Proceeds of Crime

Charlie Elphicke Excerpts

Tuesday 12th June 2012 Commons Chamber

[James Brokenshire]

There is likely to be negotiation and discussion on the directive, as the right hon. Gentleman will know, given the manner in which such instruments are taken forward. However, given the significance of the existing powers and the way in which the regime has been tested before the courts, the key point is that because of the use of qualified majority voting, which I have mentioned, there is no guarantee that there will be the outcome that he suggests. The Government have taken the judgment that that risk is too high. On balance, we believe that not opting in at this stage is the better option. The risk to our civil recovery regime is simply too great, and I am not willing to take it, especially when operational partners have expressed such concern to us.

None the less, it is our intention to play an active part in the negotiation on the directive. Our experience on the recent human trafficking directive shows that the UK can have an influential voice, even when it does not opt in at the outset. In that case, we opted in to the directive at the post-adoption stage. The UK’s recognised experience and expertise in asset recovery will certainly help with the negotiations.

Our wider aim is to establish effective mutual recognition arrangements for both conviction-based and non-conviction-based confiscation orders. Although the draft directive adds nothing to our domestic asset recovery regime, mutual recognition arrangements could greatly improve our ability to recover the proceeds of crime held in other member states. The draft contains no proposal to establish an effective system for the mutual recognition of confiscation orders. Law enforcement partners say that they would welcome such proposals. The Government will consider how best to use our influence on that matter.

It is important to underline the comments of the Chair of the Home Affairs Committee on how mutual recognition can be a powerful tool. It is important to focus on that point. Indeed, the EU Select Committee in the other place has highlighted it as an issue with the directive and it needs careful attention.

[Charlie Elphicke (Dover) (Con)]

Is it not the case that there is bilateral mutual recognition in almost every case and that we do not necessarily need mutual recognition under the aegis of the European federal government in Brussels?

[James Brokenshire]

It is certainly true that bilateral arrangements can be structured. All that I am seeking to say is that negotiations on the directive provide the UK with an opportunity to have an influence. They do not affect our decision, reflected in the motion, not to opt in at this stage because of the serious risks and operational requirements that I have identified.

--- Later in debate ---

[Mr David Hanson (Delyn) (Lab)]

The nature of the debate has changed slightly since the initial discussions in another place some weeks ago. I welcome the opportunity to discuss the draft directive on the freezing and confiscation of the proceeds of crime in the European Union, and I am grateful to the Minister for his explanation of his view. He mentioned that the debate should have taken place before the recent recess and was pulled at the last minute. That might be for the reasons of operational advice that he gave, but I smell a bit of anti-Europeanism on the Conservative Back Benches—there is a slight whiff of concern about the EU encroaching on the House’s legislation. Perhaps that is one reason why the Minister has looked at the matter in more detail, but I accept at face value his indication that he has taken advice.

The directive seeks to harmonise national responses by laying down minimum rules for member states with respect to the freezing and confiscation of criminal assets. As the Minister knows, dissipating and converting the proceeds of crime into a variety of assets is one way in which criminal gangs and terrorist organisations operate. The process of uncovering such assets can be complex and difficult, and international co-operation is an indispensable tool in the recovery process.

Like the Minister, I welcome the promotion of cross-border responses. In order to be effective in tackling organised and other crime, we need to co-operate and strengthen our existing relationships with other states within the EU. The Commission believes that EU and international law remain underdeveloped and underutilised. Crime does not respect borders, and we must have a proactive cross-border approach.

I found myself agreeing with Lord Henley, the Minister in another place, who said on 22 May that the directive offers a valuable opportunity to raise the standard of asset recovery in the EU. The Minister has tonight indicated that we already have a strong UK provision on such matters. In fact, for the most part, the UK exceeds the requirements of the draft provisions, owing in no small part to the measures he mentioned, such as the Proceeds of Crime Act 2002, which was passed by the previous Government, and the Terrorist Asset-Freezing etc. Act 2010, which I supported as a Minister and saw through the House as a shadow Minister only a couple of years ago.

The Minister has noted that there are a range of figures, but around £560 million-worth of UK criminal assets are overseas. We need to look at how we recover those, because sums of that magnitude indicate that the Government can do more. Effective international co-operation is key.

I believe the directive will be an important tool in tackling serious organised crime, but I am willing to take at face value what the Minister has said. I would like further information on any concerns that have been expressed to him. He can share those either with the House or with me on—dare I say—a Privy Council basis, because I would like a flavour of them. Ultimately, I want an improvement in the asset recovery regime across Europe and international co-operation with our European partners to deal with this problem.

As the motion asks the House to take note of the document, it is important that we examine it. The European Scrutiny Committee highlighted a number of issues, including a range of matters on which there needed to be further work—I accept that these are for discussion—including the extent of criminal offences and the implications of article 8 on safeguards for the legal aid budget. There is a concern whether article 9 includes value-based confiscation, and a concern about articles 3 and 4 on the confiscation of the proceeds of crime, and on extending confiscation when the court

“‘finds it substantially more probable’ than not that these assets are derived from other similar crimes.”

There is concern about article 7.2, under which, in urgent cases, assets may be frozen prior to obtaining a court order, which is at odds with UK legislation. Article 7 requires member states to be able to freeze property that is in danger of being dissipated, hidden or transferred, as ordered by a court.

A range of issues were raised, including on article 11 and others, by members of the European Scrutiny Committee.

[Charlie Elphicke]

I am listening with care to the argument the right right hon. Gentleman puts to the House, but I am unclear on one thing: does he think we should opt in to the directive, yes or no?

[Mr Hanson]

I have said to the Minister that we believe that the directive is a positive development, as the Minister in the other place also said, only two weeks ago, and we should look at it in a positive way. I will take at face value the concerns that the Minister has raised this evening about operability and the advice that he has received from the agencies, but if the hon. Gentleman thinks that we should not opt in because of a wave of anti-European sentiment, that is a very different matter indeed. I will certainly be a positive European. We should have co-operation. I want to see co-operation between states. I also want the European Union to take powers to take the assets of criminals abroad who are operating and making profits in this country. That would not be a bad thing. I would very much welcome further discussions with the Minister about the points that he has raised, but in principle I have no objection to a Europe-wide document helping to support this approach and enshrine improvements on what we currently have in British law.