Proceeds of Crime Bill

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Granting interests

Mr. Grieve: I beg to move amendment No. 473, in page 176, line 45, leave out subsection (2).

Here we go again, Mr. McWilliam. Clause 307(1) states:

    ''If a person grants an interest in his recoverable property, the question whether the interest is also recoverable is to be determined in the same manner as it is on any other disposal of recoverable property.''

That is a clear statement. However, the following subsection merely offers a further example of it, and, for the same reasons that I have previously raised, I ask the Minister whether it is necessary.

Mr. Ainsworth: Clause 307 makes provision about the granting of interests in property. Subsection (2) sets out how interests in recoverable property are to be treated, both where the property is the original property obtained through unlawful conduct, and where it is representative property. The amendment would delete the subsection, thus removing the explanation of how interests in the original and representative property are to be treated.

Under clause 307, where a person grants an interest in recoverable property, the granting of the interest is to be regarded as a disposal of the property. The question whether the interest is recoverable is then to be determined in line with the provisions regarding disposal of recoverable property. Let us suppose, for example, that a person who has obtained a freehold house through the proceeds of unlawful conduct grants a tenancy of it. At the time the house was obtained, the tenancy did not exist. The tenancy cannot therefore be described as having been obtained through unlawful conduct, either by the landlord or the tenant, but it is intended to be as recoverable as the property itself.

Subsection (2)(a) sets out how the provision is to work when the property in which an interest is granted is the original property. It is to be treated as though it had been obtained through the same conduct. Subsection (2)(b) sets out how it will work when the property is representative property; the interest is to be treated as representative property. Subsection (2) therefore provides a valuable indication of how interests in recoverable property should be treated. That will assist the court by showing how the provisions under clause 307(1) are to be applied. For reasons that, as I am sure that the hon. Member for Beaconsfield anticipates, are similar to those that I gave previously, I invite him to withdraw the amendment.

Mr. Grieve: I am grateful to the Minister for his explanation. I can see that the provision may be helpful in some way, and if he wants it in the Bill, so be it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 307 ordered to stand part of the Bill.

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Clause 308


Mr. Ainsworth: I beg to move amendment No. 463, in page 177, line 23, after 'under', insert

    'section 2 of the 1985 Act,'.

The Chairman: With this it will be convenient to take Government amendments Nos. 464 to 469.

Mr. Ainsworth: The amendments are purely technical. They are designed to add references to the separate Scottish legislation on personal insolvency under clause 308.

Amendment agreed to.

Amendments made: No. 464, in page 177, line 24, after 'of', insert 'interim trustee or'.

No. 465, in age 177, line 27, after 'or', insert

    'in relation to Scotland, of a person whose estate has been sequestrated,'.

No. 466, in page 177, line 30, at end insert


    (f) in relation to Scotland, it is property comprised in the estate of a person who has granted a trust deed within the meaning of the 1985 Act.'.

No. 467, in page 177, line 41, at end insert—

    '( ) the 1985 Act means the Bankruptcy (Scotland) Act 1985 (c.66),'.

No. 468, in page 177, line 46, at end insert

    'or, in relation to Scotland, any property comprised in an estate to which the 1985 Act applies,'.

No. 469, in page 178, line 2, after 'of', insert 'the 1985 Act,'—[Mr. Bob Ainsworth.]

Question proposed, That the clause, as amended, stand part of the Bill.

Mr. Wilshire: I shall not detain the Committee; I just want to be told that I am wrong. [Hon. Members: ''You are wrong.''] Such psychic powers could be used to tell us who will win the 3.30 at Kempton Park tomorrow.

The Chairman: Order. The hon. Gentleman has been here long enough to know that hostages to fortune in Committee are routinely shot.

Mr. Wilshire: So long as it is only the hostages to fortune that are shot, Mr. McWilliam. I shall soon come to a query about wills and intestacy, so perhaps that turn of phrase will make me feel comfortable.

Am I to understand that if someone who receives the proceeds of crime manages to organise himself in such a way that he becomes bankrupt, proceedings cannot be taken against him unless permission is granted? If that is so, in what circumstances would permission would be granted? I sense a loophole. Having committed the crimes, people might find that to organise a bankruptcy petition could be a useful way of avoiding proceedings.

Mr. Ainsworth: I hope and believe that there is not a loophole in the provision. It is for the insolvency court to decide whether action goes ahead. A petition does not necessarily preclude recovery going ahead. When insolvency and recovery are taking place at the same time, the insolvency court will be given the discretion

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to decide whether to go ahead. The loophole that the hon. Gentleman fears will not be created.

Mr. Wilshire: As I understand it, the insolvency court could decide to allow the insolvency proceedings to go ahead. If that is so, surely there is a loophole, because if you can disguise the way in which you brought about the insolvency, you could achieve a decision that would allow insolvency to go ahead. You could have organised your creditors in such a way that they would gain possession of the proceeds of crime, and the Bill would stop the pursuit of them.

The Chairman: Order. My bank manager may be a bit fed up with me after my Christmas spending spree, but I am not thinking of filing a bankruptcy petition. When the hon. Gentleman uses the word ''you'', he is referring to me.

Mr. Ainsworth: As I said, the insolvency courts will hear representations and balance the rights of the creditors against the rights of the director. However, the director will argue his case and say that the proceedings should go ahead. The insolvency court will have to hear the other representations. It is only right that the interests of creditors should be taken into account. I hope that the hon. Gentleman will not argue that they should not. The fact that the court has the discretion to decide protects the rights of creditors. It is for the court to decide on the balance between their rights and the director's need to recover the proceeds of crime.

Clause 308, as amended, ordered to stand part of the Bill.

Clause 309

Obtaining and disposing of property

Question proposed, That the clause stand part of the Bill.

Mr. Wilshire: This is the matter about which I gave notice. Subsection (3) states:

    ''Where a person's property passes to another under a will or intestacy or by operation of law, it is to be treated as disposed of by him to the other.''

Will the Minister reassure me that the disposal would not mean that the items concerned could not be pursued? If a matter were not pursuable because it passed through a will or intestacy, the temptation to murder would be rather high.

Mr. Ainsworth: There is always a temptation to murder, particularly at this time of day. I assure the hon. Gentleman that a will or intestacy does not preclude the property from being pursued and recovered.

Clause 309 ordered to stand part of the Bill.

Clause 310

General interpretation

Amendment made: No. 340, in page 178, line 25, at end insert 'or (7)'.—[Mr. Bob Ainsworth.]

Mr. Ainsworth: I beg to move amendment No. 341, in page 179, line 14, leave out

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    'by virtue of section 267'

and insert

    'under section 267 (including one made by virtue of section 276)'.

The amendment makes a technical change to the definition of ''recovery order'' given in clause 310 in order to achieve greater clarity in the drafting. ''Recovery order'' is currently defined as

    ''an order made by virtue of section 267''.

That is intended to include the recovery order made in

    ''terms agreed by the parties''

under clause 276. The amendment clarifies that point.

Amendment agreed to.

Amendment made: No. 342, in page 179, line 43, at end add—

    '( ) Proceedings against any person for an offence are concluded when—

    (a) the person is convicted or acquitted,

    (b) the prosecution is discontinued or, in Scotland, the trial diet is deserted simpliciter, or

    (c) the jury is discharged without a finding'—[Mr. Bob. Ainsworth.]

Clause 310, as amended, ordered to stand part of the Bill.

New Clause 8

Consent orders: pensions

    '(1) This section applies where recoverable property to which proceedings under this Chapter relate includes rights under a pension scheme.

    (2) A recovery order made by virtue of section 276—

    (a) may not provide for the rights to be vested in the trustee for civil recovery, but

    (b) may include provision imposing the following requirement, if the trustees or managers of the scheme are parties to the agreement by virtue of which the order is made.

    (3) The requirement is that the trustees or managers of the pension scheme—

    (a) make a payment in accordance with the agreement, and

    (b) give effect to any other provision made by virtue of this section in respect of the scheme.

    (4) The trustees or managers of the pension scheme have power to enter into any agreement to which a recovery order made by virtue of section 276 may give effect.

    (5) The following provisions apply in respect of a recovery order made by virtue of section 276, so far as it includes the requirement mentioned in subsection (3).

    (6) The order overrides the provisions of the pension scheme to the extent that they conflict with the requirement.

    (7) The order may provide for the recovery by the trustees or managers of the scheme (whether by deduction from any amount which they are required to pay in pursuance of the agreement or otherwise) of costs incurred by them in—

    (a) complying with the order, or

    (b) providing information, before the order was made, to the enforcement authority, interim receiver or interim administrator.

    (8) Sections 273(6) and 274 (read with section 275) apply as if the requirement were included in an order made by virtue of section 273(2).

    (9) Section 275(3) to (6) has effect for the purposes of this section.'.—[Mr. Bob Ainsworth.]

Brought up, read the First and Second time, and added to the Bill.

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