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Serious Organised Crime and Police Act 2005 (Amendment of Section 76(3)) Order 2007

Volume 691: debated on Thursday 3 May 2007

rose to move, That the draft order laid before the House on 8 March be approved.

The noble Lord said: My Lords, this order was approved by the other place last week. Organised crime is big business. It causes untold damage on our streets and harm to our communities, and profits those responsible to the tune of billions of pounds each year. It must continue to be confronted, and it is the Government’s aim to make the United Kingdom a hostile environment for organised crime where it is difficult for these criminals to operate.

The Serious Organised Crime Agency is part of that attack. It came into operation last year with the remit to enhance the intelligence picture, attack criminal assets and pursue key criminals and groups. Beyond SOCA, the wider enforcement community has been provided with new tools to fight organised crime, and those are being expanded in the current Serious Crime Bill. SOCA also has the new function of the management of organised crime offenders. To support that, financial reporting orders were introduced in the Serious Organised Crime and Police Act 2005. They allow law enforcement agencies to monitor the financial affairs of those criminals convicted of a listed qualifying offence.

At present, qualifying offences are certain ones under the Fraud Act 2006 and what are known as “lifestyle offences”, which are listed in Schedule 2 to the Proceeds of Crime Act 2002. Lifestyle offences are covered by 10 different headings and include offences in respect of prostitution and child sex, arms trafficking and people trafficking. The draft order before the House adds to that list of offences.

The mechanics of obtaining a financial reporting order are that the court can make such an order when it is sentencing or otherwise dealing with the offender. In making the order, the court will specify the duration of the order and the frequency with which reports are to be made; what financial details and supporting documents should be in or accompany each report; and who the reports should be made to and the deadline for providing them. The order can require those sentenced to life imprisonment to report for a maximum period of 20 years. Reports are made to law enforcement, mostly SOCA, and usually consist of details of income, assets and outgoings. Required supporting evidence can include bank statements, credit card statements and other documentation showing income and outgoings. Failure to comply with the financial reporting order or providing false or misleading information in a report is an offence.

Financial reporting orders will be obtained in cases of criminals convicted of a qualifying offence who law enforcement believes pose a long-term threat. The court has a discretion whether to issue an order, and has to be satisfied that the risk of the person committing another qualifying offence is sufficiently high to justify the making of the order.

The order forces offenders to declare their financial affairs. It is intended to act as a deterrent to going back to crime. If offenders do return to crime, the reports and documents supplied in response to a financial reporting order would provide important information, leads and evidence for law enforcement.

Law enforcement agencies have found the orders invaluable. Thirteen have been made since they were introduced last April, 11 in connection with SOCA cases and two in connection with Her Majesty’s Revenue and Customs cases. It is still early days, with all but one of the recipients of orders still in prison, but it is plain that the ability to monitor financial affairs is an important additional tool in the newly promoted concept of the lifetime management of serious criminals.

In the past year, SOCA and HMRC have identified other serious offences they investigate which are not currently qualifying offences for financial reporting orders. They have made representations to the Home Office that these are serious crimes, where there is a high risk of reoffending, therefore falling squarely into the type of offences for which financial reporting orders were intended. The offences are set out in the draft order and cover money laundering, revenue offences and bribery and corruption. I commend the order to the House.

Moved, That the draft order laid before the House on 8 March be approved. 12th Report from the Statutory Instruments Committee.—(Lord Bassam of Brighton.)

My Lords, monitoring the finances of convicted criminals is something with which we wholeheartedly agree. Making them report on all their bank accounts, credit cards and other monetary transactions is clearly having a salutary effect on their criminal behaviour. We know that a number of financial reporting orders have been made involving the Serious Organised Crime Agency and Her Majesty’s Revenue and Customs. The new orders build on those in the Serious Organised Crime and Police Act 2005. It is important to add bribery and corruption, money laundering and revenue offences to the list of qualifying offences in the Act.

However, it would have been helpful to have had a little more information about how the introduction of the Act has disrupted these criminal lifestyles. For instance, what has been the rate of reoffending by any recipients of the order? Why are we still waiting for the commencement of Section 281(5) of the Criminal Justice Act 2003, which will raise the present level of offence for failing to comply with a financial reporting order from six months to 51 weeks? At least that will be better than the six months maximum at present, which seems light enough. Can the Minister tell us how much money has been recovered from convicted criminals who are the recipients of these orders? Is there an understanding of how effective these additions to the financial reporting orders will be?

Finally, I remember commenting on the work of SOCA during the proceedings on the Serious Organised Crime and Police Bill and asking what we could expect from the agency. I ask again: when will we get a report from the Serious Organised Crime Agency so that we may judge for ourselves the effectiveness of the powers that it has been granted? Then we will be able to judge whether any new orders adding to their powers are appropriate.

My Lords, I am very happy to support the order, but I would greatly appreciate it if the Minister could look at the possible improvement of the arrangements which apply where there is a civil victim of a criminal action and some prospect of financial recovery to ease the speed and efficiency with which a Mareva injunction can be obtained so that it can be applied before the assets are removed from jurisdiction?

My Lords, on the last point, it is extremely important that we get hold of the assets as quickly as possible. The noble Lord will be aware of action that the Government are taking in the form of the Serious Crime Bill before your Lordships’ House which is in part aimed at making it much easier for law enforcement agencies to act early so that any criminal activities can be nipped in the bud.

The noble Baroness, Lady Harris, asked some very good questions, only some of which I have answers to. I apologise for that. It is not that it was impossible to anticipate them but the information does not yet properly exist in the form requested by the noble Baroness. She is helpfully indicating that I can write to her, and I was about to make that offer. I am sure that I will.

Twelve of the 13 recipients of financial reporting orders are still in prison, so it is hard to judge how effective the orders have been. The recipients are a captive audience at present, but time will tell in terms of compliance rates. They are beginning to have some effect. There are further offences for failure to comply with an order when those to whom the orders are subject do not respond, fail to submit information or supply false information. The offence is punishable by a term of imprisonment of six months. That is pending the commencement of Section 281(5) of the Criminal Justice Act 2003 to which the noble Baroness referred. Thus far, non-compliance has resulted in defendants complying or being summoned to court, but nobody has yet been fined or imprisoned within the terms of the legislation.

These measures are not draconian. As noble Lords have said during the course of their brief comments, they are right, they should assist us and they further strengthen this regime. That is exactly why we have put them in place. For those reasons, I have pleasure in commending them to your Lordships’ House this afternoon.

On Question, Motion agreed to.

House adjourned at 5.27 pm.