. Article 63 provides for the appointment of management administrators in respect of property subject to restraint orders.

Chapter 2 provides for applications for registration of external orders to be made to the Court of Session by the Lord Advocate. The conditions and procedure for registration are set out in articles 68 to 72, in line with the provisions of Chapter 2 of Part 2. Articles 73 to 75 provide for the appointment of enforcement administrators and set out the powers of those administrators. Article 76 provides that, where the external order specifies a sum of money and the court confers power on the receiver in respect of the offender’s family home, the administrator must obtain the contents specified in that article or the authority of the court before disposing of any right or interest in the family home.

Chapter 3 and Schedule 1 make further provision about administrators appointed under Chapters 1 and 2.

Part 4 makes provision in relation to Northern Ireland equivalent to that made by Part 2 for England and Wales, except that (like Part 4 of the 2002 Act) there is no provision about hearsay equivalent to article 13.

Part 5 of this Order has effect for the purpose of enabling the enforcement authority to realise recoverable property (within the meaning of article 202) in civil proceedings for the purpose of giving effect to an external order (within the meaning of section 447(2) of the Act). Except in Scotland, the enforcement authority is defined by article 213(1) as the Director of the Assets Recovery Agency and the proceedings are before the High Court (article 142(2)). In Scotland, the enforcement authority is defined by article 213(1) as the Scottish Ministers and the proceedings are before the Court of Session.

Article 177 provides for recovery orders. The enforcement authority may take proceedings against any person who the authority believes holds recoverable property (as defined by article 202) pursuant to the registration of an external order under article 177. The court is required by article 177(1) to make a determination whether any property or sum of money which is specified in the external order is recoverable property. In making such a determination, the court must have regard to the definitions in subsections (2), (4), (5), (6) and (10) of section 447 of the Act and articles 202 to 207, together with Schedule 5, which provide for the meaning of “recoverable property” (article 177(2)).

Where the enforcement authority in England, Wales or Northern Ireland may take proceedings for a recovery order pursuant to the registration of an external order in the High Court, it may apply to the court for a property freezing order (article 147(1)) or for an interim receiving order (article 151(1)), whether before or after starting the proceedings. Articles 147 to 150 make provision for property freezing orders under this Order equivalent to that made for such orders under sections 245A to 245D of the Act (as inserted by section 98(1) of the Serious Organised Crime and Police Act 2005 (c. 15)). Articles 151 to 160, together with Schedule 2, make provision about interim receiving orders under this Order equivalent to that made for such orders under sections 246 to 255 of the Act, together with Schedule 6. The equivalent orders in Scotland are prohibitory property orders (for which articles 161 to 166 make provision) and interim authorisation orders (for which articles 167 to 176 make provision), respectively.

A recovery order must vest the recoverable property in the trustee for civil recovery (article 177(3)). Article 178 and Schedule 3 make provision for the functions of such a trustee. Articles 181 to 183 make provision for associated property (as defined by article 146) and property held jointly which is also recoverable property. Articles 184 to 190, together with Schedule 4, make provision for recoverable property consisting of rights under a pension scheme.

Article 191 provides for the application of realised proceeds which are recovered under a recovery order. Articles 198 and 199 make provision about legal expenses which is equivalent to sections 286A and 286B of the Act (as inserted by Schedule 6 to the Serious Organised Crime and Police Act 2005).