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Criminal Finances Act 2017

Annex B – POCA Summary

  1. The Proceeds of Crime Act 2002 (POCA) was introduced to provide new, extensive powers to trace and recover criminal assets.
  2. POCA provides four main routes for the recovery of assets:
    1. criminal confiscation (post-conviction);
    2. civil Recovery (used where no conviction has taken place);
    3. cash seizure and forfeiture; and
    4. taxation.
  3. Criminal confiscation is the most commonly used power. POCA also provides powers to restrain assets which are suspected to derive from criminal conduct. A brief description of these powers appears below.

Confiscation

  1. Confiscation orders are made following conviction for an offence. A confiscation order does not provide for the confiscation of particular property, but rather orders the defendant to pay a set amount of money, calculated by reference to the criminal benefit and whatever resources are available to him or her. The defendant is given a set time to pay the order after which he or she is liable for interest and may be subject to a default sentence for failing to pay. Before making an order, the court must be satisfied that the defendant has benefited from criminality and must determine the extent to which he/she has benefited.

Restraint

  1. Restraint orders prevent a person subject to a criminal investigation or criminal proceedings dealing with any realisable property (e.g.by freezing a bank account) to prevent the dissipation of assets that may be subject to a confiscation order. Restrained assets may be used to satisfy a confiscation order or returned to the individual(s). Even if they are returned they can still have a disruptive effect as the criminals are deprived of those funds while they are restrained.

Civil Recovery

  1. This permits the recovery of criminal assets where no conviction has been possible, for example because individuals avoided conviction because they were remote from the crimes committed (but nonetheless benefited – e.g. a drugs lord) or fled abroad.

Cash Forfeiture

  1. Cash over £1,000 can be seized if it is suspected to be unlawful in origin, or to be intended for use in unlawful conduct. These are civil proceedings, and it is not necessary to arrest the person carrying the cash. Cash can be detained for a maximum period of two years while its origin and purpose are investigated. Ultimately the cash is either given back or forfeited at a magistrates’ court or (if certain conditions are met) administratively. Once forfeited it is brought to account and paid into a central fund.

Revenue Functions

  1. The NCA has revenue functions under POCA which enables them to make a tax assessment where the source of income cannot be identified but are suspected to be criminal assets. These powers are separate from those of HMRC.
  2. POCA also provides for a number of investigative powers, such as search and seizure, and powers to apply for production orders and disclosure orders.
  3. POCA remains an effective piece of legislation, but it is subject to sustained legal challenge from criminals seeking to avoid its reach and frustrate asset recovery.
  4. In October 2015, the Government published the National Risk Assessment for Money Laundering and Terrorist Financing. This identified a number of risks and areas which required a strengthening of the response to criminal finances. The Action Plan for anti-money laundering and counter-terrorist finance, published in April 2016, sets out the action needed to strengthen the UK’s anti-money laundering and terrorist financing regime. The Criminal Finances Act gives effect to key elements of the Action Plan.

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