2 There has been a connection where the property in question has been in the relevant part of the United Kingdom, but only if it was recoverable property in relation to the unlawful conduct for some or all of the time it was there.
3 There is a connection where there is other property in the relevant part of the United Kingdom that is recoverable property in relation to the unlawful conduct.
4 There has been a connection where, at any time, there has been other property in the relevant part of the United Kingdom that, at the time, was recoverable property in relation to the unlawful conduct.
5 (1) There is or has been a connection where a person described in sub-paragraph (2)—
(a) is linked to the relevant part of the United Kingdom,
(b) was linked to that part of the United Kingdom at a time when the unlawful conduct, or some of the unlawful conduct, was taking place, or
(c) has been linked to that part of the United Kingdom at any time since that conduct took place.
(2) Those persons are—
(a) a person whose conduct was, or was part of, the unlawful conduct;
(b) a person who was deprived of property by the unlawful conduct;
(c) a person who holds the property in question;
(d) a person who has held the property in question, but only if it was recoverable property in relation to the unlawful conduct at the time;
(e) a person who holds other property that is recoverable property in relation to the unlawful conduct;
(f) a person who, at any time, has held other property that was recoverable property in relation to the unlawful conduct at the time.
(3) A person is linked to the relevant part of the United Kingdom if the person is—
(a) a British citizen, a British overseas territories citizen, a British National (Overseas) or a British Overseas citizen,
(b) a person who, under the British Nationality Act 1981, is a British subject,
(c) a British protected person within the meaning of that Act,
(d) a body incorporated or constituted under the law of any part of the United Kingdom, or
(e) a person domiciled, resident or present in the relevant part of the United Kingdom.
Property held on trust
6 (1) There is a connection where the property in question is property held on trust, or an interest in property held on trust, and—
(a) the trust arises under the law of any part of the United Kingdom,
(b) the trust is entirely or partly governed by the law of any part of the United Kingdom,
(c) one or more of the trustees is linked to the relevant part of the United Kingdom, or
(d) one or more of the beneficiaries of the trust is linked to the relevant part of the United Kingdom.
(2) A person is linked to the relevant part of the United Kingdom if the person falls within paragraph 5(3).
(3) “Beneficiaries” includes beneficiaries with a contingent interest in the trust property and potential beneficiaries.
7 “The relevant part of the United Kingdom” has the meaning given in section 282A(4).
8 “The unlawful conduct” means—
(a) in a case in which the property in question was obtained through unlawful conduct, that conduct,
(b) in a case in which the property in question represents property obtained through unlawful conduct, that conduct, or
(c) in a case in which it is shown that the property in question was obtained through unlawful conduct of one of a number of kinds or represents property so obtained (see section 242(2)(b)), one or more of those kinds of conduct.”
(4) Omit section 286 (scope of powers: Scotland).
(5) In section 316 (general interpretation), after subsection (8A) insert—
“(8B) An enforcement authority in relation to a part of the United Kingdom may take proceedings there for an order under Chapter 2 of this Part in respect of any property or person, whether or not the property or person is (or is domiciled, resident or present) in that part of the United Kingdom.”
(6) In Schedule [Proceeds of crime: civil recovery of the proceeds etc of unlawful conduct] (proceeds of crime: civil recovery of the proceeds etc of unlawful conduct)—
(a) Part 1 makes provision about the enforcement of interim orders in the United Kingdom, and
(b) Part 2 makes provision about enforcement where property or evidence is outside the United Kingdom.
(7) The amendments made by this section and Part 2 of Schedule [Proceeds of crime: civil recovery of the proceeds etc of unlawful conduct] are deemed always to have had effect.
(8) The amendments made by this section and Schedule [Proceeds of crime: civil recovery of the proceeds etc of unlawful conduct] do not affect the extent to which provisions of the Proceeds of Crime Act 2002 (other than Chapter 2 of Part 5), or of any other enactment, apply in respect of persons or property outside the United Kingdom or outside a particular part of the United Kingdom.’.—(Mr Browne.)
With this it will be convenient to discuss the following:
Government new clause 13—Investigations.
Government new schedule 2—Proceeds of crime: civil recovery of the proceeds etc of unlawful conduct.
Government new schedule 3—Proceeds of crime: investigations.
Government amendments 114 to 117.
We now move on to amendments to the Proceeds of Crime Act 2002. These provisions respond to the Supreme Court’s judgment of July 2012 in the case of Perry v . SOCA, which has had significant adverse consequences on our civil recovery provisions. It was always the intention under part 5 of the Proceeds of Crime Act to be able to recover property representing the proceeds of unlawful conduct that was located abroad. Importantly, it was also intended that such property would have some connection with the United Kingdom. In the case of Perry v . SOCA, the Supreme Court ruled that the Act did not clearly create an overseas reach compared with other parts of the legislation. In the light of the judgment, the High Court of England and Wales is limited to making orders, including freezing, investigation and recovery orders, only against property in England and Wales. This means, for example, that if an individual had a villa located in Spain that was thought to be derived from the proceeds of unlawful conduct, the property could not be recovered, even if the unlawful conduct had occurred here in the United Kingdom—or more specifically, in England and Wales.
These amendments essentially put the Proceeds of Crime Act back in the position that we, law enforcement agencies and the courts thought that it was before the Supreme Court judgment. We are not trying to break new ground; we are trying only to recover ground that we had not realised, until the judgment, that we had lost. There is no new policy. The provisions do not extend the reach of the Proceeds of Crime Act beyond that envisaged in 2002, and they provide a non-exhaustive list of the connections whereby property located overseas can be subject to freezing, recovery and investigation in civil recovery proceedings in the United Kingdom. Those connections include that the unlawful conduct took place here, that the property is or has been here, and that the person who carried out the unlawful conduct, the victim or the persons who hold or have held the property are or have been here, or are a British citizen.
The provisions will have retrospective effect. They will come into force on Royal Assent to close the gap that has been created between what it was thought the Proceeds of Crime Act achieved and what it did achieve. Existing safeguards and protections relating to victims and bona fide purchases will continue to operate. These provisions operate on a UK-wide basis in the same way as the 2002 Act. However, they engage devolution considerations and therefore trigger the Sewel convention.
Regrettably, the Northern Ireland Executive have failed to reach agreement on a legislative consent motion for our provisions in response to the judgment. We are carefully considering the implications of the Executive’s decision with a view to bringing forward any necessary amendments to these provisions—
I was on my final paragraph. Would the hon. Gentleman rather that I gave way, or would he prefer to make his own contributions? I am not sure whether my giving way will help him to get an answer, but I will do my best.
I am extremely grateful to the Minister and I can see exactly what he is trying to do. After the provisions have been tidied up, will they cover criminals based in this country who fleece investors for money for foreign holiday complexes that are not then transferred to the investors, but are actually built and therefore benefit the criminals? Will those complexes now fall under the Proceeds of Crime Act, and could the money be pursued in that way?
My understanding is that the answer is yes, although that might well have been captured in any case. Our intention is that if there is a United Kingdom component, it will fall under the scope of the Act, as amended. Obviously we are not a global policeman when somebody has acquired assets in one place and uses them in another country but we cannot establish a UK connection or link, or, in other words, if a non-British citizen improperly acquires money in a non-UK country to buy a property in another non-UK country. However, if there is a sufficient UK component—if, for example, there were a non-UK citizen buying a property in the United Kingdom, or a UK citizen buying a property elsewhere in the world—we would see that as falling within the scope of the legislation and we would therefore be able to take action.
As I said, the Northern Ireland Executive have failed to reach agreement on a legislative consent motion for our amendments in response to the judgment. We are carefully considering the implications of the Executive’s decision with a view to bringing forward any necessary amendments to these provisions on Report so that the UK Parliament only legislates on matters within the legislative competence of the Northern Ireland Assembly with the consent of that Assembly.
Last week, when I took the opportunity to meet Mr Bristow, I put these points to him. I asked him whether the security of Northern Ireland would be undermined by not getting this legislative consent, and more importantly what impact it would have on the rest of the United Kingdom. His answer was chilling: the whole of the UK would be considerably undermined by failure to achieve this legislative consent. We really need to think outside the box about how to get around this, because otherwise the great work that this Bill, as enacted, will be able to achieve across the whole of the UK will be undermined. There is now a soft underbelly that is open to people trafficking, smuggling, drug dealers and serious and organised crime gangs. Does the Minister agree?
The hon. Gentleman has put his position on record very powerfully. I agree with the underlying sentiment of what he says. We do want the provisions to apply UK-wide because we believe that gives greater resilience. We want people in all the component parts of the United Kingdom to benefit from measures that we obviously believe are well-designed law enforcement measures, or we would not have brought them forward in the first place. I hope that people in Northern Ireland—and elsewhere in the United Kingdom, for that matter—do not treat what we are doing with an instinctive suspicion. When serious criminality takes place and undermines people’s livelihoods or safety, it is in all our interests to try to ensure that we take appropriate measures to protect people. That should apply just as much in Northern Ireland as it does in England or any other part of the United Kingdom.
Of course, we must respect the devolution settlement. We continue to discuss the implications with the Northern Ireland Executive, but we should not legislate on transferred matters without consent. That is, of course, the occasional frustration that exists when power is devolved to another part of the United Kingdom because the process of reaching conclusions becomes more cumbersome than if power is held exclusively in one place. However, we hope to make as much progress as possible in Northern Ireland, because we regard that as being in the interests of the people of Northern Ireland, as well as of the rest of the United Kingdom.
I really want the Minister to go further, because I agree that the whole principle is that we want this to apply equally and equitably across the United Kingdom. He indicated that he agreed with the thrust of what I said, but the message is that failure for Northern Ireland makes the whole Bill defective, because there is then an opening that crime gangs and others can exploit. It is not about the damage done to the citizens of Northern Ireland, much as I care for them; it is about the damage that will now be done to all the citizens of the United Kingdom of Great Britain and Northern Ireland. That is the point that the Minister has to address. We cannot move forward on the basis of a hope, a skip, a wish and a prayer. The issue must be addressed and, given the Assembly’s failure to deal with it, it must be addressed in this legislature, not in the Assembly.
I do not accept that the legislation is defective as a result of some of the shared frustrations that we have about Northern Ireland. In the context of the new clause, a person whose financial gains are acquired through criminal means in England, for example, could be affected, and that will apply regardless of deliberations in Northern Ireland.
I will make one concession, so to speak, to the hon. Gentleman’s argument, which is that politicians of all parties in Northern Ireland have to be careful about making Northern Ireland a place that is less resilient to serious and organised crime than other parts of the United Kingdom. Why would it be in the interests of the citizens of Northern Ireland to live in a place where, in some cases, dangerous criminals can act with greater freedom than they can in England? If I were a politician representing a constituency in Northern Ireland, I would be uncomfortable with the idea that dangerous or violent criminals could act with a degree of relative impunity in Northern Ireland compared with in other parts of the UK.
The Government are bringing forward measures on serious and organised crime because we want to give greater resilience to the system and because we realise that our constituents sometimes face serious threats—possibly to their lives, but certainly to their wider well-being. Those concerns apply throughout the United Kingdom, but just having such concerns is not good enough; we have to legislate to address them and that is what we are trying to do in Committee. I hope that that approach will be understood and taken on board by politicians in all parties in Northern Ireland.
I will not detain the Committee for long, because the Opposition support the measures in principle, but I want to question the Minister on consent and Northern Ireland. He indicated that amendments will be tabled on Report, which may be three or four weeks away—I am not party to the Government’s plans. What steps will the Government take between now and Report, given that the Minister has to look at the policy implications, to get the Northern Ireland Assembly on board? There may be UK citizens—even though they may not regard themselves as such—living in Northern Ireland with substantial property interests in the Republic of Ireland who may be undertaking criminal activity. It is therefore incumbent on the Minister, before we conclude our consideration of this group, to provide a road map as to how he will convince the Northern Ireland Assembly and how he will bring the matter before the House of Commons in a way that can be endorsed on a United Kingdom basis. My right hon. Friend the Member for Wythenshawe and Sale East, my hon. Friend the Member for North Antrim and I know Northern Ireland well, and cross-border criminal activity does occur. Property and assets may be held on both sides of the border by people undertaking such activity, so it is important that we do not have a great big hole in our back door that allows such activity to take place.
I agree. I have often found myself in the unenviable position during these discussions of trying to explain the constraints under which the United Kingdom Government sometimes operate while not wishing to suggest that I welcome those constraints. As I just said to the hon. Member for North Antrim, we bring forward this legislation because we take the threat of serious and organised crime seriously and think it should be taken seriously in all four component parts of the United Kingdom. As I said in my introductory remarks, if we believe that property bought by a British national in Spain was paid for with the proceeds of unlawful conduct that happened in the United Kingdom, the fact that the property is in Spain should not be a bar. We do not want it to be a bar, and we tabled the new clause so that it will come within the scope of the Bill. Otherwise, there would be a massive hole in the legislation. If a person used the illegal proceeds to buy a house just outside London in Kent it would fall within the scope of the Bill, but if they bought a nice house in Spain it would not. We do not want—this will need to be tested and understood—places closer to home than Spain to be suitable for buying properties without us being able to extend the legislation to cover them.
The only point I make is that I do not want it to occur. We agree with each other. I am in favour of the right hon. Gentleman and his right hon. Friend the Member for Wythenshawe and Sale East, who we are told is so knowledgeable and influential in this area, bringing any positive influence to bear. This is not a point of disagreement between the Government and the Opposition. We are working hard to ensure that the Bill is as effective as it can be.
We are working with politicians in Northern Ireland to achieve that. If necessary, we will table amendments on Report, the effects of which will be debated at that stage. We hope that the Northern Ireland Assembly will pass a legislative consent motion. However, if a legislative consent motion is not secured before Royal Assent, we will explore whether we can include a mechanism in the Bill to apply the provisions in full to Northern Ireland at a future date with the consent of the Assembly if it is willing to trigger that mechanism after Royal Assent. No stone is being left unturned in the Government’s attempt to make sure the provisions apply across the United Kingdom. Everybody on the Committee understands that. We welcome any assistance that can be brought to bear on that task. We all have the same objectives.
It is probably not appropriate to reveal the nature of those conversations in detail to the Committee. Obviously, a lot of the discussions between officials are of a more technical nature. The hon. Gentleman understands the position, and we have been pretty clear about it in the course of the past half hour. I hope that, by means of detailed negotiations or by means of all the political parties in Northern Ireland coming to the same conclusion about the desirability of thwarting serious organised crime, we reach an end point where people in Northern Ireland are as protected by these measure as people in England. That is the Government’s objective.