The UK has many law enforcement agencies employed to investigate and prosecute individuals and organisations engaged in investment fraud, money laundering or other financial crimes.
Once the perpetrators of financial crime have been brought to justice and a conviction secured, what remedial options are then available to Enforcement Authorities* to recover the proceeds of crime.
At present the two key pieces of legislation or statutory powers available to UK enforcement agencies are found under the Criminal Finances Act and the Proceeds of Crime Act.
Proceeds of Crime Act (POCA)
The Proceeds of Crime Act (POCA) was introduced in 2002 to give law enforcement agencies the legislative framework to recover and confiscate money or other assets illegally obtained by convicted criminals during the course of their crimes.
POCA also allows for the “restraint” or “freezing” of those assets to prevent the disposal or dissipation of those assets before a Confiscation Order can be made.
In addition, POCA also provides for alternative ways of recovering the proceeds of crime which do not require a conviction; for example, civil recovery or cash seizure.
The objective of POCA and asset recovery schemes is to recover the proceeds of crime, deprive criminals of the use of their assets and disrupt their criminal activities.
POCA: Confiscation Orders
A Confiscation Order can be requested by the prosecution under POCA where a defendant has been convicted of an ‘acquisitive’ offence in the Crown Court and as a consequence has benefited from that crime. An acquisitive offence is one that makes money such as fraud, theft or drug dealing.
A Confiscation Order is a demand for repayment of an amount of money that the court determines has been made from committing the crime. The order is not attached to a specific property; however, the court can require a defendant to sell assets or other possessions, to settle the order, even if these assets have been acquired legitimately.
If the conviction has been secured as a result of Money Laundering, the court can decide that the defendant has a ‘criminal lifestyle.’ Therefore, the court will assume that any property acquired or money made during the preceding six years has come from crime, unless the defendant can prove otherwise.
Where a defendant fails to pay the Confiscation Order, they may be subject to a default sentence (extended prison time) or a receiver can be appointed to manage the restrained assets or to enforce the order.
POCA: Forfeiture Orders
Whereas a Confiscation Order is an order to repay a specified amount of money, a Forfeiture Order deprives a defendant of the major part of his assets (specified title to property) and is considered much more punitive.
POCA: Civil Recovery
Where it has not been possible to secure a conviction for a financial crime – perhaps the suspect has fled abroad and evaded justice – POCA also allows recovery of criminal assets (including property and cash seizures) through civil proceedings.
Civil recovery applications are made in the High Court against property that has been obtained through unlawful conduct. The relevant enforcement authority can make an application for an asset freezing order to prohibit any person from dealing with the assets (or property).
Criminal Finances Act
To learn about the Criminal Finances Act please click here.
*Full list of Enforcement Authorities
- the National Crime Agency
- HM Revenue and Customs
- the Financial Conduct Authority
- the Serious Fraud Office
- the Crown Prosecution Service
