Asset Recovery & Confiscation

Frequently Asked Questions

What powers do the courts have to seize property before a conviction? / I’ve not been convicted of anything; what powers does the court have to seize my property?

Under the Proceeds of Crime Act 2002 (“POCA”), where property is suspected to have been obtained by unlawful conduct or intended to be used in unlawful conduct, property can be seized prior to conviction. Cash and certain “listed assets” can be seized and detained by an enforcement authority and an order for forfeiture made by Magistrates’ Court (see “Seizure, Detention and Forfeiture” below).

Civil proceedings can also be commenced in the High Court, which has the power to make an order to recover property which is (or represents) property obtained through unlawful conduct without a criminal conviction (see “Civil Recovery Order” below).

The above powers to deprive individuals of property differ from confiscation, which the court may order following conviction. Confiscation orders require a defendant to pay a sum of money: an “in personum” order.

What is a Confiscation Order, and who has the power to make one?

Confiscation orders are made after a conviction at a separate confiscation hearing. They require the defendant to pay a sum of money determined to be the amount obtained from crime. If a defendant cannot pay that amount, the Court assesses, by reference to the defendant’s assets, what can be paid.

Confiscation orders can only be made by the Crown Court; if a defendant has been convicted in the Magistrates’ Court, the magistrates have the power to send the defendant to the Crown Court for the purposes of a confiscation order.

In deciding the amount to be confiscated, the court asks the following questions (s.6 POCA 2002):

1. Does the defendant have a ‘criminal lifestyle’? If yes, the court looks at whether the defendant has benefitted from general criminal conduct.
   If no, the court looks at whether the defendant has benefitted from particular criminal conduct.
2. Has the defendant benefitted from criminal conduct?
   In answering this, if the answer to the first question was yes, the court can make assumptions that property which the defendant holds, or money which the defendant has spent, has been obtained through crime. The defence can challenge these assumptions if there would be a risk of serious injustice (s.10 POCA 2002)
3. What is the recoverable amount?
4. Is it disproportionate to require the defendant to pay the recoverable amount?

How is a Confiscation Order enforced?

A confiscation order is enforced like a fine: if it is not paid, the prison sentence – the ‘default term’ – fixed at the time of confiscation, may well be activated by the Magistrates’ Court. In addition, the Crown Court can make a Compliance Order (s.13A PoCA); the purpose of these orders is to require the defendant to do or refrain from doing certain things to facilitate the payment of the amount required, for example advertise property for sale.

A defendant is given a fixed amount of time to pay the order. Thereafter statutory Interest will also accrue on unpaid amounts.

Once a Confiscation Order is made, can it be varied or appealed?

Yes.  As a confiscation order is part of a sentence, it is possible to appeal to the Court of Appeal.

The amount of benefit and available amount may be reconsidered, and the amount of the order, and the time to pay, can be varied after the order is made. Orders can go up (s.22 PoCA) and they can be varied down (s.23 PoCA; and High Court certificates of inadequacy).

Can a court order forfeiture and confiscation?

These are generally alternatives. In any event, when deciding the recoverable amount, the court does not take into account property which is subject to another kind of recovery

What is a Restraint Order, and who has the power to make one?

A restraint order prohibits an individual from dealing with any “realisable property” (property that can be sold for money). This is a preventive measure to support a confiscation order that may be made or has been made. Breach of a restraint order can be dealt with in the Crown Court by committal for contempt of court.

A restraint order can extend to all property held by a person, including property transferred after the order is made. The amount of property under the order should not exceed the amount of any confiscation order that may or has been made. If there is no risk that the property would be dissipated, a restraint order ought not be made. The order may be subject to allow for reasonable living expenses or to enable the person to carry on their trade or business.

Under Part 2 of POCA, the Crown Court has the power to make a restraint order on the application of the prosecutor if satisfied that: a criminal investigation has been started with regard to an offence and there are reasonable grounds to suspect the accused has benefited from his criminal conduct; criminal proceedings have started and there is reasonable cause to believe that the defendant benefitted from the criminal conduct; or in circumstances where there is an unconcluded application by the prosecutor under Part 2 of POCA.

If a restraint order is granted further to a criminal investigation, but the proceedings are not started within a reasonable time, or there is undue delay in continuing existing proceedings, the court must discharge the restraint order.

The restraint order may be discharged or varied on the application of the person who applied for the order or any person affected by the order. The restraint order will otherwise be discharged at the conclusion of the proceedings (unless a retrial has been ordered).

If the Crown Court decides not to make a restraint order, the person who applied for the order may appeal to the Court of Appeal against the decision. The decision of the Crown Court following an application to discharge or vary the restraint order may be appealed to the Court of Appeal, by the person who applied for the order or any person affected by the order.

What power does the Magistrates’ Court have to order seizure, detention and forfeiture of cash and personal property?

Seizure

Pursuant to Part 5 of POCA, cash may be seized by the police, HMRC, SFO or an accredited financial investigator where there are reasonable grounds for suspecting that all (or part of) the cash was obtained through unlawful conduct or intended to be used in unlawful conduct. Where it is not reasonably practicable to seize the part of the cash under suspicion, the whole of the cash amount may be seized.

Certain “listed assets” may also be seized if the item of property is “recoverable property” or intended for the use in unlawful conduct and the value of the item is not less than £1,000.

Detention

Once cash has been seized, it may be detained whilst there continues to be reasonable grounds for suspicion, initially for a period of 48 hours (not including weekends and bank holidays). This period may subsequently be extended by an order of the magistrates’ court for a period of six months, up to a maximum of two years from the date of the first order.

An order to extend the period of detention of the seized cash can be made by the magistrates if the court is satisfied that: there are reasonable grounds for suspecting the cash is recoverable property or intended to be used for unlawful conduct; and continued detention is justified while the origin of the cash is under investigation, or proceedings against any person for an offence connected to the cash are under consideration or in progress.

The Magistrates’ Court may direct the release of all or part of the detained cash on application by the person from whom the cash was seized, if satisfied that the above conditions are no longer met.

Forfeiture

Where cash had been detained, an application for the forfeiture of all (or part of) the cash may be made.

The court can order the forfeiture of the cash if it is satisfied, on the balance of probabilities,  that the cash is recoverable property or intended by any person to be used in unlawful conduct.

Once an application for forfeiture of the cash has been made, the cash will be detained and may not be released until the application proceedings are concluded.

Appeals against a forfeiture order may be made to the Crown Court within 30 days of the order.

What are Account Freezing Orders, Account Forfeiture Notices and Forfeiture Orders?

Account Freezing Order

An account freezing order prohibits an individual from making withdrawals or payments from a bank or building society account. This person will usually be the account holder or a beneficiary of the account.

A senior officer of an enforcement agency or a financial investigator can apply to the Magistrates’ Court for an account freezing order, where there are reasonable grounds for suspecting that the money held in the account has been obtained through unlawful conduct or intended for use in unlawful conduct. The application can be made “without notice” to the person it relates, where it is considered that providing notice would prejudice the forfeiture of the money.

An account freezing order cannot be made if the money under suspicion is less than £1,000. The maximum duration of an account freezing order is two years from the day the order was made.

Account Forfeiture Notices

Where an account freezing order is in effect, a senior officer of an enforcement agency may give a notice for the purposes of forfeiting money held in the frozen account. This may be all or part of the balance of the account, if it is satisfied that the money is “recoverable property” or intended for used in unlawful conduct.

This notice will state the amount of money proposed to be forfeited and specify the period for objecting to the proposed forfeiture (a period of at least 30 days). If no written objection is received within the period for objecting, the amount of money in the notice is forfeited and the account freezing order will cease to have effect.

Forfeiture Orders

Where an account freezing order is in effect, an application for the forfeiture of the money held in the frozen account may be made. The Magistrates’ Court may then order the forfeiture of the money (or any part of it) that it is satisfied constitutes “recoverable property” or is intended for use in unlawful conduct.

Where money held in a frozen account is ordered to be forfeited, the bank or building society will transfer the money from the account. Immediately after the transfer, the account freezing order will cease to have effect.

An appeal can be made to the Crown Court within 30 days of the order being made.

What is a Civil Recovery Order, and who has the power to make one?

Part 5 of POCA enables an enforcement authority to apply to the High Court to recover property which is (or represents) property obtained through unlawful conduct. Civil proceedings can be brought whether or not criminal proceedings have been brought in connection with the property; recovery can occur without the owner of the property having been convicted of a criminal offence and an acquittal does not bar civil recovery proceedings.

The enforcement authority will serve a claim form on the respondent and any other person believed to hold any associated property, specifying the property to be the subject of the recovery order.

The court may make a recovery order if it is satisfied that, on the balance of probabilities, the property represents the proceeds of unlawful conduct (meaning crime, wherever it is committed). The recovery order will vest the property in the trustee for civil recovery, who is nominated by the enforcement authority and appointed by the court, to secure the detention of the property and realise the value of the property on behalf of the enforcement authority.