Proceeds of Crime Bill

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Mr. Carmichael: If the money is intended for use in crime, it is part of a criminal investigation, and the police have the power to hold it, surely.

Mr. Ainsworth: Possibly, but not exclusively, and certainly not in the case of the proceeds of crime. The hon. Gentleman suggests that moneys that are the proceeds of crime would have to be released. I do not know whether I have satisfied him—I seem to have confused him. A point that may have an impact on his anxieties is that, once criminal proceedings are initiated, the power to hold on to the money applies only if it is required as evidence. That is a narrower power than is currently available to Customs officers at the border and would be provided by the extension envisaged under the Bill. In some circumstances, the money would have to be released.

Mr. Hawkins: Of course, the issue of hanging on to the cash when it is required as evidence will crop up under clause 295, which we shall discuss in a moment. I hope that the Minister will be aware that, on behalf of the Law Society of Scotland, and for good reasons with which we agree, my hon. Friends and I have tabled amendment No. 417, which would delete clause 295(2). I do not want to anticipate that debate, because that is a separate amendment, but that issue is involved, and we shall debate it.

Mr. Ainsworth: Don't do it, then.

I think that the hon. Member for Orkney and Shetland accepts that the power to hold on to money

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that can be shown to be required as evidence will in some circumstances be far narrower than that which we are providing in the Bill. In some circumstances, the cash will need to be released.

Mr. Grieve: If the cash were believed to be the direct fruits of crime or stolen property, there would be no problem holding on to it, irrespective of whether it was needed for evidence in criminal proceedings. If the police recover money that they believe might be the property of another person, I understand that, under their current powers, they would have no difficulty in holding on to it.

Mr. Ainsworth: That is not so. If it were, we would not be introducing the Bill. We are told that, as the performance and innovation unit report exposed, police and Customs officers operating inland sometimes come across cash that is clearly derived from crime and that they believe they can show to be derived from crime, or intended for use in crime, that they have no powers to detain, although they do have them at borders. It was at their instigation, not as a result of some great plan on the part of the Home Secretary, the Prime Minister or another politician, that the Bill was introduced. The problem was brought to our attention, and it is that problem that the Bill is intended to tackle. The hon. Gentleman seems to suggest that there is no problem, and that we were deceived about the extent to which moneys remain unseizable.

Mr. Grieve: The Minister may have misunderstood my question. I am sure that he would agree that the police have the power to detain cash that they believe to be stolen property. They do not require any of the powers that we are discussing. They have had that power for about as long as that of recovering stolen property. The police frequently hold on to cash in the course of criminal investigations if they have a reasonable suspicion that it might be stolen property.

Mr. Ainsworth: The police have to be satisfied that they can show that the property is stolen. On occasion, in the course of their duties, the police come across money that they have to let go, because they cannot hold on to it as they do not currently have that power. We are discussing a civil procedure, and the standard of proof is therefore lower than in criminal procedures, in which the case must be proved beyond all reasonable doubt.

Provisions under similar schemes in drug and terrorism legislation allow for the continued detention of the proceeds of crime. They also allow cash to be detained for the same period as cash that is suspected of being intended for use in crimes. That allows for the continued detention of cash if criminal proceedings are contemplated or on-going. We can see no reason, operationally or theoretically, to distinguish the scheme from equivalent ones. I hope that, in light of my comments, the Opposition amendments will not be pressed to a vote.

The Government amendments cover some of the same issues. Amendment No. 326 is a minor drafting amendment to ensure consistency between paragraphs (a) and (b) of subsection (5). Amendment No. 328 makes the language in subsection (7) consistent with

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that in subsection (5), as there is no reason for the two subsections to differ. Subsection (7) sets out conditions for detaining cash suspected of being intended for use in unlawful conduct. Subsection (5) sets out conditions for detaining cash suspected of being recoverable property because it has been obtained through unlawful conduct. The two sets of conditions should be more closely aligned.

Subsection (7) currently permits the detention of cash suspected of being intended for use in unlawful conduct while its intended use is further investigated. Amendment No. 328 allows for continued detention of the cash while consideration is given to the criminal proceedings for an offence with which the cash is connected, or pending the conclusion of such proceedings. That is similar to subsection (5), which allows cash that is suspected of having been derived through unlawful conduct to be detained while its derivation is investigated, or while consideration is given to bringing criminal proceedings for an offence with which it is connected.

Amendment No. 328 reflects the fact that an intention to commit unlawful conduct may lead to criminal proceedings in, for example, a charge of conspiracy. It is right that cash intended for such use should be detained while a charge is considered or pending the conclusion of criminal proceedings. A similar approach has been taken in paragraph (3)(6) of schedule 1 to the Anti-terrorism, Crime and Security Act 2001 for the detention of terrorist cash.

Amendments Nos. 327, 332 and 342 are purely drafting amendments and make no substantive change. Amendment No. 342 provides a single, general interpretation of what is meant in part 5 by the conclusion of criminal proceedings.

Mr. Grieve: I come back to an issue that has exercised the Committee. The hon. Member for Orkney and Shetland has commented on it, and it was first raised by the Law Society of Scotland. Amendments on the issue were moved by my hon. Friend the Member for Surrey Heath. Perhaps lawyers have tidy minds. We are considering a new structure that is being set up by the Government. It includes a confiscation system and a civil recovery system. In the passage dealing with civil recovery procedure, there is a section on the recovery of cash in summary proceedings.

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As the Minister so rightly explained—he almost, unintentionally I think, let the cat out of the bag—the recovery of cash in the summary proceedings part had been prompted by representations from Customs and Excise and other law enforcement authorities. He has put in the middle of the civil recovery proceedings a pre-existing power that had previously been given to Customs and Excise and, at its request, has expanded it. There is nothing wrong in that. He said that the system is tried and tested, and that the Government will make it possible to be implemented by police constables in inland situations. It also applies to Scotland. The Law Society of Scotland considered the

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matter and found it a little odd. It seems to the society—it is, indeed, a valid point—that the mixing of the civil recovery provisions with other powers is not conducive to clarity.

That ties in very much with our comments on an earlier amendment about the lack of involvement of the director of the Assets Recovery Agency in the forfeiture that may follow upon the recovery of cash. I am mindful of what the Minister said about such matters. I accept that the powers of Customs and Excise have been tried and tested. What is proposed will be a substantial alteration of a pre-existing situation.

Equally, the Minister must accept that the Bill is introducing a new regime. It is perfectly legitimate for the Government to say that they will create new powers, but they say that there may be occasions when existing powers can be done away with or altered because those new powers have been brought into operation. I accept the Government's reassurances about what are, as the Minister has acknowledged, fairly draconian provisions designed to target the proceeds of crime. Provisions in respect of the confiscation of people's assets in civil proceedings, even if they have not committed a criminal offence, have not existed in this country before. However, it is important that the public are reassured that a consistent system will be implemented by an individual who will be answerable for his actions. We know that the director of the Assets Recovery Agency will be answerable for his actions and reports. We do not want a position in which there are parallel powers unless it is absolutely essential that that must be so.

The Law Society of Scotland has a good point, and it applies equally to England and Wales. The Minister is allowing a situation to occur in which cash is separated from other assets for the purposes of civil and criminal recovery. Under the clause, it will be entrusted in its civil context, not to the civil recovery authority that the Government have set up but to Customs and Excise, and the power will be widened to include the police. The Law Society of Scotland has tried to remove that power, so that it is made clear that the director of the Assets Recovery Agency will call the shots the moment that civil forfeiture, not criminal proceedings, is being dealt with.

I am open to persuasion, and I also accept that, until it was flagged up by the Law Society of Scotland, I failed to focus on the issue. Like the Minister, I went along with the view that there was a previous tried and tested procedure, which is being slightly widened. However, some interesting issues of principle are involved. We may have to return to this issue on Report, when we will have had more time to consider it more carefully, but when the seizure of cash leads, effectively, to civil forfeiture, albeit in short form, I find it difficult to understand why the director of the Assets Recovery Agency is not involved, as he is answerable for the system.

Historically, a previous Conservative Government gave extra powers to the organisations that enforce the criminal law, thereby extending their jurisdiction to bringing cases for confiscation on the balance of

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probabilities in order to deter crime. I was not a Member of Parliament at the time but I understand exactly why it was done. I also suspect that if one looks at Hansard for that time—I remember doing so at some point—one will see that civil liberties issues were raised, because the power was novel. Given that we are creating a completely new structure, and the Minister is eager to provide reassurance that people's civil liberties will not be trampled on, there might have been an opportunity to separate civil and criminal jurisdictions and put the director of the Assets Recovery Agency in control of civil proceedings. I do not know the extent to which he wishes to comment further on that, but it is an absolutely valid point.

We may be in danger, unnecessarily, of setting up a hybrid system in which the channels of accountability are blurred. I do not know whether the seizure of cash will form a major part of asset recovery—it may remain tiny—but if it does, and it is done on the civil basis, it would be highly desirable for the director of the Assets Recovery Agency to be answerable for the steps that are taken. Under the amendments, as has been highlighted, the police could seize the asset, hold it for 48 hours, ring up the director of the Assets Recovery Agency, and say, ''Look, we've no interest in this in respect of criminal proceedings, but £25,000 was found on this person. Are you interested?'' If the director said yes, he could do something about it. That might even be an argument for extending the 48-hour detention period to, say, five days, which would give him that opportunity. The ball would still be in his court, rather than the police officer's.

The Minister seems to think that this is a simple matter: that cash is a simple issue, and that the constable can deal with it. That may be so, but it might become complex in certain circumstances. During the past 12 months, a racehorse trainer was found with £55,000 as he left Heathrow airport. The money was seized, but it was returned to him when he was able to establish clearly that it was neither the proceeds of crime nor intended for the furtherance of criminal activities. Will the Minister consider whether the Law Society of Scotland has done us a good service by trying to highlight what may be a mistake in the Bill?

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Prepared 10 January 2002