Proceeds of crime: system for enforcing confiscation orders is not working

MPs have warned that the system for enforcing confiscation orders imposed by the courts is not working.

The Home Affairs Select Committee published its Proceeds of Crime report this week,

The Proceeds of Crime Act 2002 (POCA) sets out the asset recovery scheme and other powers under which the government can seize the proceeds of a criminal’s activities. In 2014-15, £155m was collected by enforcement agencies. POCA has come under fire in the media for poor performance, for example, only £203m of £1.6bn in unenforced confiscation orders was deemed enforceable. Other examples cited in the press included a “Mr Big” paying £44,000 in private school fees while ignoring an outstanding £4m confiscation order, and criminals choosing to serve time in prison rather than pay back the proceeds of their crimes.

The MPs reported that preventing money laundering was “particularly pertinent” to effective recovery of proceeds of crime because investigators, prosecutors, courts and enforcement agencies were otherwise rendered powerless. The executive director of Transparency International UK, Robert Barrington, told the committee that at least £100bn was laundered through the UK each year—equivalent to about twice the size of Panama’s whole economy. Barrington said this was partly because of the UK’s historic links with the Overseas Territories and Crown Dependencies, which made it easy to set up shell companies.

Barrington said the supervisory system responsible for monitoring money laundering was not fit for purpose—it had 27 different supervisory bodies, some of whom were trade bodies with conflict of interest as they both regulated and promoted their members. He recommended a single “super-supervisor”.

The MPs recommended that enforcement of POCA remain at a local level but that the National Crime Agency be made the lead agency.

However, Raj Chada, criminal defence partner at Hodge Jones & Allen, says: “The confiscation regime itself is already extraordinarily draconian.

“The way that the final figure for ‘confiscation’ is worked out is often far in excess of the actual amount that was gained by the defendant during his or her criminal conduct. That anomaly is a product of the rules used to work those figures out. I have no doubt that in part, the lack of enforcement orders is because the orders themselves are excessive in the first place.”