Investigative Powers & Cash Seizure: Proceeds Of Crime Guidance
Confirmed up to date 06/02/08
Principle
The powers of investigation available under Part 8 of the Proceeds of Crime Act 2002 (POCA) for the purpose of a criminal confiscation order include Production Orders, Search and Seizure Warrants, Customer Information Orders and Account Monitoring Orders. In addition, financial institutions make suspicious transaction reports (SARs) to the Serious Organised Crime Agency (SOCA), who in turn pass these on to financial investigators to make enquires. These provide a fruitful source of intelligence that may ultimately result in a successful prosecution with a confiscation order being made.
POCA expands and replaces the scheme set out in Part II of the Drug Trafficking Act 1994 which provides for the seizure and forfeiture of cash which is being imported into or exported from the United Kingdom, and which represents the proceeds of, or is intended for use in, drug trafficking. The new scheme applies to cash related to all unlawful conduct and also provides for the seizure of such cash inland. A Magistrates' Court may make a forfeiture order in respect of the seized cash.
The CPS will only have a limited role in these applications (see Role of the CPS in Part 8 applications below).
Guidance
A summary table of Part 8 powers and who may apply for them is set out under the heading of further information below. Prosecutors will need to be familiar with these powers in order to provide appropriate early advice to the police.
Production Orders
These allow financial investigators to obtain information about an alleged defendant's financial affairs, most usually his or her bank accounts. A production order (see section 345) requires the person in possession or control of the material to produce it to an appropriate officer to take away, or give an appropriate officer access to it within the period stated in the order. This is usually seven days unless the judge decides that a longer or shorter period is appropriate.
Power of entry
A production order does not automatically give a right of entry onto premises. If a production order requires a person to give an appropriate officer access to material, section 347 allows the judge, on application by an appropriate officer, to make an order to grant entry. This order requires any person entitled to grant entry to the premises to allow an appropriate officer to enter those premises to obtain access to the material.
A production order cannot require the production of, or grant access to, material that is legally privileged or excluded material. Section 348(2) defines privileged material as being any material, which the person would be entitled to refuse to produce on grounds of legal professional privilege in proceedings in the High Court.
Search and Seizure Warrants
A search and seizure warrant (see section 352) authorises an appropriate officer to enter and search the specified premises, and to seize and retain any material found which is likely to be of substantial value (whether or not by itself) to the investigation for the purposes for which the warrant is sought.
A search and seizure warrant is only appropriate where:
- a production order has not been complied with and there are reasonable grounds for believing that the material is on specified premises;
- it would not be appropriate to make a production order because it is not practicable to communicate with any person against whom the production order may be made;
- entry to the premises will not be granted unless a warrant is produced; or
- the investigation would be seriously prejudiced unless an appropriate person arriving at the premises is able to secure immediate entry.
A search and seizure warrant does not confer the right to seize privileged or excluded material (see section 354).
Customer Information Orders
On the application of a constable, customs officer or accredited financial investigator, if they are a senior appropriate officer or are so authorised by one, the Crown Court may make a section 363 customer information order that a financial institution on receipt of a notice in writing provide the customer information requested.
Customer information in relation to a person and a financial institution is information about whether a person holds or has held account(s) at a financial institution solely or jointly with another.
Individual's Accounts
If such accounts are or have been held, the definition of customer information is set out in section 364 (2) and will include the account number or numbers; the person's full name and date of birth; the most recent and any previous address; the date or dates of account opening and/or closing; such evidence of identity obtained by the financial institution for the purpose of the money laundering regulations; the personal details (name, date of birth, addresses) of joint account holders; the account numbers of any other accounts to which the individual is signatory and the details of the other account holders.
Incorporated and Unincorporated Associations
If the specified person is a company, limited liability partnership or similar body incorporated or established outside the UK, then customer information is defined in section 364 (3) and will include the account number or numbers; the person's full name; a description of the business which the person carries on; the country or territory in which it is incorporated and any company number, any VAT number assigned to it; its registered office and previous registered offices; the date or dates of the account opening and/or closing; such evidence of identity obtained by the financial institution for the purpose of the money laundering regulations; and the full name, date of birth, current and previous addresses of account signatories.
Criminal Offences
A financial institution commits an offence contrary to section 366(1) if without reasonable excuse it fails to comply with a requirement imposed on it under a customer information order punishable on summary conviction to a fine not exceeding level 5 on the standard scale.
A financial institution commits an offence contrary to section 366(3) if, in purported compliance with a customer information order, it makes or recklessly makes a statement which it knows to be false or misleading in a material particular punishable on summary conviction to a fine not exceeding the statutory maximum, or on conviction on indictment to a fine.
Account Monitoring Orders
An account monitoring order (see section 370) lets the police observe /monitor the transactions in an account for up to 90 days at a time. The order is available for both confiscation and money laundering investigations, and will specify the manner and timescale for the information to be given.
Cash Seizure
Since 30 December 2002, a customs officer or a constable may seize cash at the borders or inland if he has reasonable grounds for suspecting that the cash is recoverable property or intended for use in unlawful conduct and if the sum seized is in excess of a minimum amount (S294 POCA). This exercise of power is subject to a Code of Conduct. The minimum amount was originally £10,000, but was subsequently reduced to £5,000 on 16 March 2004. On 31 July 2006, the minimum amount was further reduced to £1,000.
Seized cash may not be detained for more than 48 hours (excluding weekends, Christmas Day, Good Friday and official bank holidays) except by order of a magistrate. A magistrate may make such an order if satisfied that there are reasonable grounds for the officer's suspicion and that the continued detention is justified for the purposes of investigating its origin or intended use. The magistrate may also make an order for continued detention if consideration is being given to the bringing of criminal proceedings, or if such proceedings have been commenced and not concluded. Monies detained would in most cases be paid into an interest bearing account pending the outcome of proceedings.
The magistrates' court may release the cash in response to an application by the person from whom the cash was seized on the grounds that it is not recoverable property and is not intended for use in unlawful conduct. Secondly, a customs officer or a constable may release cash or any part of it after notifying the justice or magistrates' court if satisfied that the detention can no longer be justified.
Section 300 enables the magistrates' court to order the forfeiture of cash or any part of it if satisfied that it is recoverable property or is intended for use in unlawful conduct. Cash forfeiture proceedings are civil proceedings and the civil standard of proof will apply.
Seized cash that is detained under section 295(2), or that has been forfeited under section 298(2) POCA is excluded from the definition of free property (section 82 POCA). The effect of this is that the cash cannot be covered by a restraint order and cannot form a part of the confiscation order, although whilst held under section 295(2) it will be taken into account in calculating the person's benefit from criminal conduct.
The situation is further complicated by the fact that once cash has been taken into account in deciding the amount of a person's benefit from criminal conduct for the purpose of making a confiscation order, it is no longer recoverable property (section 308(9) POCA) and so cannot be forfeited under section 298(2) POCA.
In the event that cash proceedings are linked to a criminal prosecution and the cash forfeiture is to be contested, then an application for forfeiture should be made under section 298 POCA and the hearing of the application should be adjourned to await the outcome of the criminal proceedings (R v Payton [2006] EWCA Crim 1226). It is submitted that cash detained under section 298(4) is free property and so may then be taken into account in respect of both the benefit figure and the amount of confiscation order in confiscation proceedings.
Procedure
The role of the CPS in Part 8 applications
Applications for Production Orders, Search and Seizure Warrants, Customer Information Orders and Account Monitoring Orders are proceedings, which are linked to the investigation of crime. CPS lawyers may provide advice but should not make the application. If there is a subsequent challenge to any order that is made the CPS may provide advice including advice to the police on drafting instructions to counsel, but it is for the police to instruct counsel in relation to applications which occur before the commencement of proceedings.
Cash forfeiture proceedings are civil in nature (see the European case of Butler v UK) and as such, the CPS has neither a power nor a duty to act in such proceedings. The police may seek early advice from the CPS in relation to contemplated criminal proceedings, where cash has been seized during the course of the investigation.
If the CPS advises that a prosecution should proceed, then it is likely that money seized will either form an exhibit in the case, or will be held with a view to the court making a confiscation order following conviction. In those circumstances, the CPS would provide advice to the police on the basis that the issue arises from a criminal offence and is ancillary to contemplated or ongoing criminal proceedings.
Conversely, if the CPS advises against prosecution, then either the cash will be returned, or purely civil forfeiture proceedings will continue without CPS involvement.
Prosecutors should note that the cash seizure provisions became operative on 30 December 2002 and that the exercise of the power is subject to a Code of Conduct and that amendments have been made to the Magistrates' Court Rules to govern the applications.
For further information as to the role of the CPS in respect of these applications, please see the Service Level Agreement with the police set out in the annexe below.
Further Information
Home Office Summary Table of Powers
Production order
Purpose of power
- Obtain material already in existence relating to a known account in control of a know person e. g. bank statements and correspondence
Who can apply for it -
- confiscation investigation?
(1) A member of SOCA's staff
(2) Any constable
(3) Any customs officer
(4) AFI with relevant accreditation
- money laundering investigation?
(1) Any constable
(2) Any customs officer
(3) AFI with relevant accreditation
- civil recovery investigation
A member of SOCA's staff or the relevant Director
Search and seizure warrant
Purpose of power
(1) Search premises where production order not complied with; or
(2) Search premises where production order likely to be ineffective and seize material
Who can apply for it -
- confiscation investigation?
(1) A member of SOCA's staff
(2) Any constable
(3) Any customs officer
(4) AFI with relevant accreditation
- money laundering investigation?
(1) Any constable
(2) Any customs officer
(3) AFI with relevant accreditation
- civil recovery investigation
A member of SOCA's staff or the relevant Director
Disclosure order
Purpose of power
Require any person to produce documents, provide information or answer questions relating to investigation
Who can apply for it -
- confiscation investigation?
A member of SOCA's staff
- money laundering investigation?
Not available in a money laundering investigation
- civil recovery investigation
A member of SOCA's staff or the relevant Director
Customer information order
Purpose of power
Trawl financial institutions for accounts in the name of a particular person or organisation
Who can apply for it -
- confiscation investigation?
(1) A senior member of SOCA's staff
(2) Any constable with superintendent authorisation
(3) Any customs officer with officer at Pay Band 9 authorisation
(4) AFI with relevant accreditation and authorisation
- money laundering investigation?
(1) Any constable with superintendent authorisation
(2) Any customs officer with officer at Pay Band 9 authorisation
(3) AFI with relevant accreditation and authorisation
- civil recovery investigation
A member of SOCA's staff or the relevant Director
Account monitoring order
Purpose of power
Monitor future transactions through a known account for up to 90 days
Who can apply for it -
- confiscation investigation?
(1) A member of SOCA's staff
(2) Any constable
(3) Any customs officer
(4) AFI with relevant accreditation
- money laundering investigation?
(1) Any constable
(2) Any customs officer
(3) AFI with relevant accreditation
- civil recovery investigation
A member of SOCA's staff or the relevant Director