Chapter 3: Recovery of cash in summary proceedings
Sections 289-291: Searches; Prior approval; Report on exercise of powers
403.Section 289 is necessary in order to support the powers to seize cash that is the proceeds of unlawful conduct or intended for use in such conduct (section 294). These new search powers will not be exercisable unless the suspect cash is thought to exceed the threshold set under section 303. In chapter 3, cash has the meaning attributed to it in section 289(6) and (7).
404.The search powers will only be exercisable on private premises where the constable or customs officer has lawful authority to be present. In respect of a constable, this would be where he is exercising his powers of entry under the Police and Criminal Evidence Act 1984 and in respect of a customs officer where he is exercising such powers under the Customs and Excise Management Act 1979 or other enactment. In Scotland a constable or a customs officer would be exercising their powers of entry under common law or under a statutory warrant. An officer could also be lawfully present on private premises, if he is there at the invitation of the owner. By virtue of subsection (5)(b), a customs officer may only exercise the powers if he has reasonable grounds for suspecting that the unlawful conduct relates to an assigned matter within the meaning of the Customs and Excise Management Act 1979. This would cover such conduct as drug trafficking, money laundering and excise evasion.
405.By virtue of subsection (3)(b), the search powers include the powers to search a person. However, this power does not extend to requiring a person to undergo an intimate or strip search (subsection (8)).
406.Section 290 provides the safeguard that the search powers in section 289 may only be exercised where prior judicial authority has been obtained or, if that is not practicable, with the approval of a senior officer. Section 290(1) also recognises that there may be circumstances where it may not even be possible for a constable or a customs officer to obtain the approval of a senior officer. If judicial approval is not obtained prior to a search, and cash is either not seized or is released before the matter comes before a court, the constable or customs officer concerned must prepare a written report and submit it to an independent person appointed by the Secretary of State in relation to England and Wales and Northern Ireland and, in relation to Scotland, by the Scottish Ministers (subsection (8)). This report will detail why the constable or customs officer considered that he had the power to carry out the search and why it was not practicable to obtain judicial approval of the search.
407.Section 291 provides that the person to whom the reports are submitted is under an obligation to submit an annual report to the Secretary of State (or the Scottish Ministers in Scotland) drawing general conclusions about the matters reported to him, making any appropriate recommendations. This report will be laid before Parliament (or the Scottish Parliament as appropriate) and be published.
Sections 292-293: Code of practice; Code of practice: Scotland
408.In recognition of the sensitivity of search powers, section 292 requires the Secretary of State to publish a Code of Practice setting out how the powers in section 289 are to be exercised by a constable or customs officer. There will be a separate code of practice for constables in Scotland, issued by the Scottish Ministers; see section 293.
Seizure and detention
Section 294: Seizure of cash
409.Chapter 3 expands and replaces the scheme set out in Part II of the Drug Trafficking Act 1994 which provides for the seizure and forfeiture of cash which is being imported into or exported from the United Kingdom, and which represents the proceeds of, or is intended for use in, drug trafficking. This scheme is expanded to include cash related to all unlawful conduct and also provides for the seizure of such cash inland. Section 294 enables a customs officer or a constable to seize cash at the borders or inland if he has reasonable grounds for suspecting that the cash is recoverable property or intended for use in unlawful conduct. Subsection (2) allows for the seizure of indivisible cash only part of which is under suspicion. An example of this is a single cheque of £50,000 where the cash under suspicion is only £25,000. Section 296(2) provides that when such cash can be divided on payment into an interest bearing account, the part not under suspicion must be released.
410.Section 289(6) and (7) defines cash for the purposes of Chapter 3 and enables the Secretary of State following consultation with Scottish Ministers to prescribe by order other monetary instruments. Such monetary instruments must be of a kind that can be paid into an interest bearing account, so as to comply with the requirements of section 296. In order to guard against excessive and disproportionate use of the power, there is to be a threshold below which the powers will not be available; this is specified in an order under section 303. A definition of unlawful conduct is to be found in section 241, and of recoverable property at section 304 to 310.
Sections 295-296: Detention of seized cash; Interest
411.The effect of section 295 is that cash may not be detained for more than 48 hours except by order of a magistrate (or a sheriff in Scotland). A magistrate may make such an order if satisfied that there are reasonable grounds for the officer’s suspicion and that the continued detention is justified for the purposes of investigating its origin or intended use. The magistrate may also make an order for continued detention if consideration is being given to the bringing of criminal proceedings, or if such proceedings have been commenced and not concluded. Monies detained would in most cases be paid into an interest bearing account as provided in section 296 pending the outcome of proceedings.
Section 297: Release of detained cash
412.Section 297 envisages two situations in which cash or any part of the cash may be released to the person from whom it was seized. Firstly, the magistrates’ court (or a sheriff in Scotland) may do so in response to an application by the person from whom the cash was seized on the grounds that it is not recoverable property and is not intended for use in unlawful conduct. The fact that only the person from whom the money is seized may apply to the court is intended to prevent the magistrates’ court from becoming embroiled in a dispute between the person from whom the cash was seized and the rightful owner of the cash. Secondly, a customs officer, a constable or (in Scotland) a procurator fiscal, may release cash or any part of it after notifying the justice, magistrates’ court or sheriff if satisfied that the detention can no longer be justified.
Forfeiture
Section 298: Forfeiture
413.Section 298 enables the magistrates’ court (or, in Scotland, the sheriff) to order the forfeiture of cash or any part of it if satisfied that it is recoverable property or is intended for use in unlawful conduct. The balance of probabilities is the evidential standard that applies to the proceedings, this being the normal civil standard of proof (section 241(3)).
414.Where the cash is recoverable property belonging to joint tenants, one of whom falls within the definition in section 270(4), the court must not forfeit the cash that it thinks attributable to the “innocent” partner’s share. An example of this might be a joint bank account into which drug trafficking proceeds (dirty money) has been paid by one signatory and clean money by the other. If the former withdraws all the cash and it is subsequently seized, the court must then distinguish between the clean and dirty money. The court may then return to the “innocent” partner his share of the money.
415.Subsection (4) provides that cash cannot be released under any circumstance once an application for the forfeiture of that cash is made, until such time as forfeiture proceedings have concluded.
Supplementary
Section 301: Victims and other owners
416.Section 301 allows the true owner of detained cash to apply for its release. Two cases are provided for. Subsection (3) relates to a person who claims that some or all of the cash rightfully belongs to him, and he was deprived of it through unlawful conduct. An example of this would be a person who claims that the cash was stolen from him. If the court is satisfied, it may order the applicant’s cash to be released to him.
417.Subsection (4) relates to the case of any other true owner who is not the person from whom the cash was seized. Here, if the court is satisfied, the cash may be released – but only if the person from whom it was seized does not object. That proviso is intended to prevent the court from becoming involved in a complicated ownership dispute between the person from whom the cash was seized and the rightful owner of the cash. Unlike subsection (3) the court will have to be satisfied that the cash is not recoverable property or intended for use in unlawful conduct before it can release to a claimed owner.
Section 302: Compensation
418.Section 302 provides that where no forfeiture is made following the detention of cash the person from whom it was seized, or the person to whom the cash belongs, may apply to the court for compensation. In most cases, it is thought that the interest that will have accrued from the deposit of the cash into an interest-bearing account as provided in section 296 will suffice. If, after 48 hours, cash has not been paid into such an account, then by virtue of subsections (2) and (3) the court may order the payment of compensation to the value of the lost interest. Subsections (4) and (5) also give the court further discretion to order the payment of reasonable compensation where loss has occurred as a result of the detention of the cash (even taking into account interest and compensation otherwise payable) and where the circumstances are exceptional. This section only applies to compensation for loss incurred as a result of the detention of the cash; if an individual has suffered loss for any other reason, this must be pursued elsewhere.
Section 303: "The minimum amount"
419.The current level in respect of the forfeiture of drug-related cash on import or export under the Drug Trafficking Act 1994 is £10,000 or more and the Government intends that the same level should be imposed in respect of this scheme.
