Proceeds of Crime Act 2002 (Investigations: Code of Practice) Order 2018

Lord Rosser Excerpts

Tuesday 5th December 2017 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, the three orders before your Lordships give effect to revised codes of practice, providing guidance on the use of investigatory powers in the Proceeds of Crime Act 2002—our old friend POCA—and on the use of powers in relation to “terrorist property” under the Anti-terrorism, Crime and Security Act 2001—ATCSA.

POCA and ATCSA provide strong powers in the fight against organised crime and terrorism, enabling investigations and the recovery of assets which are the proceeds of crime or which are used to fund terrorism. 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 those powers. They are therefore a safeguard to ensure effective and consistent use of the powers.

The codes may be revised, or new ones created, in the light of legislative changes, and the revised codes now before your Lordships reflect the changes made to POCA and ATCSA by the Criminal Finances Act 2017. I ask noble Lords to note that two of these codes relate to POCA: one contains guidance for law enforcement officers and is issued by the Secretary of State, while the other contains guidance for prosecutors and is issued by the Attorney-General. The third code relates to ATCSA and contains guidance for officers, and is issued by the Secretary of State.

The three codes build on previous codes issued under POCA and ATCSA and closely follow those issued to police officers under the Police and Criminal Evidence Act 1984. The POCA and ATCSA powers available to law enforcement have been significantly strengthened by the Criminal Finances Act 2017. The codes need to be updated as a consequence of these amendments. Once commenced, the new powers will give officers important new tools to assist with investigations and with the recovery of assets. This is a key part of the Government’s commitment to tackling all levels of crime.

Noble Lords may find it helpful if I clarify the territorial extent of the powers subject to the codes of practice we are considering today. Noble Lords may recall that when this legislation was undergoing its parliamentary passage, the Northern Ireland Assembly was dissolved, which 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.

I assure noble Lords that we are working with the authorities in Northern Ireland to commence these powers as soon as possible. For the time being, however, the codes, in so far as they apply to Northern Ireland, will cover only existing POCA powers. The new powers for terrorist financing will be commenced in Northern Ireland, since terrorist financing, as I said a moment ago, is a reserved matter. The ATCSA provisions apply across the whole of the UK and thus include Scotland. The POCA provisions to which these codes relate are for England and Wales and Northern Ireland only, and do not extend to Scotland.

We plan to commence the majority of the new and amended POCA and ATCSA powers on 31 January 2018. Once approved, the codes before your Lordships will come into operation at the same time, enabling the full operation of the powers. Of course, the powers to which the amended codes relate have already been debated by your Lordships, and the Criminal Finances Act received Royal Assent in April. Again, therefore, we are not debating the powers themselves today: rather, we are considering the codes which give guidance on the use of those powers.

Briefly, the amended codes of practice are required as a result of the introduction of new investigation powers and some amendments and extensions of existing ones, and new seizure, detention and forfeiture powers under ATCSA. POCA and ATCSA stipulate 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. I can assure noble Lords that a public consultation has been undertaken on all the codes that I am referring to today.

One order gives effect to a revised code of practice providing guidance on the use of powers of investigation by law enforcement officers under Chapter 2 of Part 8 of POCA.

The revised code caters for new and amended powers introduced by the Criminal Finances Act, including unexplained wealth orders and changes to the way in which disclosure orders may be applied for and used. UWOs will enable an enforcement authority to require an individual or company to specify how property in the order was obtained, and may state that specific documents or information are to be provided in order to establish whether certain assets have been legitimately obtained.

The section relating to disclosure orders has been significantly revised. In addition to confiscation and civil recovery investigations, appropriate officers will now be able to apply for disclosure orders in a money-laundering investigation. In addition, the code includes the exercise of investigation powers in two new categories of investigation that were introduced by the Criminal Finances Act: namely, detained property investigations and frozen fund investigations. These new investigations support the new powers to forfeit certain listed items of property, such as precious metals and stones, and to forfeit funds in bank or building society accounts where the relevant property derives from or is intended for use in unlawful conduct.

Persons who may apply for these orders are clearly set out in the revised code, as are the procedure and statutory requirements for applying. The code also highlights the points that enforcement authorities and appropriate officers should consider before making an application.

There is a similar investigation code providing guidance for prosecutors using powers under Chapter 2 of Part 8 of POCA, which is issued by the Attorney-General, and the order bringing that into effect is also before your Lordships today. I can assure noble Lords that the Attorney-General’s revised code mirrors the form and substance of the Home Secretary’s revised investigation code. As such, we are debating the codes jointly and, in this instance, I am speaking on behalf of the Attorney-General.

The third order gives effect to a revised code of practice, made under the Terrorism Act 2000, for officers exercising asset recovery powers conferred on them through the terrorist property provisions of Schedule 1 to ATCSA. This code has been updated to reflect the amendments made to the Terrorism Act—TAct—and ATCSA by Part 2 of the Criminal Finances Act 2017, including a new power to administratively forfeit terrorist cash and new civil recovery powers to seize, detain and forfeit listed terrorist assets and to freeze and forfeit terrorist money held in bank and building society accounts.

The orders before your Lordships will bring all the relevant codes of practice into effect, ensuring that effective, up-to-date safeguards are in place and enabling full commencement of the POCA and ATCSA amendments that I just described. We are working towards a common commencement date for the powers covered by these codes of 31 January 2018.

I make no apology for repeating the important point that the revised codes are an important safeguard to ensure the targeted, proportionate and effective use of the POCA and ATCSA powers. Among other things, the codes ensure that officers consider the rights of the individual and the community more widely and that they follow a structured process when arriving at a decision to use the relevant powers, and also when executing them. The codes also ensure that a full audit trail in relation to the use of the powers will be recorded. It is of note that the training which all investigators obtain from the NCA ensures that investigators are familiar with these codes.

The codes form an important safeguard which ensure that the powers are used in an effective, considered and targeted manner. I beg to move.

[Lord Rosser (Lab)]

I again thank the Minister for his explanation of the purpose and meaning of these orders. On the Proceeds of Crime Act 2002 (Investigations: Code of Practice) Order 2018, the Criminal Finances Act 2017 amended some investigation powers, introduced new powers and widened the definitions of an investigation for the purposes of POCA. Where relevant, those changes are reflected in the revisions to the code of practice. The same applies to the Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors: Code of Practice) Order 2018, which relates to the exercise of functions by the Director of Public Prosecutions, the director of the serious fraud squad and the Director of Public Prosecutions for Northern Ireland, as well as officers of the Serious Fraud Office.

In relation to the second order, paragraph 8 of the Explanatory Memorandum on the consultation outcome states:

“Two responses were received … and the draft code … was amended as appropriate”.


From where did the two responses come, and what changes were made to the draft code of practice in the light of those responses?

The Terrorism Act 2000 (Code of Practice for Authorised Officers) Order 2018 brings into force a revised code of practice, which will enable officers to discharge their functions in respect of existing terrorist asset provisions by including guidance on operational requirements for officers on the exercise of the various new powers created by the Criminal Finances Act 2017. I shall not ask about the content of the consultation responses primarily because, apparently, there were none. We support these orders.

[Lord Young of Cookham]

I am very grateful to the noble Lord for his support. I asked the same question as he did about the responses that we received to the consultation. I was told that they were technical and minor. I do not have at my fingertips the names of those who responded, or what the technical and minor changes were, but I shall, of course, write to the noble Lord when I have that information, which I hope he finds illuminating.