A Guide to The Proceeds of Crime Act

What are the Proceeds of Crime?

Proceeds of Crime are the assets gained by criminals during the span of their criminal activity. This can be assets such as money, properties, or businesses. The authorities have the power to confiscate these assets procured through crime to deter future criminals. CPS states that “By taking out the profits that fund crime, we can help disrupt the cycle and prevent further offences.”

What is the Proceeds of Crime Act?

The Proceeds of Crime Act 2002 (“POCA”) is a legislative scheme to recover criminal assets. Of the powers that come with POCA, the most used is criminal confiscation. In most situations, confiscation takes place after a conviction. However, the authorities can use alternative powers for recovering the proceeds of crime which do not require a conviction. These are as follows:

Civil Recovery

Civil recovery is a High Court civil action brought under Part 5 of the Proceeds of Crime Act. It allows authorities to seek and seize the assets of a company or an individual that they believe to be the proceeds of a crime.

Civil recovery can be used when it is not possible for the court to obtain a conviction. However, it can also be used if a conviction is obtained. This is if a civil recovery serves the public interest rather than using a confiscation order. Examples of this happening are where the suspect has fled abroad to escape investigations. Civil recovery can also be used if the criminal activity has happened overseas and therefore cannot be prosecuted in the UK courts.

Therefore, civil recovery proceedings can be brought by UK authorities against assets anywhere in the world as long as the assets are under UK jurisdiction. Civil recovery can be brought against a corporate or individual that has no direct involvement in the crimes but has benefited from them.

Civil recovery has become increasingly popular amongst authorities due to new legislation introduced in the last two decades. This gives authorities new ways to retrieve assets without the need of a criminal conviction. 

What to Do if You are Facing Civil Recovery?

Whether you are an individual or part of an organisation facing civil recovery, the best course of action to take is to seek immediate legal advice from solicitors specialised in the Proceeds of Crime Act.

Cash Seizure

The authorities may seize cash or demand that the cash is forfeited. This is to stop a person from benefitting from their crimes. Alternatively, it can be used to stop money from being illegally used.

Since 2002, the authorities are permitted to seize cash of or more than £1,000. Cash can be seized from someone who is entering the UK or who is already in the UK if the cash has come from a criminal act or is to be used illegally.

The cash that is seized is usually only held for up to 48 hours unless the court states it can be held for longer. The cash is normally held in an account that carries interest until court proceedings have finished.

During court proceedings, the prosecution has to prove that the cash was used illegally. Alternatively, they need to prove the money was going to be used illegally ‘beyond a reasonable doubt.’

Cash Forfeiture

Alternatively, to cash seize is cash forfeiture. This is a civil matter where the court can order the cash to be forfeited to the court if they can prove that it was ‘more likely than not’ that the cash was illegal or going to be used illegally.

 What to Do if You are Facing Cash Forfeiture?

Cash seizure or forfeiture can be highly distressing for you, your family or your business therefore, it is important to assure you have the proper legal advice and representation.

If you are facing an investigation and a decision has been made to seize your cash you may be unsure what step to take next and what power the prosecutors have.

Our criminal defence solicitors can provide you with quick and expert legal advice. You will need to know quickly whether the seizure or forfeiture was legal and whether there’s a possibility of challenging it. Our solicitors will also help you understand the likelihood of having your assets returned.

Taxation Powers

POCA provides the National Crime Agency (NCA) with revenue functions. This allows them to make tax assessments where the source of income cannot be identified and is suspected to be a criminal asset.

The NCA uses taxation powers to carry out tax investigations. Additionally, they can raise a tax demand where there is a reasonable suspicion that the income has been gained by criminal conduct. These powers are different from those used by HM Revenue and Customs. The NCA may only become involved in the following areas of tax investigations: income tax, capital gains tax, corporation tax, national insurance contributions, statutory sick pay, statutory maternity pay, statutory paternity pay, statutory adoption pay, or student loans.

How Much Will I Pay Under a Confiscation Order?

Once your assets have been seized, the next step in the POCA process is to determine how much you should pay under the confiscation order. A confiscation order allows the Crown Court to call for a convicted defendant to pay an amount of money to HMCTS immediately or in a fixed period.

For a confiscation order to happen two figures are calculated. These are the benefit figure and the available amount.

• The benefit figures are the amount that that the defendant has gained because of criminal activity.
• The available amount if the funds, assets, or property that the defendant owns at the time of prosecution.

By using both these figures, a final figure be calculated. This is called the recoverable amount. Next, the confiscation order is created in the sum of recoverable amount. This is equal to the defendant’s benefit from their criminal activity, or the benefit figure, and this amount is usually used for the confiscation order.

In cases where the benefit figure is greater than the available amount, the available amount will be how much is recovered.

What if I Can’t Pay the Confiscation Order?

The confiscation order can be extended for up to six months. This is if, within a year of the order, the defendant shows the court that there is an exceptional circumstance

Will I Have to Go to Court for POCA?

You may need to go to court if no agreement can be reached in regard to your financial benefit from the confiscated amount. Before a POCA court hearing, evidence will be collected from you, and your reprehensive criminal defence solicitor.

What is the Proceeds of Crime Act Negligence Test?

The Proceeds of Crime negligence test relates to someone that is working in a regulated sector. This includes jobs such as banking or other financial services. This person can be convicted if they fail to disclose money laundering. This can happen if there are “reasonable grounds for knowing or suspecting” that money laundering is occurring where they work.  If a person has reason to suspect money laundering and does not report it, they could face five years of imprisonment.

Proceeds of Crime Act Sentencing

The maximum prison sentence for POCA conviction is 14 years. This relates to crimes valued at over £1 million. However, sentencing for POCA may vary depending on the amount of money ordered to be paid under the confiscation order. For times when a defendant cannot meet the terms of the confiscation order, a default sentence is set.

The maximum terms and default sentences are:

• Firstly, for £10,000 or less of money to be paid, the maximum terms of POCA sentencing is 6 months.
• For £10,000 but no more than £500,000 to be paid, the maximum terms of POCA sentencing is 5 years.
• For £500,000 but no more than £1 million to be paid, the maximum terms of POCA sentencing is 7 years.
• Finally, for more than £1 million to be paid, the maximum terms of POCA sentencing is 14 years.

Our criminal defence solicitors are highly experienced in the field of POCA and are here to represent and guide you through the court proceedings and appeals.