My Lords, first I thank the noble Baroness and also my noble friend for their warm welcome to this role. I will do my very best to try to ensure that I answer as fully as possible the very serious points which they made.
I will commence with the points raised by the noble Lord, Lord Warner, and to some extent the points raised by the noble Baroness, Lady Butler-Sloss, in relation to the Modern Slavery Bill. As these Bills were drafted and conceived, and as they move through the legislative process, they are seen very much as two parts of an attempt to address the problem of human trafficking and the gangs that seek to profit from that. They also seek to ensure that those gangs are unable to hide away the funds which they amass from the misery they afflict on others. On that we are absolutely united. I would also say to the noble Lord, Lord Warner, that we set out a number of points in a detailed letter which was drafted and sent to his noble friend the noble Baroness, Lady Smith of Basildon, on 7 October.
A copy has been placed in the Library but it might be helpful, as part of my response to the debate, if I place some of the remarks from it on the record in this House.
In responding to Amendment 4, let me first say that we share the objective underpinning this amendment, namely to further strengthen the effectiveness of the asset recovery regime provided for in the Proceeds of Crime Act. It is also worth noting at this point that, under this Government, more than £746 million of criminal assets have been seized through all four current methods of recovery, which in itself is a record amount. I know it is not getting anywhere near to addressing the full scale of the problem but it shows that the law enforcement of the courts is having some effect. Of course we want to do even better. One of the aims of the Government’s serious and organised crime strategy is to crack down on those who do not pay their confiscation orders. As part of this, the criminal finances improvement plan aims to look at ways to improve the recovery of the proceeds of crime.
The amendment calls for consultation on ways to strengthen the legal framework as set out in the Proceeds of Crime Act. Part 1 of this Bill is the product of just such a consultation. It already includes significant reforms to the asset recovery regime. I do not for a moment suggest that these provisions are the last word in terms of changes to POCA—if I may use that acronym for the Proceeds of Crime Act. We remain open to further constructive suggestions, which was very much what the noble Baroness asked us to do. We remain open to suggestions and to having a constructive dialogue over what improvements can be made with, among others, the National Crime Agency, police forces, the Crown Prosecution Service and Her Majesty’s Courts and Tribunals Service.
Let me turn to the specific proposals contained in Amendment 4. First, the amendment calls for a change in the test for securing a restraint order. Clause 11 already reduces the legal test for obtaining such an order from “reasonable cause to believe” that the alleged offender has benefited from his criminal conduct to “reasonable grounds to suspect”. This was a point that the noble Lord, Lord Warner, also touched upon. That will enable restraint orders to be secured earlier in an investigation. We remain at this stage unpersuaded of the case for removing the requirement to show that there is a real risk that the defendant will dissipate his or her assets. Such a test goes to the heart of the purpose of a restraint order. If there was no such risk, there would be nothing to be gained from seeking a restraint order.
3.45 pm
Moreover, we believe that it would be extremely difficult for a defendant to prove a negative to a court, namely that they do not intend to dissipate their assets. In contrast, an investigator is able to show by the steps an individual is taking that they have the ability and intention to dissipate. Furthermore, we should not lose sight of the fact that a restraint order is generally obtained from a court in the individual’s absence, before they are arrested, and so they would not be afforded the opportunity to prove that they
have no intention of dissipating. Indeed, in the letter to the noble Baroness of 7 October to which I referred earlier, I made the point that often when the restraint order is applied for, the individuals are not aware. If there was a requirement to place an additional responsibility to come forward at that stage, there is of course a risk that that might alert people to the fact that an investigation is under way.
On the noble Baroness’s second proposal, we agree in principle that any reimbursement of the defendant’s costs that arise from a restraint hearing should be capped at legal aid rates. New primary legislation will not be required to effect this change, as provision could be made under the Criminal Procedure Rules. We have consulted the CPS on this issue already, as any change to the rates would need to be applied even-handedly to them when recovering costs. We now intend to consult the Criminal Procedure Rule Committee on this matter.
The amendment next calls for the court to have the power to require a defendant to disclose any interests in realisable property. Clause 2 of the Bill already provides that the prosecutor and defendant must detail any known third-party interest in property linked to the defendant. That information will be used by the court to consider whether to make a determination as to the defendant’s interest in property. As I have already explained, Amendment 1 will empower the court to require a third party to provide any information it believes is necessary to assist it in making such a determination. Taken together, these provisions will enable the Crown Court to deal with claims from third parties at the same time as it makes the confiscation order. Those changes to POCA ensure that all assets and claims against them may be considered thoroughly in one court hearing, and earlier in the process than is currently the case.
The fourth issue raised by the noble Baroness’s amendment concerns the court’s powers to compel a defendant to return to the UK realisable liquid assets held overseas, and she is right to express that concern. Again, a number of provisions in the Bill address this issue. Clause 7 makes provision for compliance orders. Those will allow the court to impose any restrictions, prohibitions or requirements it believes appropriate to ensure that the defendant pays a confiscation order and that the order is effective. Any compliance order will be made at the time a confiscation order is granted. A compliance order will be capable of being used by the court to order the defendant to return assets to the UK from overseas. Breach of such an order will be a contempt of court. The Act already confers on the Crown Court the power to make such order as it believes is appropriate for the purposes of ensuring that a restraint order is effective. A restraint order can be obtained at a significantly earlier stage; for example, before the defendant has been charged. The requirement to compel a defendant to return property to the UK is therefore already available under a restraint order.
Finally, the amendment seeks ways to improve international co-operation in the recovery of the proceeds of crime. This was one of the issues specifically addressed in the serious and organised crime strategy. The UK is engaging with key countries to encourage and improve
international co-operation in asset recovery, which we accept has historically been very poor. We have already engaged with Spain, China and the United Arab Emirates, and will be working with the FCO and the CPS to negotiate further agreements and understanding with other key countries, including Romania, South Africa and Ghana. These agreements will relate to asset sharing. The long-standing international position is that the country that enforces an overseas order in its jurisdiction gets to keep the confiscated assets. There is now a move towards sharing recovered assets, particularly where there are identifiable victims who need to be compensated. We have recently had the first successful case involving the repatriation of assets totalling just over £300,000 to the UK with the assistance of the United Arab Emirates.
I believe that the tools for international recovery already provide for successful co-operation between the UK and our overseas counterparts. However, as I have already acknowledged, the tools have historically been underused, both here and overseas. This has undoubtedly improved in the last year or two, but more could be done to encourage the use of these powers. The bilateral agreements that we have recently concluded and are seeking to negotiate with priority countries should have the effect of improving co-operation overseas. In addition, the CPS is seeking to post five dedicated asset recovery advisers overseas, starting with Spain and the UAE. The CPS will provide targeted assistance to international colleagues from the UK or through its network of overseas advisers where asset recovery advisers are not deployed.
The UK has, last month, signed the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism of 2005—the Warsaw convention. This will assist the UK in obtaining asset sharing agreements and in encouraging other jurisdictions to recognise UK civil recovery.
I hope that I have been able to demonstrate to the noble Baroness, and indeed to the House as a whole, that we have taken seriously the suggestions she has made for further improving asset recovery. As I have indicated, the Bill already directly addresses some of the issues raised by the amendment and we are now actively pursuing her suggestion in relation to the capping of legal costs.
I turn to the points raised by my noble friend Lady Hamwee in defence of the English language, in which she has such expertise and ability. She asked about the use of the word “thinks” in the context of the court in subsection (1) of new Section 18A. The words “thinks” and “believes” are used interchangeably throughout the Proceeds of Crime Act. For example, in Section 49(4)(f) the court may authorise the receiver to take any other steps the court thinks appropriate. In the context of new Section 18A of POCA, where a court is required to make a decision, we do not consider that there is any meaningful difference between “thinks” and “believes”. In subsection (4) of new Section 18A, the word “believes” is used for the sake of consistency with the existing Section 18(4). In subsection (1) of the
new section, we have used “thinks” as it seems to us to be the more natural word to use there; it would arguably look slightly odd to say,
“believes is or may be a person holding an interest in the property”.
I hope this reassures my noble friend that the wording of new Section 18A is clear and conveys the appropriate meaning.
The noble Baroness asked specifically how long people would have to respond to a compliance order. As regards an order made under new Section 18A, the specified time would be the time specified in the order by the court in the process which is set out, so that could vary from case to case. Obviously, the court will take due cognisance of the risks which might be involved in delaying the recovery of the assets which are identified.
I am conscious that this has been a lengthy response, but this is a very substantive amendment which raises a number of issues and I wanted to get my response to them on the record in order to help the House further.