ANNEX B: PROCEEDS OF CRIME ACT 2002
This thematic report was conducted jointly with Her Majesty's Inspectorate of Constabulary (Scotland) and was published in October 2009. It had the remit of inspecting the arrangements in police forces and the Crown Office and Procurator Fiscal Service for implementing the Proceeds of Crime Act 2002 in Scotland (this included with the consent of the Lord Advocate a review of the Civil Recovery Unit).
The methodology embraced a wide variety of evidence gathering techniques including meetings with key leaders in organisations, interviews with operational staff in both the police and the Crown Office and Procurator Fiscal Service, questionnaires to supplement information on emerging topics, focus groups and benchmarking exercises both with the police and Crown Prosecution Service in England and with current policy and practice in the Republic of Ireland.
The 2002 Act was a major piece of legislation applying both in England and Scotland following concerns about the limited ability of the courts to order confiscation of the benefits of their crimes from convicted criminals. In some cases the value was considerable.
In Scotland the 1987 Criminal Justice (Scotland) Act provided confiscation powers in drug trafficking cases and was extended in 1995 to cover non drug offences. The offender in appropriate circumstances is ordered to pay a specific sum equivalent to the financial benefit of the crime. It did not involve confiscation of property such as houses, cars, boats etc.
In addition the police were given powers to seize cash which was reasonably suspected of being connected with drug trafficking. The courts were then asked to forfeit this cash and no conviction was necessary.
In 1998 all the various powers and processes were reviewed and consolidation and extension was considered necessary and the 2002 Act was passed.
The whole basis of the approach is to make crime literally not pay and the Act extended the scope of criminal activity which could be considered for criminal confiscation from drug dealing and trafficking to a fuller range of financially motivated crimes. The previous powers of investigation into financial affairs were also broadened and the mechanisms for removing the benefits of criminal activity strengthened.
The main findings of our joint report were that -
1. Effective use of the powers contained within the Act was being made in relation to serious organised crime particularly in the sphere of drug related crime. In the Crown Office and Procurator Fiscal Service a specialist unit (National Casework Division) had been created to deal with the money laundering provisions and to tackle serious organised crime.
2. Beyond the specialist units there was less evidence that there was consideration being given to the powers in the Act in mainstreaming its provisions by those dealing with lower level crime. At operational levels there was much less awareness of how the provisions of the Act could be invoked to combat a wide range of offending. Reliance was placed on specialists to identify opportunities to seek restraint orders to prevent disposal of criminal proceeds and lead to eventual confiscation.
3. The report indicated that the civil recovery and taxation provisions of the Act had not been fully exploited. The system in relation to the Crown Office and Procurator Fiscal Service was that a process had been put in place which required a referral of cases to the Civil Recovery Unit only from the National Casework Division. This meant that only those cases reported for prosecution which either failed or were not proceeded with could be reported to the Civil Recovery Unit. There was no direct route for law enforcement agencies to report a case for civil recovery even where it was clear that there was insufficient evidence to reach a criminal standard of proof. This meant that the mindset was essentially prosecution focused to potential exclusion of the civil recovery provisions.
4. This lack of mainstream knowledge in both the police forces and in the Crown Office and Procurator Fiscal Service had resulted in the powers contained in the Act not being used to their full potential. Lower level criminals who might carry out a high volume of financially rewarding crime and whose profit from crime might be the most visible in communities were not routinely being subject to financial investigation by law enforcement agencies for potential confiscation.
5. The report concluded that there was more scope to use the powers in the Act to remove the financial benefits of crime at all levels across Scotland and that it provided a significant opportunity for law enforcement agencies to disrupt a much wider range of criminality.
The joint report recommended that the way forward was -
1. A more focused use of all three strands available under the Act could be made including early decisions on whether cases should be reported for prosecution or for civil recovery.
2. A shift in culture across all organisations in order that consideration of financial investigation became everyone's responsibility rather than the exclusive role of a small number of specialists, it would become "mainstream". In relation to the Crown Office and Procurator Fiscal Service the report recommended that in order to promote the mainstream agenda a portfolio owner or champion should be appointed to produce a plan to mainstream arrangements throughout the Service.
The report concluded with four main recommendations namely:
1. That as a matter of routine the use of the Act should be mainstreamed within the Crown Office and Procurator Fiscal Service so that all confiscation opportunities were considered.
2. That the Serious Organised Crime Taskforce (with its Ministerial leads) broaden its focus in relation to the proceeds of crime and develop a strategy in order to co-ordinate action among partner criminal justice agencies.
3. That the Crown Office (and police) should appoint leads or champions to focus on mainstreaming throughout their respective organisations.
4. That the current processes used in the Crown Office and Procurator Fiscal Service (and police) be reviewed to ensure their effectiveness in all aspects of this work.
Following publication of the report there was general acceptance of the recommendations and in relation to the Crown Office and Procurator Fiscal Service an implementation group was set up to take forward the recommendations and a champion was appointed. A number of workstreams were created and monitored and reports are given to the taskforce on progress.
The recommendation that law enforcement agencies should have a direct route to the Civil Recovery Unit was not fully accepted in its terms but a new process of 'expedited' referrals from National Casework Division to either civil recovery and/or taxation is being piloted to address the difficulty highlighted by the report. This pilot, set up earlier this year, particularly sought cases from crime reporting agencies that were considered to be appropriate for these alternative options to prosecution and confiscation.
A wide ranging conference took place in March 2010 in taking forward the agenda of reform suggested in the joint report.
The joint report represents good practice in taking a holistic view of an important aspect of the criminal justice system and one which has the potential to seriously reduce the benefits of criminal activity.