James
Brokenshire: I welcome the Minister’s introductory
remarks in relation to part 4, as Her Majesty’s Opposition
support powers to ensure that the ill-gotten gains of criminals and
organised crime are seized and returned where appropriate. Our
difficulty with part 4 is its extent and nature, the protections that
it affords and the judicial oversight that may apply—in other
words, its practical import. The Minister will be aware of the comments
made by the Bar Council during the evidence session, when it noted that
this was a significant change, rather than merely a tidying-up
exercise. We will come to some of those revisions as we work through
part
4. The
Minister’s explanation of some of the amendments in this group
was helpful. I would appreciate further clarification on amendment 267,
which allows the new right to charge. The Minister said that the
amendment was not adding a extra cost but was setting out the
regulation and the approach to be taken on payment. Proposed new
section 67AA(3) states:
“If the
court makes a determination under this section the appropriate officer
is entitled to payment of the amount under section
55(4)” of
the Proceeds of Crime Act. However, yet section 55(4) of
that Act does not provide for an amount. It makes provision for the
order in which certain payments are to be made. Am I missing something?
I appreciate that we are considering Government amendments to a
provision that amends another measure, so it is not necessarily easy to
follow this, and the Minister may not be able to give me a straight
answer to my question and may need some assistance. Some of these
technical issues are a little difficult to follow. Proposed new section
67AA(3) seems to be about a payment, but the section to which it refers
does not appear to mention payment. Perhaps I have misunderstood
something. The Minister, or a note passed to him, may be able to
elucidate that
point.
Mr.
Coaker: I am advised that it is the payment of costs. I
wish to reiterate that the purpose of the amendment is simply to ensure
that the amount paid is the reasonable cost as determined by the
magistrates court. It will be for the court to determine what those
reasonable costs are; it is not about trying to ensure that somebody
profits from the exercise. That judicial oversight is built into the
Bill. The provision refers to the payment of an amount that the court
will determine as the costs incurred by the law enforcement body in
storing the detained property, and as such will encourage that body to
do more of this work, knowing that it does not have to incur a
cost. Amendment
259 agreed
to.
James
Brokenshire: I beg to move amendment 87, in
clause 32, page 24, line 4, leave
out paragraph
(c).
The
Chairman: With this it will be convenient to discuss the
following: amendment 88, in clause 32, page 24,
line 17, leave out subsection
(10). Amendment
89, in
clause 32, page 24, line 28, leave
out paragraph
(c). Amendment
90, in
clause 32, page 24, line 39, leave
out subsection
(10). Amendment
91, in
clause 33, page 25, line 17, leave
out paragraph
(a). Amendment
92, in
clause 33, page 25, line 21, leave
out paragraph
(e). Amendment
94, in
clause 35, page 26, line 30, leave
out paragraph
(a). Amendment
95, in
clause 35, page 26, line 34, leave
out paragraph
(e). Amendment
96, in
clause 36, page 27, line 10, leave
out from ‘or’ to the end of line
15.
James
Brokenshire: These amendments relate to the application of
the power of confiscation and the power to retain seized property so
that it is available to accredited financial investigators. My first
question is whether it is appropriate to grant those significant powers
to people who are not warranted police officers or officers of the
Serious Organised Crime Agency or Revenue and Customs. Accredited
financial investigators are simply defined as such by order of the
Secretary of State. Will the Minister confirm who is considered to be
an accredited financial
investigator and what plans he has to extend that definition, if at all?
I acknowledge that this has been a steady move by the Government over a
period of time. In their 2006 consultation document, “New powers
against organised and financial crime”, they
said: “Financial
investigators are becoming more independent from police in their work
and therefore to give them the full range of powers would be
beneficial.” The
example given to support that was police staff designated by chief
constables to have certain powers under the Police and Criminal
Evidence Act
1984. What
controls and standards are expected of such financial investigators?
How independent are they and what checks exist to ensure that they use
the powers appropriately? In its report on the Assets Recovery Agency
published in 2007, the Public Accounts Committee was highly critical of
the agency’s role in supervising the financial
investigators’ regime:
“The
agency has not been adequately monitoring the accreditation of trained
Financial Investigators, despite its obligation under the Proceeds of
Crime Act 2002. It did not know, for example, how many active Financial
Investigators should have been completing Continuing Professional
Development activities in order to retain their accreditation and it
was not monitoring completion of these
activities.” What
assurances can the Minister provide that the situation has improved?
Given the complexity and nature of the powers that are at issue, it is
pretty significant if we are not sure how many financial investigators
have retained the qualifications to fulfil the job. Given the
PAC’s comments, is it appropriate to grant further powers to
financial investigators in the light of this, and what steps have been
taken to ensure that the accreditation process is robust and
reliable? Why
are the powers to retain seized property that are proposed to be
granted to accredited financial investigators in England, Wales and
Northern Ireland not intended to apply to Scotland? The reference to
accredited financial investigators is conspicuous by its absence from
proposed new section 120A of the Proceeds of Crime Act 2002. Why or how
will this impact on operations across the whole of the United
Kingdom?
Mr.
Coaker: Let me deal first with my response to the hon.
Gentleman’s amendment, while I receive advice about
Scotland. The
National Policing Improvement Agency trains the accredited financial
investigators. My understanding from the people there is that they take
this area of work seriously, putting a great deal of credence in it,
because they understand, with the additional powers given to accredited
financial investigators, how important is the need to ensure that they
are accredited properly. It is something that the NPIA has been working
extremely hard on over the past period of
time. The
hon. Gentleman asked me about monitoring. The monitoring takes the form
of monthly activities and work-based evidence submissions, via the
NPIA’s financial investigation professional register. There is a
dip sample of evidence submitted in support of continued correct use of
those powers. If they see in that dip sample that there is
inappropriate or incorrect use of the powers, the NPIA has the power to
withdraw that accredited status. From that point of view, that is a
significant step forward.
The hon.
Gentleman also asked about numbers and, it might be of interest to the
Committee, to learn that the latest total, from February 2009, is
2,135. Of those, the majority—1,311—are warranted police
officers, the remainder civilian investigators. I shall answer his
point about Scotland later, when I receive advice. We see the role of
accredited financial investigators as a particularly important part of
this whole area of work. I hope that the assurances that I have given
him about the importance of training are
helpful. There
are no accredited financial investigators in Scotland. Scotland has no
need for accredited financial investigators according to the law
enforcement agencies there—only police are used. Given that that
is the case, it would not be appropriate to include anything with
respect to Scotland in the amendments. With that, I hope that the hon.
Gentleman will see fit to withdraw his
amendment.
James
Brokenshire: There is still a question of why there is the
distinction, but we can leave that for another day. I beg to ask leave
to withdraw the
amendment. Amendment,
by leave,
withdrawn. Amendment
made: 260, in clause 32, page 24, line 23, leave out second
‘the’ and insert
‘a’.—(Mr.
Coaker.) Clause
32, as amended, ordered to stand part of the
Bill.
Clause
33Power
to retain seized property: England and
Wales 4
pm
Mr.
Coaker: I beg to move amendment 150, in clause
33, page 25, leave out line 2 and
insert— ‘(1)
The Proceeds of Crime Act 2002 (c. 29) is amended as
follows. (2)
After section 41
insert—’.
The
Chairman: With this we may discuss the Government
amendments 151 to 155, 164 to 166, 172, 183 to 185, 192 to 200, 202 to
204, 210, 211, and 239 to
241.
Mr.
Coaker: I have spoken to the hon. Members for
Hornchurch and for Chesterfield, and I will move some of the Government
amendments formally. On others, however, I will read into the record
the facts, which may be of help not only to the Committee, but also to
other hon. Members.
The
amendments add to the new provisions in the Proceeds of Crime Act, as
set out in clauses 33 to 38. Clauses 33 to 35 introduce a new power to
continue to detain property seized under other powers where the
relevant property is subject to an existing restraint order. As the
Committee knows, a restraint order is an interim measure under the
Proceeds of Crime Act, which prohibits persons from dealing with or
disposing of specified property. A restraint order does not, however,
provide for a general power to retain property. Although restraint
orders effectively freeze property, that property may remain in the
hands of a defendant. That obviously carries the risk that the
defendant may dispose of, hide or devalue it to frustrate a subsequent
confiscation order. That is particularly true of moveable property such
as cars, jewellery and electronic equipment.
There is, of
course, provision for those affected by the restraint order, and
therefore the detention of the property, to challenge the order. If a
decision discharges or varies the restraint order and releases the said
property from detention, the prosecutors or others have the right of
appeal. Clause 33 provides that in England and Wales, such property can
continue to be retained by law enforcement with a view to it still
being available for sale to meet a future confiscation order. That will
ensure that items from which the defendant benefits as a result of
criminal conduct are available for confiscation, which is only right,
just and proper. The powers under which property has been seized and
can be detained are certain powers of the Police and Criminal Evidence
Act 1984 and the Proceeds of Crime Act 2002. For example, property
seized as evidence under PACE, and also subject to a restraint order
may continue to be retained even when the evidential purpose for
retention no longer
exists. To
explain why there seem to be so many amendments, clauses 34 and 35
provide equivalent provisions for the equivalent schemes in Scotland
and Northern Ireland. The amendments are parallel amendments to those
provisions. Clause 36 inserts several new sections—47A to
47P—into the Proceeds of Crime Act. It provides for specific
search and seizure powers in England and Wales to prevent the dispersal
or devaluation of personal property in anticipation of a confiscation
order being made. Therefore, it differs from clauses 33 to 35, which
provide for detention powers only. The powers are subject to judicial
oversight and various other safeguards. Clauses 37 and 38 provide
equivalent provisions for the equivalent schemes in Scotland and
Northern Ireland. Once property has been seized under clauses 36 to 38,
the seizing officer can initially detain it for 48 hours. He then needs
to obtain judicial approval for continued detention. That will ensure,
along with other safeguards, that the detention of the property is
proportionate. Depending on the facts of the case, the judicial
approval may be from a magistrates court making a detention order or a
Crown court making a restraint order or varying an existing order to
authorise the continued detention. Restraint orders are, and will be,
used in more complex and high-value
cases. The
amendments provide that if a decision is made by the courts relating to
the detention of property, which is then appealed, the property remains
detained until the appeal is concluded. That also applies in cases
where there is an outstanding application before the courts. That is
necessary as the circumstances by which the property is detained may
cease while the appeal or application is pending, if, for example,
under proposed new section 47K of the Proceeds of Crime Act, the
initial 48 hours of detention expires and an application to the Crown
court for a restraint order, which would authorise the continuing
detention of that property, has been made but awaits a decision. In
those circumstances, as the provisions are currently drafted, the
property would have to be
returned. Amendment
172 provides that during an appeal the property remains detained until
that appeal is concluded. That is necessary as the provisions, as
currently drafted, require the property to be returned. Other
amendments in the group achieve the same in other applications and
appeals where otherwise have to be returned. The
amendments ensure that property continues to be detained until there is
no further possibility of an appeal. If the property were returned, it
would be to those who are likely to dissipate it, thwarting the
original reason for the seizure and detention and thereby undermining
the policy intention. The property could be unavailable when a
confiscation is made and needs to be paid, which would undermine the
purpose of the
clause. In
the clauses, the powers to detain are made with the view that when a
confiscation order is made and requires payment, the property retained
under the order can be sold to meet that confiscation order. The power
of the magistrates courts to authorise sale of seized property is
provided in clause 39. The amendments plug a gap to ensure the ongoing
detention of property when that continuing detention is being
contested. Amendments
194 to 200 add to the new search and seizure provisions in clauses 36
to 38 of the Proceeds of Crime Act 2002. The three clauses are
necessary for each of the three jurisdictions of the UK. They
provide powers for the search and seizure of property to prevent its
being made unavailable for satisfying a confiscation that has been, or
might be, made. It also provides for the seizure of property
that might otherwise be diminished in value by the conduct of a
defendant or anyone else. That is an important addition to ensure that
confiscation orders are paid when they are
made. As
background to the amendments, the existing confiscation provisions in
the Proceeds of Crime Act relate not only to the property held by a
defendant but to certain gifts made by them to third parties, such as
family and friends. That is an important provision as it stops
offenders circumventing confiscation by placing their proceeds into the
hands of other people, notably immediate family. The legislation calls
such property “tainted gifts”, and it is an established
and accepted law that in calculating a confiscation order, the court
also considers the value of the property that the defendant has given
away. “Tainted gifts” includes outright gifts, as well as
under-value transactions. It is of note that criminals
often reside in houses registered in another family member’s
name.
Regarding
the amendments, although aware of the tainted gift aspect of
confiscation, our initial thinking was that the new powers of search
and seize should be limited to the suspect. Practitioners have
since voiced concerns that that would be a significant loophole.
Defendants could engineer the exclusion of their property by making
gifts; an extreme example being a defendant handing over his jewellery
and other expensive moveable goods to family members present at a
search. Accordingly, the amendments introduce the ability to search for
and seize not only property directly held by the defendant, but those
tainted gifts made by him or her.
I
have tried to answer the point that the hon. Member for Hornchurch made
at the beginning, and to look at such matters during the development of
the Bill. It is significant that the same stringent safeguards will
apply to such searches and seizures. For example, an officer would need
reasonable grounds of suspicion before carrying out a search and
seizure, and either a warrant or consent to be on the premises would be
required for a premises search.
The code of
practice will deal with the point of search and seizure from third
parties suspected of being recipients of tainted gifts. Under the
Proceeds of Crime
Act, restraint orders can refer to third parties if they are recipients
of tainted gifts. It is also of note that under that Act a search and
seizure of cash under Part 5, and the execution of an investigation
search and seizure warrant under Part 8 do not have to be against a
person suspected of crime. As with this new power, both those measures
are subject to a code of practice and have been operating successfully
for six
years. Amendments
193 and 211 repeal the existing seizure power in the confiscation
provisions of the Proceeds of Crime Act. Section 126 in Scotland and
the Northern Ireland equivalent provide that property subject to an
interim restraint order may be seized in the one circumstance of
preventing its removal from the country. Clauses 37 and 38 of the Bill
make provision for more extensive search and seizure powers that
subsume those existing powers. Their continued existence is therefore
not justified and the powers are
repealed. Amendments
239 to 241 are consequential on those made in respect of the powers to
detain property under clauses 36 to 38. Those clauses specify that
property may continue to be detained until there is no further
possibility of an appeal. The amendments clarify the meaning of that.
There are three amendments for the three separate UK
jurisdictions.
I apologise
to the Committee for the length of that, but sometimes that is
necessary, because we must ensure that accurate information is read
into the record, so that our legislators can refer back to it. Many of
the provisions in this part of the Bill will have to be dealt with that
way, and I apologise in
advance.
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