Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) Order 2018

Lord Young of Cookham Excerpts

Tuesday 5th December 2017 Lords Chamber

Moved by

[Lord Young of Cookham]

That the draft orders and regulations laid before the House on 23 October be approved.

[Lord Young of Cookham (Con)]

My Lords, we know that criminals are increasingly adept at finding new ways to hide the proceeds of crime. That is why, earlier this year, we legislated through the Criminal Finances Act to provide law enforcement agencies with new powers to strengthen and extend existing powers to trace and recover criminal assets. Most relevant for the purposes of this debate are new powers to seize and forfeit assets such as precious metals, precious stones and artistic works.

Codes of practice protect the public by ensuring appropriate and proportionate use of new powers. In this case, they include search and seizure powers, which are used by a wide range of law enforcement officers in connection with various investigations.

Three of the statutory instruments put before the House today bring into force revised and new codes of practice providing guidance on the use of Proceeds of Crime Act—POCA—powers for the search, seizure and detention of property to support enforcement of confiscation orders; on search powers for cash that is suspected to be unlawful in origin or purpose; and on search powers relating to the new power to seize certain listed assets. The final instrument makes a minor and technical amendment to an existing provision in POCA to take account of the creation of the new power to forfeit listed assets.

POCA provides strong powers for the fight against crime, and particularly against serious and organised crime. These powers may involve significant interference with the privacy and property of persons suspected of certain offences, and the purpose of these codes of practice is to guide law enforcement officers in the lawful and proportionate exercise of the powers. They are therefore a safeguard to ensure effective and consistent use of the powers.

The POCA powers available to law enforcement have been significantly strengthened by the Criminal Finances Act 2017. Once commenced, the new powers will give officers important new tools for the recovery of criminally obtained assets, thus playing a key role in the Government’s commitment to make the UK a more hostile environment for those who seek to move, hide and use the proceeds of crime and corruption.

Noble Lords may recall that when this legislation was undergoing its parliamentary passage, the Northern Ireland Assembly was dissolved. That meant that a legislative consent Motion could not be obtained. The Minister for Security made a commitment in the other place not to commence any legislation relating to devolved matters without the appropriate consent in place. Keeping with that commitment, the new and amended POCA powers to which the codes relate will not, initially, be commenced in Northern Ireland. As a consequence, the necessary rules of court, and equivalent codes of practice governing devolved functions, will not be in place.

We are working with the authorities in Northern Ireland to commence these powers as soon as possible. Codes of practice are currently in use in Northern Ireland in respect of existing powers in the Proceeds of Crime Act 2002. The new powers and the amendments to existing powers in the Criminal Finances Act 2017 will not be commenced in Northern Ireland until a legislative consent Motion can be obtained. As a result, the codes that are laid before noble Lords in so far as they apply to Northern Ireland will continue to make provision for the existing POCA powers but not for the amendments and new powers in the Criminal Finances Act 2017.

In Scotland, a separate—combined—code of practice has been drafted in respect of searches by constables in relation to the civil forfeiture of listed items of property and the civil forfeiture of cash. A public consultation is being undertaken. The code is expected to come into force in the spring.

Two of the codes before noble Lords are revisions of previous codes issued under POCA and closely follow those issued to police officers under the Police and Criminal Evidence Act 1984. The third code is new, but it, too, is modelled on the PACE procedure. The codes provide an important safeguard and reassurance that the powers in POCA are being used appropriately and proportionately.

The new powers giving rise to these codes have already been approved and debated extensively by both Houses. We are therefore not debating the powers themselves today; rather, we are considering the codes which give guidance on their use.

The amendments to POCA which require the new and amended codes of practice are: the new power to forfeit listed assets such as precious metals, precious stones and artworks; the expanded powers relating to search and seizure to prevent the dissipation of property that may subsequently be used to satisfy a confiscation order; the extension of search powers to a range of law enforcement agencies, notably the Serious Fraud Office; and the extension of the definition of “cash” for the purposes of cash seizure and forfeiture powers to include gaming vouchers, fixed-value casino tokens and betting receipts.

POCA stipulates that the Secretary of State must prepare and publish a draft of any new or revised code, consider any representations made and modify the draft as appropriate. A public consultation on all the codes before your Lordships was carried out this summer, and amendments were made to the drafts accordingly. The responses were generally supportive of the codes of practice but contained certain specific suggestions or recommendations that we were able to address.

The first order brings into effect a new code of practice providing guidance on the use of search powers for the recovery of listed assets, such as precious metals and stones, that are suspected of being unlawful in origin or purpose. In essence, this builds on the existing powers relating to the forfeiture of criminal cash.

--- Later in debate ---

[Lord Paddick (LD)]

My Lords, we also support these instruments and see the importance of extending the ability to recover criminal assets to precious metal and precious stones. There is a serious concern in some communities, for example with drug dealers who display their wealth ostentatiously, that young people should not be encouraged to go down that route by such behaviour. The police and other law enforcement agencies sometimes have difficulty in proving substantive offences against such people, so for them to be able to seize such precious metal and precious stones where people are not able legitimately to account for them is an extremely important move.

It is a concern that these powers will not be able to be commenced in Northern Ireland. This highlights again the importance of Northern Ireland in matters that the country is concerned with at this time.

It is important that these agencies have the necessary resources to implement the powers to which these codes of practice relate. While it is possible that fewer resources will be required to seize assets than would be necessary to prove sometimes difficult substantive offences against the individual, we are content with these instruments.

[Lord Young of Cookham]

My Lords, I am grateful to both noble Lords for their support for these measures, and I will try as best I can to answer the questions raised. I can confirm that the powers cannot be applied to G4S. I repeat the assurance my ministerial colleague gave yesterday in another place.

Questions were raised about Northern Ireland. As I explained when I introduced the order, the new powers and the amendments to existing powers in the Criminal Finances Act 2017 will not be commenced in Northern Ireland until a legislative consent Motion can be obtained. As a result, the codes that are laid before the House, in so far as they apply to Northern Ireland, will continue to make provision for the existing POCA powers, but not for the amendments and the new powers in the Criminal Finances Act. In answer to the question about how this is done, the statutory instruments will apply the codes in Northern Ireland and the limitation I have just referred to is in the wording of the codes themselves rather than in the statutory instruments that bring the codes into force. The approach we have taken in drafting the codes is that it is clear in the wording that guidance on the new powers introduced by the Criminal Finances Act will not apply to Northern Ireland for the reasons that I have just given. It is clear, however, that the rest of the code that provides guidance on the use of existing powers will apply to Northern Ireland. If it would help both noble Lords, I would be happy to drop them a line explaining which bits apply now and which bits will apply later.

In answer to the question about who we are corresponding with, I imagine we are corresponding at official level within Northern Ireland. If and when an LCM is obtained from the Assembly, the codes will be revised to remove the restrictions in relation to Northern Ireland. In response to the noble Lord, Lord Rosser, this will require further consultation and debates in Parliament, and the revised codes will be brought into force by further statutory instruments, so we will go round the course again.

I have here a list of which sections of POCA relate to England and Wales and which extend to Northern Ireland. Rather than read it out—it is long and complicated—I think it would be best if, as I said a few moments ago, I wrote to noble Lords and placed a copy of the letter in the Library.

[Lord Rosser]

I thank the Minister for that. It will be extremely helpful. In writing that letter, will the Minister set out whether the fact that the provisions will not apply in Northern Ireland at this stage, and may not apply there for some time, will have any detrimental effect on their application in Great Britain as opposed to Northern Ireland? I am not entirely clear what the detrimental effects will be for Northern Ireland or for Great Britain of the provisions of these instruments not being applicable in Northern Ireland until some date that is not yet known.

[Lord Young of Cookham]

It would clearly have been better if there had been a Northern Ireland Assembly in operation and we could have got an LCM and extended the powers throughout the United Kingdom. As we cannot extend them to Northern Ireland, some of the new provisions that were introduced in the Criminal Finances Act earlier this year will not immediately be applicable to Northern Ireland. To that extent, therefore, the Act will not be as effective as we initially hoped. However, it will come into effect in the rest of the United Kingdom, and the terrorist financing amendments will commence as that is a reserved matter, not a devolved matter.

I was asked about resources and whether these powers will place more resource burdens on law enforcement at a time of pressure. These powers extend and strengthen the powers in POCA. They add to the toolkit, rather than being powers to use in isolation. As such, they may be used in a strategic fashion that may save money.

The powers are making the use of POCA more effective and more streamlined. In addition, due to the terms of the asset recovery incentivisation scheme, the more an agency recovers, the more it receives. In the past two years, we have amended the scheme that distributes the money recovered under POCA. A £5 million topslice of the amounts recovered is now available for bidding for national schemes to support further asset recovery work. In addition, where more than £184 million is recovered, under the old terms of the asset recovery incentivisation scheme, the Home Office will return 50% above that threshold to the regional organised crime units.

I hope I have been able to address the issues raised in this short debate and repeat that I am grateful for the broad support. I beg to move.

Motions agreed.