Strengthening the Proceeds of Crime Act legislation

Today heralds some dramatic changes to the Proceeds of Crime Act with the introduction of the Serious Crime Act 2015. Whilst POCA is well known as one of the most draconian pieces of legislation, the bad news is that it has just got even harder for those facing confiscation proceedings with the introduction of the new statutory changes.

All changes to POCA legislation affect Confiscation Orders made on or after 1 June 2015 and the key changes can be summarised as follows:

• Defendants now only have 3 months (reduced from the original 6 months) to satisfy the order but on application this can now be extended to a maximum of 6 months (previously up to a maximum of 12 months). Interest will then be payable and enforcement action taken. The consequences of this harsh cut in the time-limits will increase the number of applications to extend time and it is likely that more defendants will end up serving default sentences. Interest payments will increase overall too.

• Default sentences have also been increased quite drastically and the original 12 bands have been significantly reduced to just 4 making the penalty for defaulters very tough indeed. The maximum term has been increased from 10 years to 14 years. See below a comparison table for default sentences and bands.

PRE 1 JUNE 2015

An amount not exceeding £200 7 days

An amount exceeding £200 but not exceeding £500 14 days

An amount exceeding £500 but not exceeding £1,000 28 days

An amount exceeding £1,000 but not exceeding £2,500 45 days

An amount exceeding £2,500 but not exceeding £5,000 3 months

An amount exceeding £5,000 but not exceeding £10,000 6 months

An amount exceeding £10,000 but not exceeding £20,000 12 months

An amount exceeding £20,000 but not exceeding £50,000 18 months

An amount exceeding £50,000 but not exceeding £100,000 2 years

An amount exceeding £100,000 but not exceeding £250,000 3 years

An amount exceeding £250,000 but not exceeding £1 million 5 years

An amount exceeding £1 million 10 years

ON or POST 1 JUNE 2015

An amount not exceeding £10,000 6 months

An amount exceeding £10,000 but not exceeding £500,000 5 years

An amount exceeding £500,000  but not exceeding £1 million 7 years

An amount exceeding £1 million 14 years

Confiscation Orders of over £10 Million which cannot be met will attract default sentences of 14 years which will have to be served in full after the sentence for the substantive matter has been served.

• The authorities will be empowered to take monies from the bank account of a Defendant directly as soon as the Confiscation Order is made. This power could only be used before 1 June 2015 in situations where the money was being held under a restraint order and the Defendant had failed to pay in the time limit allowed.

• The threshold has been lowered for pre-charge Restraint Orders which means that the authorities need only prove “reasonable cause to suspect” that the defendant had benefitted  from criminal activity/conduct rather than the old threshold test of “reasonable cause to believe”

• The category and rights of a Third Party have been recognised in the confiscation proceedings and there is no longer any requirement to wait until enforcement action is being taken. Third Party rights are being given some priority and it puts the onus on the Prosecution to inform the court of any third party who may have an interest whether it is beneficial or legal to the assets.

• Compliance Orders are such that they will be granted if the Court feels that it is “appropriate for the purpose of ensuring that the confiscation order is effective”. The mechanism for making Compliance Orders can be used at any time once a Confiscation Order in made and is still in force.

The law on Restraint proceedings and Confiscation is a complex area which is ever evolving.