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Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) (England and Wales and Scotland) Order 2015

Volume 760: debated on Tuesday 3 March 2015

Motion to Consider

Moved by

That the Grand Committee do consider the Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) (England and Wales and Scotland) Order 2015.

Relevant document:18th Report from the Joint Committee on Statutory Instruments

My Lords, these orders give effect to four codes of practice that provide guidance on the use of various powers under the Proceeds of Crime Act 2002—POCA. The amendments to the codes of practice are necessary purely as a consequence of amendments to POCA previously approved by this House. It is therefore important to note that we are not debating the powers themselves, but rather the content of the codes which give guidance on the use of those powers.

The codes provide an important safeguard and ensure that the powers in POCA are used in a targeted, consistent and effective way, thus providing vital reassurance to the public that the powers are being used appropriately. POCA stipulates that the Secretary of State must prepare and publish a draft of any new or revised code, consider any representations made and modify the draft as appropriate. I can assure the Committee that proper consultation has been undertaken on all the codes that I will refer to today.

The first of these codes, on cash searches, governs the use of powers to search for cash suspected to be the proceeds of, or intended for use in, crime. The second order gives effect to a new code of practice governing the use of search and seizure powers to prevent the dissipation of property that may be used to satisfy a future confiscation order made under POCA. The code also governs the use of the power to detain such property. The third order before the Committee gives effect to a revised code of practice providing guidance on the use of the powers of investigation by law enforcement officers under POCA.

POCA has been amended so that the Crown Court, rather than the High Court will deal with investigation powers relating to a detained cash investigation. Civil recovery investigation powers have been extended to cover persons as well as property, and provide for requests for evidence to be made overseas. The revised code addresses those changes. The Attorney-General put forward similar amendments to the code he made in relation to the investigation powers available to prosecutors in civil recovery cases.

The amended codes before noble Lords build on previous codes issued under POCA. They closely follow those issued more widely to police officers under the Police and Criminal Evidence Act 1984. The codes provide an important safeguard and ensure that the powers are used in a targeted, consistent and effective way, thus providing vital reassurance to the public that the powers in POCA are being used appropriately. The orders before the Committee will bring all the relevant codes of practice into effect, ensuring that effective and up-to-date guidance and safeguards are in place and enabling full commencement of the POCA amendments that I have described.

Once commenced, the new powers will give officers important new tools for the recovery of criminally obtained assets. This is a key pledge of our serious and organised crime strategy and this Government’s commitment to tackling all levels of crime. We are working towards a common commencement date for these new powers across Great Britain of 1 June 2015. Commencement of the powers in Northern Ireland will be slightly delayed, as we have only recently secured legislative consent for the Assembly to fully extend the NCA’s powers to Northern Ireland. However, we expect these new powers to commence in Northern Ireland before the end of the year.

The use of these powers will rightfully be guided by the codes of practice. They are an important safeguard to ensure the targeted, proportionate and effective use of these powers, balanced against the rights of individuals and communities. I therefore ask the Committee to approve these orders. I beg to move.

My Lords, as the Minister has reminded us, we are not here to discuss the original legislation but the codes of practice. However, the question is just how successful will the codes of practice be in achieving the goal that is set out in the legislation. These draft codes of practice have been set out to guide law enforcement officers and accredited investigators in the exercise of their functions when conducting investigations under the relevant parts of the Proceeds of Crime Act 2002. Indeed, the codes go through many facets of the investigation of proceeds of crime, including search and seizure warrants, monitoring orders, interview conditions and obtaining evidence from abroad.

It was not that long ago that we made our thoughts known on the effectiveness of the recovery of criminal assets in the UK. Indeed, the Serious Crime Bill will update further the provisions that we are debating today. Amendments relating to POCA in that Bill were in part a response to the NAO report, which detailed the weaknesses in asset recovery in the UK. The report noted that only 26p out of every £100-worth of confiscation orders imposed by the courts is being taken back from criminals.

During debates on the Serious Crime Bill, we raised concerns about the levels of overseas co-operation and since the investigations code of practice touches upon obtaining evidence from abroad, I will again express our concerns about international co-operation in this area and the apparent lack of effective consultation on how to strengthen it. I think it is also the case that the pages of guidance for the investigations apply to the National Crime Agency. Can the Minister say how seriously or otherwise asset recovery under the Proceeds of Crime Act is taken in the light of the very recent admission from Mr Bristow, the head of the agency, that more than £1.3 billion owed by convicted criminals to the taxpayer is unlikely ever to be recovered? That is £1.3 billion out of a total of, I think, something like £1.46 billion outstanding from confiscation orders and waiting to be clawed back. Such an approach to asset recovery was described by the chair of the House of Commons Home Affairs Select Committee as “a little depressing”. Surely, few would disagree with that comment.

We are told that in order to implement these amendments to POCA—I think this is in the Explanatory Memorandum—including training as far as the codes are concerned, the National Crime Agency will require about £20,000 for training. We, of course, support the strengthening of legislation surrounding the investigation of proceeds of crime and the relevant codes, but the legislation and codes must not be made merely for show. They must be properly implemented to ensure that the Mr Bigs of this world are not getting away with it. I hope that the Minister will be able to provide some assurance that these codes are going to contribute towards a more effective operation in the areas of concern to which I have referred. Finally, can the Minister assure us that if we are to put further money into the National Crime Agency, the organisation will be in a position to adopt a more effective line in future on the recovery of ill gotten gains?

I thank the noble Lord for his questions on these orders. He asked four main questions. If I leave anything out, I will be very happy to write to him subsequently.

His first point was on the level of recovery, and he said that the NAO report states that only 26p in every £100 of profits that criminals made was confiscated in 2012-13. We have never recognised that 26p figure. However, the Government have made it plain in the Serious and Organised Crime Strategy that more should be done to attack criminal finances. That is why we are seeking to amend the Proceeds of Crime Act to significantly strengthen sentences for those who refuse to pay off their orders, to enable restraint orders to be made more quickly and easily and to tackle third-party claims. These are quite important aspects in dealing with that point.

The Government’s approach is not restricted to legislation. The Criminal Finances Board, which is chaired by the Minister for Modern Slavery and Organised Crime, is also working across government, law enforcement agencies and prosecution agencies to improve performance and make it harder for criminals to move, hide and use the proceeds of crime. The noble Lord asked about international asset recovery, which is a very important aspect of recovering proceeds of crime. The UK does not require a formal international agreement to be able to co-operate with another country in respect of freezing, confiscating and sharing or repatriating the proceeds of crime because it has 37 bilateral mutual legal assistance agreements. However, as part of the cross-Whitehall asset recovery international strategy, the CPS has posted specialist asset recovery advisers to Spain and the UAE. Two further asset recovery advisers have taken up posts covering Europe and the Caribbean, and another asset recovery adviser will soon be in place in South Africa. We are also at the point of ratifying the most recent Council of Europe convention relating to money-laundering, confiscation and financial investigations.

The noble Lord asked about comments by the NCA director, Keith Bristow, and his expectation of only £124 million being recovered out of the £1.46 billion outstanding from confiscation orders. The Government are implementing a multiagency criminal finances improvement plan to recover assets more effectively, and to tackle the £1.5 billion stock of outstanding confiscation orders, including by concentrating enforcement action on the priority confiscation order cases, and we have recovered £40 million so far. We are working more closely with the financial sector and deploying specialist CPS asset recovery advisers to improve the recovery of criminal assets from overseas, while provisions in the Serious Crime Bill will substantially increase the penalties for those who refuse to pay their confiscation orders.

The Serious Crime Bill will make it easier for prosecutors to freeze assets earlier in an investigation and to take money held in bank accounts to satisfy confiscation orders. It will also require judges to consider imposing travel bans. Asset freezing and recovery is a very effective tool for disrupting organised crime groups. Performance is not just about the amounts recovered; it is about the amounts denied to criminals so that money cannot be used to further fund criminality.

The noble Lord’s fourth question was on training and monitoring. The proceeds of crime centre in the NCA trains and closely monitors all financial investigations. They are among the most closely regulated investigations. The staff have to undertake ongoing training, passing continuous professional development, and they are reviewed fully every two years. I hope that that answers the noble Lord’s questions. If there are any outstanding questions then I will write to him, but in the mean time, I beg to move.

Motion agreed.