Proceeds of Crime Act 2002

Infobox UK Legislation
short_title=Proceeds of Crime Act 2002
parliament=Parliament of the United Kingdom
long_title=An Act to establish the Assets Recovery Agency and make provision about the appointment of its Director and his functions (including Revenue functions), to provide for confiscation orders in relation to persons who benefit from criminal conduct...
statute_book_chapter=2002 c. 29
introduced_by=David Blunkett (Home Secretary)cite web|url=http://www.publications.parliament.uk/pa/cm200102/cmhansrd/vo011018/debtext/11018-12.htm#11018-12_spnew13|title=House of Commons Hansard; vol 372, part 33, col 1325|date=18 October 2001|work=Hansard|publisher=Parliament of the United Kingdom|accessdate=2008-10-01]
territorial_extent=England and Wales; Scotland; Northern Ireland
royal_assent=24 July 2002cite web|url=http://www.publications.parliament.uk/pa/cm200102/cmhansrd/vo020724/debtext/20724-32.htm#20724-32_spnew0|title=House of Commons Hansard; vol 389, part 185, col 1080|date=24 July 2002|work=Hansard|publisher=Parliament of the United Kingdom|accessdate=2008-10-01]
commencement=
repeal_date=
amendments=
related_legislation=
repealing_legislation=
status=
original_text=http://www.opsi.gov.uk/acts/acts2002/20020029.htm
activeTextDocId=526524
legislation_history=|

The Proceeds of Crime Act 2002 (2002 c. 29) (POCA) is an Act of the Parliament of the United Kingdom which provides for civil recovery of the proceeds from crime and created the Assets Recovery Agency.

Background

Amongst other things, the 2002 act made it easier to convict criminal suspects because prior to it being enacted prosecutors had to rely on the Drug Trafficking Act 1994 for offences of drug trafficking, and the Criminal Justice Act 1988 as amended by the Criminal Justice Act 1993 for proceeds of other crimes. In essence prior to 2002 a prosecuting lawyer had to prove that the monies or assets were the proceeds of crime and also what 'type' of crime the proceeds came from. The 2002 Act makes convictions more likely by removing the need to make a distinction between types of crime that made the money.

The first act of Parliament for England and Wales aimed at stripping criminals of illegally acquired gains was the Drug Trafficking Offences Act 1986. Scotland was provided with similar powers under the Criminal Justice (Scotland Act) 1987. These acts of Parliament were introduced following the House of Lords ruling that under the law as it then was some £750,0000 had to be returned to a gang of drug dealers. These proceeds had been traced to the defendants in a police operation codenamed “Operation Julie” in 1978. Powers for the courts to confiscate proceeds of crime were extended under the Criminal Justice Act 1988 and the Criminal Justice (Scotland) Act 1995. These Acts provided the courts with powers to confiscate proceeds of crime where an offence had been committed other than drug trafficking offences, in specified circumstances. Powers for the courts in Northern Ireland to confiscate proceeds in both drug trafficking and other offences was introduced by Criminal Justice (Confiscation) (Northern Ireland) Order 1990. These acts were amended by: Criminal Justice Act 1993, the Drug Trafficking Act 1994, the Proceeds of Crime (Scotland) Act 1995 and the Proceeds of Crime (Northern Ireland) Order 1996.

Passage of the Bill

The Proceeds of Crime Bill was introduced to the House of Commons by the Home Secretary, David Blunkett, on 18 October 2001. It was given Royal Assent on 24 July 2002.

Provisions of the Act

Part 1

Sections 1 - 5 of the Act provides for the establishment of the Assets Recovery Agency and for the Secretary of State to appoint its Director. The section gives the Director power to employ staff and delegate his function to staff to carry out his role. The office of Director has legal personality. The section makes it clear that Director must pay attention to guidance given by the Secretary of State which is calculated to contribute to the reduction of crime. The Assets Recovery Agency was provided with completely new powers by the Proceeds of Crime Act 2002. The new powers allow the Assets Recovery Agency to use the civil court procedures to recover the proceeds of unlawful conduct by way of an action in the High Court. Where there are reasonable grounds to suspect there is taxable income gain or profit the Agency also has the power to issue tax assessments.

Part 2

Sections 6 - 91 deal with the transfer of power to make confiscation orders from the Magistrates Court and High Court to the Crown Court. The High Court can no longer make Restraint Orders or Charging Orders and the Magistrates Court must commit confiscation cases to the Crown Court. These changes apply to offences committed after the commencement of the act on 23 March 2003.

Part 7

A consequence of the Act is that solicitors, accountants, and insolvency practitioners who suspect their clients of tax evasion are now required to report them to the authorities without telling the clients they have done so, subject to a maximum punishment of 14 years in jail.cite news|url=http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/2864661/Solicitors-must-%27shop%27-suspected-tax-dodgers.html|title=Solicitors must 'shop' suspected tax dodgers|last=Dolan|first=Liz|date=29 September 2003|work=Telegraph.co.uk|publisher=Telegraph Media Group|accessdate=2008-10-01] In addition to investigation of crime, this affects solicitors handling cases of divorce, where warring spouses often accuse each other of tax evasion, and the transfer of family assets to relatives.

If a client informs an accountant that he has done no more than wrongly claimed expenses on a tax return, the accountant is required secretly to report this to the authorities. The Association of Certified and Chartered Accountants said that "as things stand, when an honest mistake is made, for example on a declaration of taxable income, the accountant is faced with having to report this to the National Criminal Intelligence Service even when corrected figures have already been sent to the Inland Revenue. This is nonsense."

If a procedure is delayed because a legal or financial advisor has secretly reported a suspicion, the advisor cannot at the time or later—unless NCIS agrees—tell a customer that the delay was due to a report made under POCA, even if no action was taken. [cite web|url=http://www.financial-ombudsman.org.uk/publications/ombudsman-news/29/29-crimeact.htm|title=The Proceeds of Crime Act 2002|month=July|year=2003|work=Ombudsman News; issue 29|publisher=Financial Ombudsman Service|accessdate=2008-10-01]

Part 7 includes gains from acts carried out abroad which are criminal in Britain. It has been pointed out that technically a British lorry driver who is paid for transporting goods to France, and who drives on the right in France (a criminal offence in Britain);fact|date=October 2008 and a Spanish bullfighter (bullfighting is illegal in Britain) who buys property in London with money earnt in the bullring, fall foul of the Act.fact|date=October 2008

Notes and references

External links

* [http://www.opsi.gov.uk/acts/acts2002/20020029.htm Original text of the statute] as published by the Office of Public Sector Information
*UK-SLD|526524