The Committee discussed Government amendments 266 to 289 on 12 February, before the recess, as part of a more general debate on the seizure, detention and sale of property. I do not propose to go over all of that again today, but will instead focus on Government amendments 319, 320 and 321.
Amendment 319 amends section 69(1) of the Proceeds of Crime Act 2002. It is consequential to other amendments that we have made elsewhere in the Bill. Section 69 of POCA makes provision for England and Wales; amendments 320 and 321 make the corresponding changes to the relevant provisions for Scotland and Northern Ireland. Section 69 makes provision about how the courts are to exercise their powers: for example, it emphasises that the powers must be exercised with a view to allowing third parties to retain or recover the value of any interest they hold, and that the satisfaction of a confiscation order takes precedence over other obligations of the defendant or the recipient of a tainted gift from the defendant. It also requires that powers must be exercised with a view to maintaining the value of the amount available for confiscation. The amendments add the new power to the courts of making directions about proceeds, most obviously in respect of innocent third parties.
Amendments 266 to 269, 273 to 278, 282 and 284 to 286 add to the new provisions in POCA relating to seizing, detaining and selling property to meet the value of an outstanding confiscation order. They merely provide that, out of the amount paid in settlement of a confiscation order, the police and other law enforcement agencies can claim back their reasonable costs of having to store and sell property. It is entirely reasonable that the additional cost that falls on the police and others is reimbursed, much as it is at the moment under POCA in respect of receivers. It is a matter of budgeting. Costs are reimbursed after the event, rather than being funded up front, and they are paid out of the settled amount, so that no additional burden of payment falls on the defendant. I see the hon. Members for Hornchurch and for Chesterfield acknowledge the importance of that.
The provision is simply to do with the distribution of the money that has been collected. That it is the magistrates court and not the enforcer that decides what the reasonable costs are provides a safeguard by ensuring independent judicial oversight of the costs incurred.
The Minister has fastened on the key point and is explaining it. To be clear, we are talking about simply an application of proceeds rather than any additional costan order of priority, if I can describe it like that, in respect of which organisation gets a particular sum of money first in the distribution of cash that has been realised. Will he confirm that the provision does no more than that?
That is correctI hope that reassures the hon. Gentleman. He has explained a fundamental point well.
Amendments 270, 272, 279, 281, 283, 287 and 289 add to the new provisions in the Proceeds of Crime Act. They simply amend the provisions on distributing sums received in consequence of payment of a confiscation order. Notably, they provide that where a court has determined the reasonable costs that the police or another law enforcement agency has incurred, those costs are paid from the recovered amount. They also provide for the court, whether a Crown court or magistrates court, to make directions on any payment. That means that any third party interests in the property can also be paid back.
Amendments 271, 280 and 288 are merely technical amendments. The changes to POCA that those amendments remove will be made in schedule 6 to the Bill. Nothing is changing. It is just tidier to make all the consequential amendments that flow from the changes to POCA in one place.
I hope that, having given the assurances that I did to the hon. Member for Hornchurch, he sees the sense in the amendments that we have proposed.
Amendments made: 267, in clause 39, page 52, line 30, at end insert
67AA Costs of storage and realisation
(1) This section applies if a magistrates court makes an order under section 67A.
(2) The court may determine an amount which may be recovered by the appropriate officer in respect of reasonable costs incurred in
(a) storing or insuring the property since it was seized or produced as mentioned in subsection (1) of that section;
(b) realising the property.
(3) If the court makes a determination under this section the appropriate officer is entitled to payment of the amount under section 55(4).
(4) A determination under this section may be made on the same occasion as the section 67A order or on any later occasion; and more than one determination may be made in relation to any case.
(5) In this section appropriate officer has the same meaning as in section 41A..
Amendment 268, in clause 39, page 52, line 31, leave out Section 67A and insert Sections 67A and 67AA.
Amendment 269, in clause 39, page 52, line 36, at end insert
(3A) An appropriate officer may appeal to the Crown Court against
(a) a determination made by a magistrates court under section 67AA;
(b) a decision by a magistrates court not to make a determination under that section..
Amendment 270, in clause 39, page 52, line 38, at end insert
67C Proceeds of realisation
(1) This section applies to sums which
(a) are in the hands of an appropriate officer, and
(b) are the proceeds of the realisation of property under section 67A.
(2) The sums must be applied as follows
(a) first, they must be applied in making any payments directed by the magistrates court or the Crown Court;
(b) second, they must be paid to the appropriate designated officer on account of the amount payable under the confiscation order.
(3) If the amount payable under the confiscation order has been fully paid and any sums remain in the appropriate officers hands, the appropriate officer must distribute them
(a) among such persons who held (or hold) interests in the property represented by the proceeds as the magistrates court or the Crown Court directs, and
(b) in such proportions as it directs.
(4) Before making a direction under subsection (3) the court must give persons who held (or hold) interests in the property a reasonable opportunity to make representations to it.
(5) If the magistrates court has made a direction under either of subsection (2)(a) or (3) in respect of the proceeds of realisation of any property, the Crown Court may not make a direction under either of those provisions in respect of the proceeds of realisation of that property; and vice versa.
(6) In this section
appropriate officer has the same meaning as in section 41A;
appropriate designated officer means the designated officer for the magistrates court which, by virtue of section 35, is responsible for enforcing the confiscation order as if it were a fine..
Amendment 271, in clause 39, page 52, line 41, leave out subsection (4).
Amendment 272, in clause 39, page 53, line 11, at end insert
(5) In section 55(4) (payment of sums received by designated officer under section 54)
(a) after section 54 insert or 67C,
(b) in paragraph (b) for the receiver substitute any receiver, and
(c) after paragraph (b) insert
(c) third, in payment to an appropriate officer of any amount to which the officer is entitled by virtue of section 67AA..(Mr. Coaker.)
I wish to put on the record a few remarks that I think are important. I will not detain the Committee long, but the clause is important, as it goes to the heart of recovering the money to meet the confiscation order, which essentially is what we are all trying to do. The exchange between the hon. Member for Hornchurch and I had goes to the nub of what could have been controversial about the clause. Although that exchange was brief, it was very helpful.
The clause provides an important addition to the powers to enforce outstanding confiscation orders. It is obviously not enough for the court to make a confiscation order against a convicted defendant. I say again to the hon. Member for Chesterfield that confiscation orders can only be made in a Crown court. Payment of the confiscation order must be ensured, otherwise the order has no value. We all feel better if a confiscation order is made, but have we denied the criminal assets to the individual? We simply have to do better in ensuring that these orders are paid.
The clause provides that property that has been seized in England and Wales by an appropriate officer under a relevant seizure power, or which has been produced to such an officer in compliance with a production order under the Proceeds of Crime Act, may be sold to meet a confiscation order. That completes the set of powers of being able to retain property seized under other powers for confiscation purposes in clauses 33 to 35, the new power to search for and seize property on or following arrest in clauses 36 to 38, and now this important power of sale. Those are significant new powers to aid the enforcement of confiscation orders, which I know is something that all of us in the Committee want to see.
Specifically, the clause provides that a magistrates court can authorise the sale of seized property if a confiscation order has been made and the time to pay that order has expired without its being paid. The clause does not apply to cases where an enforcement receiver has been appointed; in such cases, the enforcement receiver will sell the property under existing powers.
The property must have been seized under specified powers in the Proceeds of Crime Act 2002 or the Police and Criminal Evidence Act 1984, although there is the power to add to that list by order. The listed seizure powers are those likely to have been used in respect of defendants who are also subject to a financial investigation. A confiscation investigation aims to establish whether a defendant has benefited from his criminal conduct and, if so, the extent or whereabouts of that benefit.
Those who can be authorised to sell the property are officers who perform financial investigations under POCA, namely accredited financial investigators, constables, officers of HMRC, SOCA officers and members of staff of the main prosecution agencies. The money raised by the sale is to be paid directly to the court enforcing the confiscation order.
There is a right of appeal against a decision either to make or not to make an order authorising sale. The right of appeal is available to affected third parties, but not to the defendant against whom the confiscation order has been made. He or she has an existing right of appeal against confiscation as part of a general right of appeal against sentence under the Criminal Appeals Act 1968.