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Recovering the Proceeds of criminal activity by using a criminal
prosecution can be expensive and the standard of proof is high. The
alternative is to initiate Civil Recovery Proceedings. Although HM
Revenue and Customs have had powers to forfeit goods for many
years, general provisions of civil recovery were introduced by Part
5 of the Proceeds of Crime Act 2002. The Part 5 powers can be used
by the Serious Fraud Office and The Crown Prosecution Service
(incorporating the HM Revenue and Customs Prosecutions Office).
Summary
Part 5 of the Proceeds of Crime Act enables
enforcement authorities to recover, in civil proceedings before the
High Court or Court of Session, property which is, or represents,
property obtained through unlawful conduct. It also enables them to
seize and forfeit cash which is, or represents, property obtained
through unlawful conduct, or which is intended to be used in
unlawful conduct. The powers conferred by Part 5 are exercisable in
relation to any property (including cash) whether or not any
proceedings have been brought for a criminal offence in connection
with the property.
"Unlawful conduct"?
Conduct occurring in any part of the United
Kingdom is unlawful conduct if it is unlawful under the criminal
law of that part. Conduct which occurs in a country outside the
United Kingdom and is unlawful under the criminal law of that
country, and if it occurred in a part of the United Kingdom, would
be unlawful under the criminal law of that part, is also unlawful
conduct. The court must decide on a balance of probabilities
whether it is proved that any matters alleged to constitute
unlawful conduct have occurred, or that any person intended to use
any cash in unlawful conduct.
"Property obtained through unlawful conduct"?
A person obtains property through unlawful conduct (whether his
own conduct or another's) if he obtains property by or in
return for the conduct. In deciding whether any property was
obtained through unlawful conduct it is immaterial whether or not
any money, goods or services were provided in order to put the
person in question in a position to carry out the conduct. It is
not necessary to show that the conduct was of a particular kind if
it is shown that the property was obtained through conduct of one
of a number of kinds, each of which would have been unlawful
conduct.
When might Civil Recovery Proceedings be issued?
According to guidance issued by the Home Secretary and the
Attorney General;
Criminal prosecution must be considered first.
If the case does not meet the criteria for prosecution
(evidential sufficiency + public interest), then civil recovery can
be considered.
In deciding whether the public interest criteria is met for
prosecution, SOCA/the prosecuting authorities are entitled to take
the view that the public interest is better served by civil
recovery proceedings.
A criminal investigation does not need to be completed before
civil recovery can be considered.
A criminal investigation / prosecution can continue in tandem
with a civil recovery investigation, but criminal and civil
proceedings cannot be carried on at the same time in relation to
the same criminality.
A prosecution which fails can still result in civil
recovery.
Civil settlements may be entered into to compromise civil
recovery proceedings, but a potential defendant cannot buy his way
out of prosecution by making a civil payment; if the case justifies
a prosecution, criminal proceedings should be brought.
What should I do if I am facing civil recovery
proceedings?
The part 5 provisions are quite different from those in
confiscation proceedings brought under part of the Proceeds of
Crime Act 2002. Recognizing those distinctions is critical in
defending those against whom the proceedings have been taken. Talk
to the lawyers who know the Proceeds of Crime Act in depth and who
can give you sensible advice in cases which can have an enormous
impact on a business or individual.
We can assist at the investigation and proceedings stage. This
can include advice on the gathering of evidence, representation at
court or negotiating with the prosecuting authority.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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