Proceeds of Crime Bill

[back to previous text]

Mr. Stephen McCabe (Birmingham, Hall Green): I am beginning to think that I am misunderstanding the hon. Gentleman. Will he give me an example of how somebody innocently acquires assets derived from a cocaine deal?

Mr. Grieve: Perhaps understandably, the hon. Gentleman has not been following the debate over the past few sittings. The whole issue of associated and

Column Number: 776

joint property is about circumstance. A sum of £2,000 may be the result of a cocaine transaction, so, as I have explained, there is no victim, because nobody has lost that £2,000. Although the transaction was unlawful, the individual who paid the money did so willingly, because he wanted the cocaine.

6 pm

Mr. Stinchcombe: May I mention, as an aside, the fact that 80 per cent. of the acquisitive crime in my constituency is drug related? The person who pays for that cocaine is paying for it with the proceeds of other crimes.

Mr. Grieve: That is a valid point, but it raises an issue of recovery separate from that which is raised with regard to the person who originally committed the crime.

It is socially desirable, and in the interests of justice and the maintenance of law and order, that the state should recover the proceeds of unlawful conduct; that is why my party has supported the principle of the Bill. However, it is also necessary to address the consequences for individuals who become involved in that process innocently; that is why associated and joint owner property are important. I hope that that answers the hon. Gentleman's point.

The Minister would not have included the clauses that we have been discussing unless he accepted the fact that it is likely that situations will arise involving individuals who hold associated property—exempted joint owners—who have the problems that we addressed earlier when we discussed who should be exempt. The provisions under discussion explain how the court should deal with the recovery of property in default of agreement. In those circumstances, a degree of primacy should be accorded to the innocent individual who has got mixed up in the matter, and who might be ruined by the process of having the relevant assets removed from him.

The court has a wide discretion, and I simply suggest that it should be exercised in a way that addresses the rights of the person who holds the associated property, before the rights of the enforcement authority are taken into consideration.

Mr. Ian Davidson (Glasgow, Pollok): There appear to be parallels between key issues concerning tainted gifts, about which I sought clarification, and the subject under discussion—with regard, for instance, to someone who owns an asset and alleges that it has been acquired honestly and fairly. I was wondering whether the hon. Member for Beaconsfield agreed with me about that.

Mr. Field: Let me spell out my party's concern. I understand why the Government, and other Labour Committee members, hold to their view about the matter: it is difficult to accept that an individual who has gained from the proceeds of crime might try to rely on this clause, or others, by saying, ''Actually, part of the money was from illegal proceeds, but some of it was legitimately acquired.'' It might be difficult, in such circumstances, to identify a defined pool, or it

Column Number: 777

might be straightforward to do that, but the onus must be on the criminal who has benefited from the proceeds of crime to show that a defined part of his assets is associated property—that a defined part of it was generated by legitimate means.

My party has particularly deep concerns about the consequences for innocent third parties. With regard to the confiscation of the proceeds of crime, the Assets Recovery Agency might tell such people that they are caught up in the issue of associated property, and it might then put a great burden of proof on them. They might have bought property in tandem with someone who was relying on the proceeds of crime, but they might not have known that any of the moneys that were going towards the purchase of the property—or land, or item—were the proceeds of crime. My hon. Friend the Member for Beaconsfield has got this absolutely right—when an innocent third party is involved, it would be wrong for that innocent third party to be lower down the pecking order. Surely, in that context, the innocent third party's interests should come first.

I entirely appreciate that when an individual who has relied on the proceeds of crime tries to argue that only a small proportion of the money that went into a purchase was the proceeds of crime, there must be a greater burden on that individual to prove his case. However, when an innocent third party is involved, I, too, share my hon. Friend's concerns that it would not be right for that individual to have as great a burden placed on him in proving his case as the villain.

Mr. Ainsworth: I accept what the hon. Gentleman is saying. Supporting his hon. Friend, he says that he does not believe that the innocent third party—the person who owns associated property, or the joint owner of property that is potentially recoverable—should be lower down the pecking order, but they are not. In fact, his hon. Friend is seeking to put them higher up the pecking order. The Bill obliges the two interests to be dealt with together.

We have clashed on this issue before, and the hon. Member for Beaconsfield has accused me of trying to misrepresent his views, but I continue to be amused by his concept of victimless crimes. We would not be undergoing this process if such crimes were victimless. The victims are everywhere. They are in our constituencies, suffering massively from the consequences of the acquisitive crime that drives the gangs that organise cocaine deliveries to Glasgow, Pollok, to Coventry, North-East and elsewhere. We are trying to set up a system in which the various enforcement agencies provided for under the Bill act on behalf of society in general—but the hon. Gentleman has chucked into that the concept of the victimless crime, which does not represent the world as I see it.

Mr. Grieve: That seems a little far-fetched, in the light of the amendments. The principle of recovery is established; we are trying to address the method of recovery. The rights of the individual should have primacy. The Under-Secretary said that I had suggested that such crimes are victimless. I never said

Column Number: 778

any such thing. However, we must narrow the issue to financial matters, which do not include the wider social victims. We are not necessarily dealing with property that has been unlawfully obtained in the sense of being stolen or obtained by fraud from another individual. We are dealing with the proceeds of unlawful conduct, which is different.

Mr. Ainsworth: I understand that, but the hon. Gentleman says that he supports the principle of recovery. He knows how difficult recovery will be, and how adept people are at hiding the proceeds of crime. The enforcement authority must therefore have the ability to chase property through its various transformations, and along the routes that it travels. When it discovers the property that is the representation of the proceeds of crime, and that is inextricably tied up with other property, in unravelling and dealing with all that, consideration should be given to both sides. The hon. Gentleman wants to relegate the public interest below that of the joint owner or the associated owner. I fundamentally disagree with that, because of the origin of the problem and the need to be effective in recovering the proceeds of crime. I am not seeking—although the hon. Member for Cities of London and Westminster (Mr. Field) is under the impression that I am—to give lower priority to the person whose property has become tied up and, as a result, is associated property. We want the two matters to be dealt with equitably.

Mr. Grieve: Yes, but again I bring the Minister back to what the clause is all about. It provides mechanisms by which the court, in default of agreement, can devise ways and orders to ensure that a recovery order is made and implemented to allow money to go back from the person who holds the associated property, or the excepted joint owner, to the enforcement agency. It is implicit in the clause that the recovery will take place. That governs the manner in which the recovery will take place, so may I say again to the Minister that the rights of the innocent individual who is affected should have primacy against those of the enforcement agency? The agency will still recover the money—or, at least, that is the principle behind the clause.

Mr. Ainsworth: I think that we disagree, and I am not sure that it is worth continuing with the argument.

Under clause 272(4), in making such a provision the court must have regard to the rights of the people concerned and the value to them of the property, as well as to the rights of the enforcement authority. The court will look at all matters that have a bearing on the issue, not only at monetary value. It will consider the rights of the person and the interest of the enforcement authority at the same time. The overarching safeguard is that it can make an order in respect of non-recoverable property only if it thinks it just and equitable to do so.

The amendments would mean that the court would be required to have principal regard to the rights of the people concerned and the value to them of the property. We do not believe that the amendments are needed to ensure that the persons who hold associated or joint property are treated fairly. Subsection (4) is

Column Number: 779

essentially telling the court to act proportionately. The court must weigh up the public interest in ensuring that the enforcement authority receives the proceeds of the recoverable property as against the property rights of the individual associated property holder or excepted joint owner.

Mr. Grieve: Perhaps I have misunderstood what clause 272 is trying to achieve. If I have, I should be grateful for the Minister's clarification. I assumed that it presupposed that the principle of recovery, including whether payment might be postponed, had been established. Subsections (2) and (3) refer to the provisions that a recovery order may make in terms of creating or extinguishing interest, vesting property in the trustee, extinguishing the joint owner's interest and the ''severance of his interest''. It is in those areas that I was asking for the rights of a person who holds the property to be regarded as paramount, not with regard to the principle that eventually, recovery should take place. If I have misunderstood the provision, and the Minister is saying that subsection (4) allows for the possibility that no recovery will take place, I should be grateful to be informed.

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 18 December 2001