Economic Crime and Corporate Transparency Bill – in a Public Bill Committee at 11:00 am on 29th November 2022.
“(1) Where the conditions in paragraph(2) are fulfilled, a notice may be served in accordance with subsection(4) by the Director of Public Prosecutions, the Director of Serious Fraud Office, or the Director General of the National Crime Agency (hereafter, ‘the Director’) upon the holder of an account held at a bank in the United Kingdom.
(2) The conditions mentioned in paragraph(1) are that—
(a) the Director has reasonable grounds to believe that property held in the bank account is recoverable property obtained as a result of an economic crime offence;
(b) in relation to the bank account or any property in the bank account, a consent request has been made to an authorized officer under Section 335 of the Proceeds of Crime Act;
(c) an authorized officer refused the consent requested;
(d) a court has granted an extension of a moratorium period for 186 days under section 336A of the Proceeds of Crime Act 2002; and
(e) a court has granted approval to the Director to serve the notice.
(3) A notice under this section shall be a notice by way of representation and shall—
(a) state the name of the holder of the bank account to whom it is addressed;
(b) specify the details of the bank account and of the property or part of the property in the bank account which in the opinion of the Director is recoverable property;
(c) state a date on which, and a place and time at which, the holder of the bank account is required to attend a hearing of the Court to show cause why the property so specified is not recoverable property and should not be forfeited; and
(d) be served on—
(i) the holder of the bank account, and
(ii) the bank at which the account in question is held,
and if an address for service on the holder of the bank account is not known, service on the bank only shall be taken as sufficient for the purposes of this paragraph.
(4) In this section and section [
(a) ‘economic crime offence’ means an offence listed in Schedule 8 of this Act; and
(b) ‘recoverable property’ has the meaning given in section 304 of the Proceeds of Crime Act 2002.”—
With this it will be convenient to discuss new clause 81—Forfeiture of recoverable property obtained through economic crime: summary procedure—
‘(1) If the person on whom a notice under section [Forfeiture of recoverable property obtained through economic crime](3)(d)(i) served (the “respondent”) fails to attend the hearing as required by the notice, the Director may apply forthwith for a forfeiture order, and the Court may make such an order, without further notice to the respondent.
(2) If the respondent appears (whether in person or by a legal representative) at the hearing, the respondent may—
(a) at the hearing, satisfy the Court that the property is not recoverable property; or
(b) request that the question of whether or not the property is recoverable property be determined at such later date as the Court may order.
(3) If the respondent makes a request under subsection(2)(b), the respondent must provide an affidavit in answer to the notice within the period of 21days beginning with the date on which the matter is placed on the list, satisfying the Court that the property is not recoverable property.
(4) Unless the respondent satisfies the Court that the property is not recoverable property obtained as a result of an economic crime offence, the Court shall, upon the application of the Director, make a forfeiture order in relation to the property specified in the notice or any part of it.
(5) Property which is forfeited pursuant to a forfeiture order under this section shall be paid into the top slice of the Asset Recovery Incentivisation Scheme run by the Home Department.’
I will speak to this very quickly, too. This is an interesting new clause, because its purpose is to tackle the issue of suspicious wealth remaining frozen in bank accounts and serving no useful purpose. We propose a new, more straightforward, pragmatic solution to deal with suspicious wealth, enabling our enforcement agencies to confiscate the moneys in the bank and repurpose them so that much of the wealth can be used to fund and strengthen our anti-money laundering enforcement capacity and perhaps be given back, in some cases, to the nations from which it has been stolen.
When a banker sees a suspicious transaction, he or she is required to ask for consent from the police to allow the transaction to go ahead. If the police officer refuses consent, the moneys can be frozen in the bank account. Under our new clause, the money would then remain frozen for six months, and the director of the Serious Fraud Office could apply to the courts to confiscate or seize the moneys. They will be granted that application unless the respondent proves to the court that the funds do not have a criminal origin. The onus is on the respondent to prove that he or she has obtained the assets legitimately. The SFO does not have to prove that the respondent committed a criminal activity; it is up to the respondent to prove that the funds are legitimately and honestly acquired and are not linked to acts of criminality. The new clause is modelled on unexplained wealth orders.
This would add an important new weapon to our arsenal in the fight against economic crime, as it provides for the non-conviction-based confiscation of frozen assets. Although they are not my favourite people, the people of Jersey have introduced a very similar law and recently managed to secure £1.7 million that was frozen in accounts there. That was money paid to Lieutenant General Jeremiah Useni, who had held office in the Abacha regime in Nigeria, and the allegation was that it was the proceeds of corruption. Although he tried to get his money back, he could not, and a lot of the £1.7 million went back to Nigeria.
The British Bankers’ Association thinks that we have up to £50 million held in frozen accounts, untouched. We need a little touch of boldness from the Minister. He should not just accept the message of “resist” that he gets from his officials. He should give good consideration to this sensible, practical, good idea of seizing money stolen by bad people and giving it back to the citizens who have been robbed, or repurposing it to strengthen the fight against economic crime.
We welcome these new clauses, which would give effect to the Government’s stated intention to unlock the proceeds of crime held in bank accounts to fund law enforcement efforts to tackle economic crime. Their adoption would also optimise the potential of the defence against money laundering regime and streamline the process of UK law enforcement identifying tainted wealth and being able to seek its forfeiture.
I thank the right hon. Member for Barking. While I agree with the intent behind her new clauses, I argue that they narrow slightly the scope in which the state can already recover much of the proceeds of crime. While they attempt to simplify, the reality is that we are already recovering large sums. I am not saying that we could not do more—we certainly could—but I am not convinced that the new clauses would add significantly to existing legislation. Last year, for example, a record £115 million of proceeds of crime were recovered under existing powers.
That is not a brilliant argument, but I will pursue this issue on Report, as we are doing with other issues around seizing and freezing assets. I beg to ask leave to withdraw the motion.