Proceeds of Crime: EUC Report

Baroness Hamwee Excerpts

Tuesday 22nd May 2012 Lords Chamber

[Baroness Hamwee]

My Lords, the whole House will be grateful to the noble Lord, Lord Hannay, and to his sub-committee. Even for a Europhobe, which I am emphatically not, it seemed to be a no-brainer. However, as I read the report, I realised that issues arise which make one consider the differences in approach between our law and procedures and those of other European states, and the overall principle of how far one should go in willing the means as well as the end. As has been said, we are talking about big crime, which is big business. The Explanatory Memorandum to the directive referred to it in what was very much a financial take on the situation, and to the position weakening,

“our ability to fight cross-border … crime”—

yes—and affecting,

“the functioning of the Internal Market by distorting competition with legitimate businesses”.

It also referred to depriving,

“national governments and the EU budget of tax revenues”.

I do not quarrel with that, but there is another dimension to this. There are real, human victims of serious, organised international crime and therefore the deterrence of confiscation is of great importance.

As we have heard, it is very hard to stay ahead on these matters. Criminals seem to manage to be ahead of agencies and I wonder whether harmonisation in the EU will drive the transfer of funds outside the EU. You do not have to go as far as somewhere such as Belize to get outside the EU. Following the money is rarely straightforward. People who have headed for bankruptcy on a rather smaller, more personal scale know well about trying to transfer assets so that they are not, they hope, liable to be seized. Again, the Explanatory Memorandum deals with this. Obviously, the directive does as well but I am afraid that I cannot claim to have read that.

Third-party confiscation raises some quite important issues. I was interested to see that the provision,

“requires third party confiscation to be available for the proceeds of crime or other property … received for a price lower than market value and that a reasonable person in the position of the third party would suspect to be derived from crime”,

which clarifies the “reasonable person” test. Given the sophistication of much organised crime, evasion is likely to be very sophisticated and there will be innocent third parties, so that gave me a little cause for concern. I was also worried about confiscation in the absence of conviction—something that we in this country, with our own legal traditions, would be particularly aware of. I was reassured by the explanation that this would be in very limited circumstances, where the court finds,

“that a person … is in possession of assets which are substantially more probable to be derived from other similar criminal activities than from other”,

non-criminal “activities”; and, importantly, that:

“The convicted person is given an effective possibility of rebutting … specific facts”,

and that there are rights of appeal. “Substantially more probable” is an interesting phrase and not one that we are that familiar with here. I do not know how it works with our recognised standards of proof but, reading it in a common-sense way, it seems to me to be somewhere between the balance of probabilities and beyond reasonable doubt.

The report makes the point, which has been made in the debate, that if we do not opt in it sends the wrong message to our partners about the Government’s attitude to international co-operation and that there are impacts beyond the subject matter. The report states:

“We have no doubt that the Government should opt in”.

Neither have I.