2
May
2024

What are the amendments to the Proceeds of Crime Act 2002?

Most of the changes will allow the extended list of agencies to seize any realisable property that may be used to satisfy a future confiscation order made against a defendant.

John Hartley | Head of Business Crime and Regulation

In December 2022, the Home Office began a consultation into whether the Proceeds of Crime Act 2002 (POCA) should be amended to extend certain investigatory powers granted to Accredited Financial Investigators to agencies such as police forces and the National Crime Agency, to certain other statutory bodies. 

Here, Partner and Head of Business Crime and Regulation, John Hartley and Jonathan Lennon of Doughty Street Chambers outline the changes to the POCA and what this may mean for the agencies and statutory bodies involved. 

When did the changes to the POCA take effect? 

The consultation ended on 1st March 2023 and the changes were included in the Economic Crime and Transparency Bill which became law in October 2023; with the changes to POCA taking effect from 26th April 2024. 

What do the changes to the POCA mean for the agencies involved? 

Essentially, most of the changes will allow the extended list of agencies to seize any realisable property that may be used to satisfy a future confiscation order made against a defendant (see e.g., s47C).  

This could be demonstrative of the Government’s commitment to increasing the value of realisable property at the earliest possible opportunity to avoid dissipation, whilst also freeing up the time and resources of local police and the National Crime Agency (NCA).  

The initial five proposed agencies were: 

  1. Security Industry Authority  
  2. Food Standards Agency  
  3. Environment Agency
  4. Public Sector Fraud Authority (Cabinet Office)
  5. Department for Work and Pensions  

The legislation in fact also conferred powers on two newly formed Government departments namely:  

  • The Department for Science, Innovation and Technology and;  
  • The Department for Energy Security and Net Zero  

The original five proposed agencies, despite having their own separate powers to prosecute criminal offences, either rely on other agencies designated with financial investigation powers – such as the National Crime Agency (NCA) or local police forces.  One reason was the lack of suitable qualified staff who could exercise the POCA powers to recover property said to be the proceeds of crime. 

Some of these agencies already had certain powers under POCA for financial investigations but curiously not the full suite. For example, the Environment Agency (EA), Food Standards Agency (FSA), Department for Work and Pensions (DWP) and the Security Industry Authority (SIA) could all have made applications to the Crown Court under the pre 26th April framework for a POCA Restraint Order to freeze any assets.  

However, none of those agencies had standalone powers to search and/or seize property connected to the investigation if they considered that property may be unavailable in the future. Until the recent changes those agencies had to rely on either the NCA or a local police force to carry out searches and seizures on their behalf. 

The new amendments will now allow those agencies to use their own resources to carry out search and seizure actions that are connected to a financial investigation and help identify assets that may be used to satisfy any future confiscation order – as opposed to freezing assets under a Restraint Order which may be derived from the proceeds of crime.  

The original five agencies proposed as a result of the consultation, have now been given those powers to seize and search as set out above.   

In addition, the Cabinet Office (in its capacity as acting for the Public Sector Fraud Authority), the Department for Science, Innovation and Technology and the Department for Energy Security and Net Zero have now been given powers to apply for Restraint Orders.  

The SIA – in addition to the Cabinet Office, Department for Science, Innovation and Technology and the Department for Energy Security and Net Zero have now also be given the following powers:  

  • Search for cash which may be considered to be recoverable property;  
  • Give notice, without a court order, of the forfeiture of any cash which has previously been detained by the Magistrates Court;  
  • Search for any seizable listed assets;  
  • Make an application for an account freezing order (AFO);  
  • Conduct investigations into detained cash;  
  • Conduct investigations into alleged money laundering   

The FSA, EA and DWP already had these powers. 

Adherence to procedural standards: The 48-hour rule 

The administrative power to seize property that may be the subject of a possible later confiscation order under s47C is tempered by the requirement that the agency can only detain the seized property for 48 hours. In that time, the agency must either apply for a Restraint Order in the Crown Court or secure an extension of the detention period from the Magistrates’ Court – which is limited to a maximum of 6 months (s47M). 

This 48-hour rule reflects the law in civil cash seizure and detention orders in Part 5 of POCA, which requires that the police/ HM Revenue and Customs (HMRC) etc can make an initial administrative detention of cash, but that must be extended, or not, by a Magistrates’ Court within 48 hours – failure to do so requires the return of the cash.  

In a recent case, HMRC failed to secure their detention order from the Magistrates’ Court until just after the 48-hour deadline. HMRC, aware of a potential challenge, then re-seized the cash to start the 48-hour clock again and try again at the Magistrates’ Court for a second ‘initial’ order extending the detention. The High Court found that there was nothing in the legislation to prevent that; see Kingdom Corp v Thames Magistrates’ Court and HMRC [2023] EWHC 3315 (Admin). At the time of drafting the Claimant is seeking to appeal this ruling.  

Given the extension of the agencies that now have a power of seizure, this case may be of some significance.  That said, those agencies would be well advised to at least attempt to adhere strictly to the 48-hour rule – until at least the Court of Appeal rules on the issue. 

For more information, check out the Government’s consultation on changes to bodies granted investigatory and other powers under the Proceeds of Crime Act 2002. 

If you’re a business or individual interested in discussing these changes further with our Business Crime and Regulation team, please contact John Hartley john.hartley@primaslaw.co.uk  

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