Proceeds of Crime Bill

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Ian Lucas: With all due respect, is it not right that if someone acquires in good faith a motor vehicle that turns out to be stolen, the motor vehicle reverts to its original owner? Therefore, the property would be taken from the person who acquired the vehicle for value in good faith.

Mr. Grieve: The hon. Gentleman makes an interesting point, but it contrasts with my example, in which the property acquired by a bona fide purchaser for value without notice cannot be recovered. I do not know whether he wants to intervene again, but I am prepared to discuss the subject. The example of a motor car might be unusual. That is not to say that there may not be other unusual examples, but we may have to differentiate between stolen property and property that is not stolen.

As I said to the Minister earlier, we are not necessarily dealing with stolen property. Property obtained through unlawful conduct includes assets that have been acquired unlawfully, perhaps by theft, fraud or dishonest representation. However, property may also have been acquired with the profits of illegal activity. In that case, it is not stolen property at all.

Ian Lucas: I am somewhat puzzled by the distinction drawn by the hon. Gentleman. ''Unlawful conduct'' is perhaps a difficult phrase in this context. ''Criminal conduct'' is a more appropriate phrase in some senses. We are talking about the proceeds of criminal conduct, and that phrase would helpfully set out that that is the sort of property on which we are concentrating. The Bill is directed at criminal conduct. The hon. Gentleman may concede that property that is acquired as a result of criminal conduct is closely analogous to the motor vehicle that I mentioned.

Mr. Grieve: That is a most helpful intervention, and there is much sense in what the hon. Gentleman says. When matters arise in Committee, I go away and draft amendments, sometimes late at night, to try to initiate discussion. When we discussed amendment No. 356, I was concerned about the nature of the powers granted and the extent to which we were branding a person as having property obtained through unlawful conduct, when the fault may lie with the wording of part 5.

The hon. Gentleman is right. We are dealing with a general power that allows the state to search for property that has been acquired as the result of criminal conduct, and those searches can be targeted not only at the criminal but at anyone who possesses such property, however innocent they might be. That is not clearly described in the introductory section of part 5, which suggests that the power is intended to target criminals who possess unlawfully acquired property that cannot be recovered under criminal law. The Minister might wish to consider whether that description accurately explains what the Government are trying to do.

I am concerned that individuals might be tarred or tainted with criminality because proceedings have been brought against them, when they are wholly innocent of any wrongdoing. The proceedings should not be aimed at bona fide purchasers for value without notice of property that might have had a tainted origin. Subsequently, such people are specifically excluded from recovery—even though they are tainted with possessing property that has been obtained through the unlawful conduct of someone else.

That is why I drafted amendment No. 381. It is not merely an exercise in semantics. It removes the bona fide purchaser from the category in clause 306—where he is simply an individual who has had a finding against him that he possesses property that has a tainted origin, and who escapes recovery because he is a bona fide purchaser—and places him in a category where the proceedings cannot be brought against him in the first place.

I have another concern, which I will address again when we discuss further relevant amendments, such as those dealing with hearings in chambers. I am concerned about the impact that this type of proceeding—brought by the state—might have on individuals who innocently possess tainted property. Such proceedings might brand them as criminals, even if they entirely escape the recovery provisions because they innocently acquired the property—or they might have to give back some or all of it because, although it was innocently acquired, they were not a bona fide purchaser for value.

That is the area that I want the Committee to focus on—and it might wish to do that this morning. I will not take the matter further, as the amendments under discussion are probing amendments, but it should be addressed, because there is a compelling argument that the legislation should have nothing to do with bona fide purchasers for value without notice. They are specifically excluded under the recovery provisions, and yet they are included as potential targets for proceedings—and they can escape from them only at the end of the process. If amendment No. 381 were accepted, it would not be possible to bring proceedings against them in the first place. Fairness and equity—and what I have always assumed to be the normal principles of law in this country—lead me to believe that they should not be targeted at all.

Amendment No. 380 was designed to explore the issue of conduct. I tabled it before I received the Minister's letter about amendment No. 356.

Norman Baker (Lewes): I am closely following the hon. Gentleman's argument, but I do not understand why the provisions in clause 267(4)(a) do not address his concerns.

Mr. Grieve: I apologise to the hon. Gentleman for not explaining the matter sufficiently clearly, and I also apologise to you, Mr. Gale, for widening the debate, but it is necessary for the purposes of the amendment.

Several clauses in part 5 fetter the ability to recover property, even when the property has been found to have been originally obtained through unlawful conduct. The most compelling is clause 306, rather than clause 267—rather a long way ahead; I found it slightly odd that, considering its importance, it had been parked quite so far in—which provides protection to the bona fide purchaser for value without notice. Clause 306, which is entitled ''General exceptions'', provides that if

    ''a person disposes of recoverable property, and . . . the person who obtains it on the disposal does so in good faith, for value and without notice that it was recoverable property,

    the property may not be followed into that person's hands and, accordingly, it ceases to be recoverable.''

Ostensibly, that covers the stolen motor car, in terms of the state's ability to recover it.

Clause 267 is slightly different. It provides a mechanism of protection for a person who has obtained the property innocently. However, clause 267(4)(a) must be read in conjunction with paragraphs (b) to (d): each of the conditions in clause 267(4) must be satisfied.

Mr. Foulkes: Does the hon. Gentleman accept that he is getting mired in the detail? The point that the hon. Member for Lewes (Norman Baker) makes is that in making all his points the hon. Member for Beaconsfield forgets about all the subsequent qualifications, including the one that the hon. Member for Lewes mentioned. He talks as though there were no further qualifications.

Mr. Grieve: I hope that the Minister will forgive me. On the point made by the hon. Member for Lewes, I detected and presupposed a protection in clause 267(4)(a). However, the matter is much more complicated than that. If the matter were simply that the respondent obtained the recoverable property in good faith, and that were a complete protection, that would be an extremely powerful and wide protection. One has to read all the clauses to find out that in fact property that has been obtained in good faith can be removed from people. It will not be removed only if all the conditions in clause 267(4)(a) to (d), which we shall discuss later, are fulfilled.

The Minister makes a good point. Looking at the wording of part 5, a series of protections are provided. However, those protections do not protect people from the initiation of proceedings or from property that they hold being treated as property that was unlawfully obtained. I do not believe that this is purely an exercise in semantics. I am surprised that a bona fide purchaser for value without notice could go through proceedings that end with his being held to have proceeds of unlawful conduct in his possession.

We have heard a little about the limitation period, which imposes an extra fetter. Most of us, I suspect, have in our possession property that may at one time or another have been the result of unlawful conduct. It would be surprising if we did not. The protection of the 12-year limitation period is a help—I have property in my possession at home that comes from the sack of the imperial palace at Peking. I am not sure whether that constitutes property obtained by unlawful conduct, but by certain criteria it might be said to do so.

Mr. Alistair Carmichael (Orkney and Shetland): The Elgin marbles.

Mr. Grieve: That involves a different issue, because the firman of the emperor, in Istanbul, provided legitimacy for the removal by Lord Elgin of the marbles, although that, too, is arguable. However, it is a valid point. If it were not for the limitation period, that might be an issue.

Might it not be better to exclude the bona fide purchaser for value from being a person who can be categorised as holding property obtained through unlawful conduct? His obtaining was plainly not through unlawful conduct. If historically the property originated from unlawful conduct, that makes no difference, because it cannot be recovered from him.

Ian Lucas: Can the hon. Gentleman clarify what he regards as deficient about the safeguards contained in clause 306? That is the nub of whether his amendment is a good one.

10 am

Mr. Grieve: The nub of my anxiety about clause 306 is that it appears to make a concession—I accept that that is what it boils down to—on the ability to recover, rather than excluding that person from the category of people against whom proceedings can be brought. I accept that ultimately, one might ask what the difference was—but I worry about giving powers to the state to bring proceedings against individuals when, on a theoretical and philosophical basis, proceedings should not be brought or even contemplated. In those circumstances, when someone is a bona fide purchaser of property for value without notice, the property is renewed—it becomes something different—and it is his. Therefore, it should not even be a contemplated target for proceedings.

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Prepared 13 December 2001