The ICO seeks to obtain powers under the Proceeds of Crime Act 2002

February 2020  |  SPECIAL REPORT: CORPORATE FRAUD & CORRUPTION

Financier Worldwide Magazine

February 2020 Issue

The Information Commissioners Office (ICO), for reasons outlined below, requires authority to exercise powers afforded by the Proceeds of Crime Act 2002 (POCA 2002) and has sought the views of interested parties. On 8 November, the ICO opened a consultation on its application for powers under POCA 2002.

POCA 2002

POCA 2002 is aimed at recovering the proceeds of crime and preventing offenders from benefiting from their criminal conduct. The Act includes, Part 2 – confiscation orders and restraint orders, Part 5 – civil recovery and Part 8 – investigations.

Part 2

Confiscation orders are sought by the prosecuting authority at the conclusion of a criminal trial before a crown court where it is evident that a convicted person has or may have benefited financially as result of their criminal conduct and it is anticipated that there exists or may exist assets, such as property, land, bank accounts or stock investments available for disposal in order to wholly discharge or partially reduce the debt as calculated within the confiscation proceedings.

Upon the making of a confiscation order, the defendant must discharge the debt within a strict timescale.

Restraint orders can be requested by the investigating or prosecuting authority at any time during an investigation but normally prior to or at the time of criminal charges being laid. The purpose of such an order is to ‘freeze’ any assets believed to represent the proceeds of crime and thereby preventing the sale or other disposal of such assets with a view to preserving the same until such time as it is determined whether or not confiscation proceedings are required following a criminal trial.

Part 5

Civil recovery provides for the recovery of assets, suspected of having been acquired using proceeds of criminal conduct, by way of civil recovery powers in a civil court in circumstances where the defendant has not been convicted before a criminal court.

When pursuing these civil recovery powers through the high court, the investigating authority must only satisfy the civil law standard of proof, for example that ‘on the balance of probability’ the assets were acquired using the proceeds of crime. This is a far less demanding standard of proof than that required in criminal courts where the allegation must be proven ‘beyond reasonable doubt’.

Part 8

POCA 2002 states, “For the purposes of this Part a confiscation investigation is an investigation into: (a) whether a person has benefited from his criminal conduct; (b) the extent or whereabouts of his benefit from his criminal conduct; or (c) the available amount in respect of the person or the extent or whereabouts of realisable property available for satisfying a confiscation order made in respect of him.”

The powers available to the investigating authority include production orders, search and seizure warrants, disclosure orders and unexplained wealth orders.

The ICO’s reasoning for seeking an increase in its powers

The ICO is the UK’s data protection regulator, which was established to oversee, among other matters, the enforcement of data protection law. It also enforces the EU’s General Data Protection Regulation (GDPR). The ICO ensures that businesses within the UK comply with data protection laws and regulation and enforces any breaches with a view to protecting the general public against such matters as abuse of personal data.

Personal data, effectively, has a monetary value, like any commodity and its value is constantly increasing as new ways of benefiting from its use are discovered.

It is of particular value to those who adopt it for criminal purposes and financial gain at the expense of those exposed to, and who suffer from, such criminality.

Criminal courts are limited in the sentences that they can impose for breaches of data protection law.

While the ICO works alongside other agencies, such as the Police, the Serious Fraud Office (SFO), the Financial Conduct Authority (FCA) and the National Crime Agency (NCA) to exercise powers under POCA 2002, it clearly considers that it would be more effective if such powers were within its own domain, hence its current pursuit of powers under POCA to: (i) apply to the court for restraint orders (Part 2 POCA); (ii) apply to the court for confiscation orders (Part 2 POCA); (iii) effect cash seizure, detention and forfeiture from premises (Part 5, Chapter 3 POCA); (iv) pursue asset seizure and forfeiture from premises (Part 5, Chapter 3A); (v) undertake investigations (including search and seizure warrants) to support the proceedings sought above (Part 8 POCA); and (vi) access information relevant to the investigation of money laundering offences.

The ICO maintains that failure to grant it these powers will prevent it from effectively assisting crime prevention and an increase in criminal activity deriving from such matters as abuse of personal data.

ICO comment

In a statement, the ICO said: “The ICO previously worked in partnership with other agencies which conducted financial investigations on our behalf and assisted the courts with these cases. To date the ICO has prosecuted and convicted a number of individuals who were later stripped of assets by the courts using POCA confiscation powers. However, these partner agencies are no longer able to provide assistance to us.

“There has been significant growth in the number of cases involving financial gain and should the ICO not be granted financial investigation and other associated powers under POCA, an ever-increasing number of offenders will be able to retain what can amount to significant criminal proceeds. In some cases these gains can illegally fund lavish lifestyles,” it added.

Timeline

The ICO invited members of the public which had an interest in their consultation to complete their printed survey by 6 December 2019. Dependant on the survey results, the ICO may review what powers it seeks.

Timothy R Thompson is a solicitor at Kangs Solicitors. He can be contacted on +44 (0)20 7936 6396 or by email: tthompson@kangssolicitors.co.uk.

© Financier Worldwide

BY

Timothy R Thompson

Kangs Solicitors

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