The Criminal Finances Bill proposes various amendments to the Proceeds of Crime Act 2002 which deals with civil recovery. Sundeep Soor, Head of Fraud and Tax at Cartwright King Solicitors outlines what these are in this article.
Cartwright King have successfully acted for numerous businesses and individuals in relation to cash seizure, detention and forfeiture cases. New provisions extend detention and forfeiture beyond cash. Similar provisions proposed will affect monies in bank or building society accounts which would involve these accounts initially being ‘frozen’ for up to 2 years.
The authority would need to show initially that ‘reasonable grounds’ exist to show that the monies are suspected to be ‘recoverable property’ or is suspected to be intended for use in crime. Once the investigation is concluded an application for the forfeiture of the funds would be made and ordered if the court is satisfied that the cash is ‘recoverable property’ or is intended for use in crime.
The individual or business will be allowed in certain situations to access part of the frozen funds, for example, to meet living expenses or to allow the running of a business. Surprisingly there is proposed provision to allow the funds to be used to meet appropriate legal costs. This is in contrast to criminal Restraint Orders or civil Cash Seizures where release of funds for legal fees is not currently permitted.
Unexplained wealth orders
New powers are to be given to authorities during the investigation stage to require an individual to set out the nature and extent of their interest in property where the value is greater than £100,000. This would be applicable where the individual's known income did not explain ownership of that property. Interim freezing orders (to prevent dissipation) could also be put in place whilst the application is considered by the High Court.
Applications for ‘unexplained wealth orders’ would be made to the High Court, who would need to be satisfied either that there were reasonable grounds for suspecting that the respondent is, or has been, involved in serious crime (or a person connected with the respondent is, or has been, so involved) or that the respondent was an overseas ‘politically exposed person’.
Where a person provided information in response to an ‘unexplained wealth order’ the authority may use that information as a basis for civil recovery proceedings or in connection with any criminal confiscation proceedings. Failure to provide a response (without reasonable excuse) to the unexplained wealth order could result in a presumption that the property is recoverable in civil recovery proceedings.
Where a person failed to provide information in response to an ‘unexplained wealth order’ (without reasonable excuse) there would be a rebuttable presumption that the property in question is ‘recoverable property’ for the purposes of any civil recovery proceedings taken subsequently.
Cartwright King can assist businesses and individuals with all aspects of civil recovery and Business Defence issues. For more information, please contact Sundeep Soor on 0808 168 5550 or email Sundeep.Soor@cartwrightking.co.uk.