Joint thematic report on the Proceeds of Crime Act 2002

Taking or confiscating the proceeds of crime from criminals is not a new idea. Despite the fact that the current Proceeds of Crime Act 2002 is only seven years old, some of its principles have been around for a much longer time.

Part I of the Criminal Justice (Scotland) Act 1987 made provision for Scotland in relation to confiscating the proceeds of drug trafficking. Thereafter, the Criminal Justice (International Co-operation) Act 1990, which extended to the whole of the UK, empowered the court to forfeit any cash that had been seized while being imported into or exported from the UK, if the court was satisfied that the cash directly or indirectly represented the proceeds of drug trafficking or was intended for use in drug trafficking. In addition, the Prevention of Terrorism (Temporary Provisions) Act 1989, which also applies to the UK as a whole, made provision for the forfeiture on conviction of money or property related to certain offences concerned with financing terrorism. It also provided for the forfeiture of money or property which was at the time of the offence in the accused's possession or control for the use or benefit of a proscribed organisation.

In 1994 the Hon Lord Davidson, on behalf of the Scottish Law Commission, chaired a review of the proceeds of crime legislation in order to consider the adequacy of the law and its provisions. Its resulting discussion paper on forfeiture and confiscation made a number of provisional proposals for reform.

For example, in the opinion of the Commission the confiscation provisions in the UK, the Commonwealth and certain European States were modest in scope in comparison with confiscation legislation in the USA which made provision for both criminal forfeiture and civil forfeiture. The principal statutes on the subject of criminal forfeiture, both passed in 1970 and later amended, were the Racketeer Influenced and Corrupt Organizations Act (known as RICO) aimed at organised crime, and the Controlled Substances Act, Continuing Criminal Enterprise Offense ( CCE) aimed at major drug traffickers. Each contained comprehensive and "draconian" ³⁰ provisions for the mandatory forfeiture of defendants' assets. Civil forfeiture permitted the seizure and confiscation of the assets of persons who had not been convicted of any crime. The procedure was described as "a prosecutor's dream and a defense ( sic) attorney's nightmare" ³¹. The proceedings were against the property itself rather than the person, the burden of proof was lower than in a criminal case and the property owner's innocence, even his acquittal in prior criminal proceedings, was generally no defence.

These developments in American law attracted criticism, and the Commission took the view that to copy them in Britain "would be a serious mistake". Nonetheless similar provisions were to be enacted by UK statute in part 5 of the Proceeds of Crime Act 2002. Despite these initial concerns, we suggest that the civil recovery provisions have proved effective.

As to the confiscation of the proceeds of crime, the Commission noted that while schemes were in place in the UK for drug trafficking and terrorism and in England and Wales for serious crime, Scotland had no additional ones. Many of the changes subsequently proposed for Scotland by the Commission were intended to plug this gap, and certainly when it was passed in 1995 the Proceeds of Crime (Scotland) Act 1995 brought into force a number of its recommendations. Essentially it brought in similar confiscation provisions to those already legislated for terrorism and drug trafficking and applied these to other listed types of serious crime. However, in practice this led to difficulties in court for prosecutors who now had to establish the type of crime to which confiscation would apply, ie which type of criminal conduct had led to the assets in question. This was one of the main reasons for the new Proceeds of Crime Act in 2002.

In October 1998, the Prime Minister Tony Blair tasked the Performance and Innovation Unit ( PIU) of the Cabinet Office with examining asset recovery arrangements. The PIU reported in 2000, with a number of recommendations, many of which were incorporated in the Proceeds of Crime Act 2002.