Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2018
Proceeds of Crime Act 2002 (Recovery of Listed Assets: Code of Practice) (England and Wales and Scotland) Regulations 2018
Criminal Finances Act 2017 (Consequential Amendment) Regulations 2018
Motions to Approve
My Lords, we know that criminals are increasingly adept at finding new ways to hide the proceeds of crime. That is why, earlier this year, we legislated through the Criminal Finances Act to provide law enforcement agencies with new powers to strengthen and extend existing powers to trace and recover criminal assets. Most relevant for the purposes of this debate are new powers to seize and forfeit assets such as precious metals, precious stones and artistic works.
Codes of practice protect the public by ensuring appropriate and proportionate use of new powers. In this case, they include search and seizure powers, which are used by a wide range of law enforcement officers in connection with various investigations.
Three of the statutory instruments put before the House today bring into force revised and new codes of practice providing guidance on the use of Proceeds of Crime Act—POCA—powers for the search, seizure and detention of property to support enforcement of confiscation orders; on search powers for cash that is suspected to be unlawful in origin or purpose; and on search powers relating to the new power to seize certain listed assets. The final instrument makes a minor and technical amendment to an existing provision in POCA to take account of the creation of the new power to forfeit listed assets.
POCA provides strong powers for the fight against crime, and particularly against serious and organised crime. These powers may involve significant interference with the privacy and property of persons suspected of certain offences, and the purpose of these codes of practice is to guide law enforcement officers in the lawful and proportionate exercise of the powers. They are therefore a safeguard to ensure effective and consistent use of the powers.
The POCA powers available to law enforcement have been significantly strengthened by the Criminal Finances Act 2017. Once commenced, the new powers will give officers important new tools for the recovery of criminally obtained assets, thus playing a key role in the Government’s commitment to make the UK a more hostile environment for those who seek to move, hide and use the proceeds of crime and corruption.
Noble Lords may recall that when this legislation was undergoing its parliamentary passage, the Northern Ireland Assembly was dissolved. That meant that a legislative consent Motion could not be obtained. The Minister for Security made a commitment in the other place not to commence any legislation relating to devolved matters without the appropriate consent in place. Keeping with that commitment, the new and amended POCA powers to which the codes relate will not, initially, be commenced in Northern Ireland. As a consequence, the necessary rules of court, and equivalent codes of practice governing devolved functions, will not be in place.
We are working with the authorities in Northern Ireland to commence these powers as soon as possible. Codes of practice are currently in use in Northern Ireland in respect of existing powers in the Proceeds of Crime Act 2002. The new powers and the amendments to existing powers in the Criminal Finances Act 2017 will not be commenced in Northern Ireland until a legislative consent Motion can be obtained. As a result, the codes that are laid before noble Lords in so far as they apply to Northern Ireland will continue to make provision for the existing POCA powers but not for the amendments and new powers in the Criminal Finances Act 2017.
In Scotland, a separate—combined—code of practice has been drafted in respect of searches by constables in relation to the civil forfeiture of listed items of property and the civil forfeiture of cash. A public consultation is being undertaken. The code is expected to come into force in the spring.
Two of the codes before noble Lords are revisions of previous codes issued under POCA and closely follow those issued to police officers under the Police and Criminal Evidence Act 1984. The third code is new, but it, too, is modelled on the PACE procedure. The codes provide an important safeguard and reassurance that the powers in POCA are being used appropriately and proportionately.
The new powers giving rise to these codes have already been approved and debated extensively by both Houses. We are therefore not debating the powers themselves today; rather, we are considering the codes which give guidance on their use.
The amendments to POCA which require the new and amended codes of practice are: the new power to forfeit listed assets such as precious metals, precious stones and artworks; the expanded powers relating to search and seizure to prevent the dissipation of property that may subsequently be used to satisfy a confiscation order; the extension of search powers to a range of law enforcement agencies, notably the Serious Fraud Office; and the extension of the definition of “cash” for the purposes of cash seizure and forfeiture powers to include gaming vouchers, fixed-value casino tokens and betting receipts.
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. A public consultation on all the codes before your Lordships was carried out this summer, and amendments were made to the drafts accordingly. The responses were generally supportive of the codes of practice but contained certain specific suggestions or recommendations that we were able to address.
The first order brings into effect a new code of practice providing guidance on the use of search powers for the recovery of listed assets, such as precious metals and stones, that are suspected of being unlawful in origin or purpose. In essence, this builds on the existing powers relating to the forfeiture of criminal cash.
The second code of practice relates to search powers in England and Wales to prevent the dissipation of property that might be used to satisfy a confiscation order. This has been revised to take account of the extension of powers to the Serious Fraud Office—a direct result of the Criminal Finances Act, which amends the Proceeds of Crime Act—and the change to streamline the authorisation procedures for the use of the powers by certain civilian financial investigators. As a result, civilians can now get authorisation from police officers.
The final code relates to search powers that support the seizure and detention of cash. This is an update to the existing code and has been revised for three reasons: first, due to the addition of gaming vouchers, casino tokens and betting receipts to the instruments that can be forfeited under these powers; secondly, because of the extension of the search powers to SFO officers; and, thirdly, to provide that civilian staff in the police seek authorisation on the use of the search powers from police inspectors.
Collectively, the three orders will bring the codes of practice into effect, ensuring that effective, up-to-date safeguards are in place and enabling full commencement of the POCA amendments I have described. All the amendments arise from new powers introduced via the Criminal Finances Act 2017.
The last instrument makes a technical amendment to an existing provision in POCA. The approach in POCA, which I believe all noble Lords will all agree with, is that once property has been recovered under POCA it cannot then become subject to further recovery action under the Act, because this would be recovering the same property twice. As a consequence of the new forfeiture powers introduced by the Criminal Finances Act, further powers needed to be added to that safeguard. These regulations provide that property forfeited by the High Court under the new listed items powers cannot subsequently become liable to future civil recovery action.
The use of these powers will be guided by the revised codes of practice. They are an important safeguard to ensure the targeted, proportionate and effective use of POCA powers, balanced against the rights of individuals and communities. I beg to move.
I thank the Minister for that explanation of the purpose and content of the four orders we are considering, which we support. Clearly, they do not have quite the same attraction for Members of your Lordships’ House as the business we discussed prior to this, judging by the attendance in the Chamber at present.
The orders seek to ensure that powers are used appropriately and proportionately by those exercising them, as well as giving those exercising them the necessary powers to achieve the required objectives in recovering the proceeds of crime. As the Minister said, the orders bring into force revised codes of practice and one new code of practice, providing guidance and procedural requirements for the exercise of certain functions under the Proceeds of Crime Act 2002. The revised and new codes are required because of amendments to POCA made by the Criminal Finances Act 2017, which was passed last April—in the days when this Government had a working majority in the House of Commons and before this Government gave a certain large sum of money to secure a smooth, lasting and harmonious working relationship with the DUP.
That brings me to the issue of Northern Ireland and these orders. As the Minister said, a legislative consent Motion has not been obtained because the Northern Ireland Assembly was dissolved during the passage of the Criminal Finances Act. The Minister said that the Government were working with the authorities in Northern Ireland to commence the powers as soon as possible. Does this mean that further legislative measures are on the way or are such measures all covered by these orders? Which powers are the Government working with the authorities in Northern Ireland to commence there as soon as possible? Is it just the new powers and amendments made under the Criminal Finances Act 2017, to which the revised and new codes of practice we are discussing relate, or powers unconnected to these codes of practice? Who are the authorities in Northern Ireland to which the Minister referred? What are the actual or potential consequences on the effectiveness of the matters covered by the Criminal Finances Act in relation to proceeds of crime, not only in Northern Ireland but in Great Britain, of not being able to obtain a legislative consent Motion and bring them into operation on the intended day?
Since one of the orders apparently covers Northern Ireland—the Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2018—can the Minister say why that order includes Northern Ireland, in view of the issue over a legislative consent Motion not being obtainable? The Commons Minister stated when it was discussed there that,
“there is nothing in these codes relating to the new powers that is a devolved matter in the competence of the Northern Ireland Assembly ”.—[Official Report, Commons, Delegated Legislation Committee, 4/12/17; col. 4.]
Is the answer to the question I have raised that the order to which I refer covers an aspect of POCA that is not devolved?
A second point relates to the resources that will be available to ensure that the new powers and provisions in the Criminal Finances Act 2017, to which the revised codes relate, can be effectively implemented. For example, the codes cover the extension of certain authorities and powers to the Serious Fraud Office. There is also a new code of practice providing guidance, as the Minister said, on the use of search powers for the recovery of listed assets that are suspected to be the proceeds of crime or intended for use in crime. New codes are of little relevance if the resources are not there to bring their content into operation.
What steps have the Government taken recently to satisfy themselves that the necessary resources are available to implement effectively the powers and authorities to which these codes relate? What are the asset recovery rates of the agencies concerned, and how have those changed over the last five years? Do the agencies have a target figure they are expected to achieve and are they achieving it? Are the Government satisfied with the performance of the agencies concerned on asset recovery and, if not, what action is being taken? Finally, can the Government give an assurance that, since the codes refer, I believe, to immigration officers, among others, the important powers covered by these codes will not be conferred on outside bodies acting for the Government, such as G4S and Serco?
My Lords, we also support these instruments and see the importance of extending the ability to recover criminal assets to precious metal and precious stones. There is a serious concern in some communities, for example with drug dealers who display their wealth ostentatiously, that young people should not be encouraged to go down that route by such behaviour. The police and other law enforcement agencies sometimes have difficulty in proving substantive offences against such people, so for them to be able to seize such precious metal and precious stones where people are not able legitimately to account for them is an extremely important move.
It is a concern that these powers will not be able to be commenced in Northern Ireland. This highlights again the importance of Northern Ireland in matters that the country is concerned with at this time.
It is important that these agencies have the necessary resources to implement the powers to which these codes of practice relate. While it is possible that fewer resources will be required to seize assets than would be necessary to prove sometimes difficult substantive offences against the individual, we are content with these instruments.
My Lords, I am grateful to both noble Lords for their support for these measures, and I will try as best I can to answer the questions raised. I can confirm that the powers cannot be applied to G4S. I repeat the assurance my ministerial colleague gave yesterday in another place.
Questions were raised about Northern Ireland. As I explained when I introduced the order, the new powers and the amendments to existing powers in the Criminal Finances Act 2017 will not be commenced in Northern Ireland until a legislative consent Motion can be obtained. As a result, the codes that are laid before the House, in so far as they apply to Northern Ireland, will continue to make provision for the existing POCA powers, but not for the amendments and the new powers in the Criminal Finances Act. In answer to the question about how this is done, the statutory instruments will apply the codes in Northern Ireland and the limitation I have just referred to is in the wording of the codes themselves rather than in the statutory instruments that bring the codes into force. The approach we have taken in drafting the codes is that it is clear in the wording that guidance on the new powers introduced by the Criminal Finances Act will not apply to Northern Ireland for the reasons that I have just given. It is clear, however, that the rest of the code that provides guidance on the use of existing powers will apply to Northern Ireland. If it would help both noble Lords, I would be happy to drop them a line explaining which bits apply now and which bits will apply later.
In answer to the question about who we are corresponding with, I imagine we are corresponding at official level within Northern Ireland. If and when an LCM is obtained from the Assembly, the codes will be revised to remove the restrictions in relation to Northern Ireland. In response to the noble Lord, Lord Rosser, this will require further consultation and debates in Parliament, and the revised codes will be brought into force by further statutory instruments, so we will go round the course again.
I have here a list of which sections of POCA relate to England and Wales and which extend to Northern Ireland. Rather than read it out—it is long and complicated—I think it would be best if, as I said a few moments ago, I wrote to noble Lords and placed a copy of the letter in the Library.
I thank the Minister for that. It will be extremely helpful. In writing that letter, will the Minister set out whether the fact that the provisions will not apply in Northern Ireland at this stage, and may not apply there for some time, will have any detrimental effect on their application in Great Britain as opposed to Northern Ireland? I am not entirely clear what the detrimental effects will be for Northern Ireland or for Great Britain of the provisions of these instruments not being applicable in Northern Ireland until some date that is not yet known.
It would clearly have been better if there had been a Northern Ireland Assembly in operation and we could have got an LCM and extended the powers throughout the United Kingdom. As we cannot extend them to Northern Ireland, some of the new provisions that were introduced in the Criminal Finances Act earlier this year will not immediately be applicable to Northern Ireland. To that extent, therefore, the Act will not be as effective as we initially hoped. However, it will come into effect in the rest of the United Kingdom, and the terrorist financing amendments will commence as that is a reserved matter, not a devolved matter.
I was asked about resources and whether these powers will place more resource burdens on law enforcement at a time of pressure. These powers extend and strengthen the powers in POCA. They add to the toolkit, rather than being powers to use in isolation. As such, they may be used in a strategic fashion that may save money.
The powers are making the use of POCA more effective and more streamlined. In addition, due to the terms of the asset recovery incentivisation scheme, the more an agency recovers, the more it receives. In the past two years, we have amended the scheme that distributes the money recovered under POCA. A £5 million topslice of the amounts recovered is now available for bidding for national schemes to support further asset recovery work. In addition, where more than £184 million is recovered, under the old terms of the asset recovery incentivisation scheme, the Home Office will return 50% above that threshold to the regional organised crime units.
I hope I have been able to address the issues raised in this short debate and repeat that I am grateful for the broad support. I beg to move.