Criminal Finances Bill (HC Bill 75)

A

BILL

TO

Amend the Proceeds of Crime Act 2002; make provision in connection with
terrorist property; create corporate offences for cases where a person
associated with a body corporate or partnership facilitates the commission by
another person of a tax evasion offence; and for connected purposes.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

Part 1 Proceeds of crime

CHAPTER 1 Investigations

Unexplained wealth orders: England and Wales and Northern Ireland

1 5Unexplained wealth orders: England and Wales and Northern Ireland

In Chapter 2 of Part 8 of the Proceeds of Crime Act 2002 (investigations:
England and Wales and Northern Ireland), after section 362 insert—

“Unexplained wealth orders
362A Unexplained wealth orders

(1) 10The High Court may, on an application made by an enforcement
authority, make an unexplained wealth order in respect of any
property if the court is satisfied that each of the requirements for the
making of the order is fulfilled.

(2) An application for an order must—

(a) 15specify or describe the property in respect of which the order is
sought, and

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(b) specify the person whom the enforcement authority thinks
holds the property (“the respondent”) (and the person specified
may include a person outside the United Kingdom).

(3) An unexplained wealth order is an order requiring the respondent to
5provide a statement—

(a) setting out the nature and extent of the respondent’s interest in
the property in respect of which the order is made, and

(b) explaining how the respondent obtained the property
(including, in particular, how any costs incurred in obtaining it
10were met).

(4) The order must specify—

(a) the form and manner in which the statement is to be given,

(b) the person to whom it is to be given, and

(c) the place at which it is to be given or, if it is to be given in
15writing, the address to which it is to be sent.

(5) The order may, in connection with requiring the respondent to provide
the statement mentioned in subsection (3), also require the respondent
to provide information, or to produce documents, of a kind specified or
described in the order.

(6) 20The respondent must comply with the requirements imposed by an
unexplained wealth order within whatever period the court may
specify (and different periods may be specified in relation to different
requirements).

(7) In this Chapter “enforcement authority” means—

(a) 25the National Crime Agency,

(b) Her Majesty’s Revenue and Customs,

(c) the Financial Conduct Authority,

(d) the Director of the Serious Fraud Office, or

(e) the Director of Public Prosecutions (in relation to England and
30Wales) or the Director of Public Prosecutions for Northern
Ireland (in relation to Northern Ireland).

362B Requirements for making of unexplained wealth order

(1) These are the requirements for the making of an unexplained wealth
order in respect of any property.

(2) 35The High Court must be satisfied that—

(a) the respondent holds the property, and

(b) the value of the property is greater than £100,000.

(3) The High Court must be satisfied that there are reasonable grounds for
suspecting that the known sources of the respondent’s lawfully
40obtained income would have been insufficient for the purposes of
enabling the respondent to obtain the property.

(4) The High Court must be satisfied that—

(a) the respondent is a politically exposed person, or

(b) there are reasonable grounds for suspecting that—

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(i) the respondent is, or has been, involved in serious crime
(whether in a part of the United Kingdom or elsewhere),
or

(ii) a person connected with the respondent is, or has been,
5so involved.

(5) It does not matter for the purposes of subsection (2)(a)—

(a) whether or not there are other persons who also hold the
property;

(b) whether the property was obtained by the respondent before or
10after the coming into force of this section.

(6) For the purposes of subsection (3)

(a) regard is to be had to any mortgage, charge or other kind of
security that it is reasonable to assume was or may have been
available to the respondent for the purposes of obtaining the
15property;

(b) it is to be assumed that the respondent obtained the property for
a price equivalent to its market value;

(c) income is “lawfully obtained” if it is obtained lawfully under
the laws of the country from where the income arises;

(d) 20“known” sources of the respondent’s income are the sources of
income (whether arising from employment, assets or otherwise)
that are reasonably ascertainable from available information at
the time of the making of the application for the order.

(7) In subsection (4)(a), “politically exposed person” means a person who
25is—

(a) an individual who is, or has been, entrusted with prominent
public functions by an international organisation or by a State
other than the United Kingdom or another EEA State,

(b) a family member of a person within paragraph (a), or

(c) 30known to be a close associate of a person within that paragraph.

(8) Article 3 of Directive 2015/849/EU of the European Parliament and of
the Council of 20 May 2015 applies for the purposes of determining—

(a) whether a person has been entrusted with prominent public
functions (see point (9) of that Article),

(b) 35whether a person is a family member (see point (10) of that
Article), and

(c) whether a person is known to be a close associate of another (see
point (11) of that Article).

(9) For the purposes of subsection (4)(b)—

(a) 40a person is involved in serious crime in a part of the United
Kingdom or elsewhere if the person would be so involved for
the purposes of Part 1 of the Serious Crime Act 2007 (see in
particular sections 2, 2A and 3 of that Act);

(b) section 1122 of the Corporation Tax Act 2010 (“connected”
45persons) applies in determining whether a person is connected
with another.

(10) Where the property in respect of which the order is sought comprises
more than one item of property, the reference in subsection (2)(b) to the
value of the property is to the total value of those items.

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362C Effect of order: cases of non-compliance

(1) This section applies in a case where the respondent fails, without
reasonable excuse, to comply with the requirements imposed by an
unexplained wealth order in respect of any property before the end of
5the response period.

(2) The property is to be presumed to be recoverable property for the
purposes of any proceedings taken in respect of the property under
Part 5, unless the contrary is shown.

(3) The presumption in subsection (2) applies in relation to property—

(a) 10only so far as relating to the respondent’s interest in the
property, and

(b) only if the value of that interest is greater than the sum specified
in section 362B(2)(b).

It is for the court hearing the proceedings under Part 5 in relation to
15which reliance is placed on the presumption to determine the matters
in this subsection.

(4) The “response period” is whatever period the court specifies under
section 362A(6) as the period within which the requirements imposed
by the order are to be complied with (or the period ending the latest, if
20more than one is specified in respect of different requirements).

(5) For the purposes of subsection (1)

(a) a respondent who purports to comply with the requirements
imposed by an unexplained wealth order is not to be taken to
have failed to comply with the order (see instead section 362D);

(b) 25where an unexplained wealth order imposes more than one
requirement on the respondent, the respondent is to be taken to
have failed to comply with the requirements imposed by the
order unless each of the requirements is complied with or is
purported to be complied with.

(6) 30Where an unexplained wealth order is made in respect of property
comprising more than one item of property, the reference in subsection
(3)(b) to the value of the respondent’s interest in the property is to the
total value of the respondent’s interest in those items.

362D Effect of order: cases of compliance or purported compliance

(1) 35This section applies in a case where, before the end of the response
period (as defined by section 362C(4)), the respondent complies, or
purports to comply, with the requirements imposed by an unexplained
wealth order in respect of any property in relation to which the order is
made.

(2) 40If an interim freezing order has effect in relation to the property (see
section 362I), the enforcement authority must determine what
enforcement or investigatory proceedings, if any, it considers ought to
be taken in relation to the property.

(3) A determination under subsection (2) must be made within the period
45of 60 days starting with the day of compliance.

(4) If the determination under subsection (2) is that no further enforcement
or investigatory proceedings ought to be taken in relation to the

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property, the enforcement authority must notify the High Court of that
fact as soon as reasonably practicable (and in any event before the end
of the 60 day period mentioned in subsection (3)).

(5) If there is no interim freezing order in effect in relation to the property,
5the enforcement authority may (at any time) determine what, if any,
enforcement or investigatory proceedings it considers ought to be
taken in relation to the property.

(6) A determination under this section to take no further enforcement or
investigatory proceedings in relation to any property does not prevent
10such proceedings being taken subsequently (whether as a result of new
information or otherwise, and whether or not by the same enforcement
authority) in relation to the property.

(7) For the purposes of this section—

(a) the respondent complies with the requirements imposed by an
15unexplained wealth order only if all of the requirements are
complied with,

(b) references to the day of compliance are to the day on which the
requirements imposed by the order are complied with (or, if the
requirements are complied with over more than one day, the
20last of those days), and

(c) where an order requires the sending of information in writing
to, or the production of documents at, an address specified in
the order, compliance with the order (so far as relating to that
requirement) occurs when the written information is received,
25or the documents are produced, at that address,

and in paragraphs (a) to (c) references to compliance include purported
compliance.

(8) In this section “enforcement or investigatory proceedings” means any
proceedings in relation to property taken under—

(a) 30Part 2 or 4 (confiscation proceedings in England and Wales or
Northern Ireland) (in relation to cases where the enforcement
authority is also a prosecuting authority for the purposes of that
Part),

(b) Part 5 (civil recovery of the proceeds of unlawful conduct), or

(c) 35other provisions of this Chapter.

362E Offence

(1) A person commits an offence if, in purported compliance with a
requirement imposed by an unexplained wealth order, the person—

(a) makes a statement that the person knows to be false or
40misleading in a material particular, or

(b) recklessly makes a statement that is false or misleading in a
material particular.

(2) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not
45exceeding 2 years, or to a fine, or to both;

(b) on summary conviction in England and Wales, to
imprisonment for a term not exceeding 12 months, or to a fine,
or to both;

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(c) on summary conviction in Northern Ireland, to imprisonment
for a term not exceeding 6 months, or to a fine not exceeding the
statutory maximum, or to both.

(3) In relation to an offence committed before the coming into force of
5section 282 of the Criminal Justice Act 2003 (increase in maximum
sentence on summary conviction of offence triable either way), the
reference in subsection (2)(b) to 12 months is to be read as a reference to
6 months.

362F Statements

(1) 10A statement made by a person in response to a requirement imposed by
an unexplained wealth order may not be used in evidence against that
person in criminal proceedings.

(2) Subsection (1) does not apply—

(a) in the case of proceedings under Part 2 or 4,

(b) 15on a prosecution for an offence under section 362E,

(c) on a prosecution for an offence under section 5 of the Perjury
Act 1911 or Article 10 of the Perjury (Northern Ireland) Order
1979 (S.I. 1979/1714 (N.I. 19)S.I. 1979/1714 (N.I. 19)) (false statements), or

(d) on a prosecution for some other offence where, in giving
20evidence, the person makes a statement inconsistent with the
statement mentioned in subsection (1).

(3) A statement may not be used by virtue of subsection (2)(d) against a
person unless—

(a) evidence relating to it is adduced, or

(b) 25a question relating to it is asked,

by the person or on the person’s behalf in proceedings arising out of the
prosecution.

362G Disclosure of information, copying of documents, etc

(1) An unexplained wealth order has effect in spite of any restriction on the
30disclosure of information (however imposed).

(2) But subsections (1) to (5) of section 361 (rights in connection with
privileged information, questions and material) apply in relation to
requirements imposed by an unexplained wealth order as they apply in
relation to requirements imposed under a disclosure order.

(3) 35The enforcement authority may take copies of any documents
produced by the respondent in connection with complying with the
requirements imposed by an unexplained wealth order.

(4) Documents so produced may also be retained for so long as it is
necessary to retain them (as opposed to a copy of them) in connection
40with an investigation of a kind mentioned in section 341 in relation to
the property in respect of which the unexplained wealth order is made.

(5) But if the enforcement authority has reasonable grounds to believe that
the documents—

(a) may need to be produced for the purposes of any legal
45proceedings, and

(b) might otherwise be unavailable for those purposes,

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they may be retained until the proceedings are concluded.

362H Supplementary

(1) An application for an unexplained wealth order may be made without
notice.

(2) 5Rules of court may make provision as to the practice and procedure to
be followed in connection with proceedings relating to unexplained
wealth orders before the High Court in Northern Ireland.

(3) An application to the High Court in Northern Ireland to discharge or
vary an unexplained wealth order may be made by—

(a) 10the enforcement authority, or

(b) the respondent.

(4) The High Court in Northern Ireland—

(a) may discharge the order;

(b) may vary the order.”

2 15Interim freezing orders

After section 362H of the Proceeds of Crime Act 2002 (inserted by section 1
above) insert—

“Unexplained wealth orders: interim freezing of property
362I Application for interim freezing order

(1) 20This section applies where the High Court makes an unexplained
wealth order in respect of any property.

(2) The court may make an interim freezing order in respect of the
property if the court considers it necessary to do so for the purposes of
avoiding the risk of any recovery order that might subsequently be
25obtained being frustrated.

(3) An interim freezing order is an order that prohibits the respondent to
the unexplained wealth order, and any other person with an interest in
the property, from in any way dealing with the property (subject to any
exclusions under section 362K).

(4) 30An interim freezing order—

(a) may be made only on the application of the enforcement
authority that applied for the unexplained wealth order to
which the interim freezing order relates,

(b) must be made in the same proceedings as those in which the
35unexplained wealth order is made, and

(c) may be combined in one document with the unexplained
wealth order.

(5) If an application for an unexplained wealth order in respect of any
property is made without notice, an application for an interim freezing
40order in respect of the property must also be made without notice.

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362J Variation and discharge of interim freezing order

(1) The High Court may at any time vary or discharge an interim freezing
order.

(2) The High Court must discharge an interim freezing order, so far as it
5has effect in relation to any property, in each of the following three
cases.

(3) The first case is where—

(a) the applicable 48 hour period has ended, and

(b) a relevant application has not been made before the end of that
10period in relation to the property concerned.

(4) The second case is where—

(a) a relevant application has been made before the end of the
applicable 48 hour period in relation to the property concerned,
and

(b) 15proceedings on the application (including any on appeal) have
been determined or otherwise disposed of.

(5) The third case is where the court has received a notification in relation
to the property concerned under section 362D(4) (notification from
enforcement authority of no further proceedings).

(6) 20The “applicable 48 hour period” is to be read as follows—

(a) in a case where the respondent complies, or purports to comply,
with the requirements imposed by an unexplained wealth order
before the end of the response period, it is the period of 48 hours
beginning with the day after the day with which the 60 day
25period mentioned in section 362D(3) ends;

(b) in any other case, it is the period of 48 hours beginning with the
day after the day with which the response period ends.

(7) In calculating a period of 48 hours for the purposes of subsection (6), no
account is to be taken of—

(a) 30any Saturday or Sunday,

(b) Christmas Day,

(c) Good Friday, or

(d) any day that is a bank holiday under the Banking and Financial
Dealings Act 1971 in the part of the United Kingdom in which
35the interim freezing order concerned is made.

(8) Section 362D(7) applies for the purposes of subsection (6) in
determining whether a person complies, or purports to comply, with
the requirements imposed by an unexplained wealth order and when
such compliance, or purported compliance, takes place.

(9) 40Before exercising power under this section to vary or discharge an
interim freezing order, the court must (as well as giving the parties to
the proceedings an opportunity to be heard) give such an opportunity
to any person who may be affected by its decision.

(10) Subsection (9) does not apply where the court is acting as required by
45subsection (2).

(11) In this section—

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  • “relevant application” means an application for—

    (a)

    a restraint order under section 41 or 190,

    (b)

    a property freezing order, or

    (c)

    an interim receiving order;

  • 5“response period” has the meaning given by section 362C(4).

362K Exclusions

(1) The power to vary an interim freezing order includes (amongst other
things) power to make exclusions as follows—

(a) power to exclude property from the order, and

(b) 10power, otherwise than by excluding property from the order, to
make exclusions from the prohibition on dealing with the
property to which the order applies.

(2) Exclusions from the prohibition on dealing with the property to which
the order applies (other than exclusions of property from the order)
15may also be made when the order is made.

(3) An exclusion may (amongst other things) make provision for the
purpose of enabling any person—

(a) to meet the person’s reasonable living expenses, or

(b) to carry on any trade, business, profession or occupation.

(4) 20An exclusion may be made subject to conditions.

(5) Where the court exercises the power to make an exclusion for the
purpose of enabling a person to meet legal expenses that the person has
incurred, or may incur, in respect of proceedings under this Chapter, it
must ensure that the exclusion—

(a) 25is limited to reasonable legal expenses that the person has
reasonably incurred or reasonably incurs,

(b) specifies the total amount that may be released for legal
expenses in pursuance of the exclusion, and

(c) is made subject to the same conditions as would be the required
30conditions (see section 286A) if the order had been made under
section 245A (in addition to any conditions under subsection
(4)).

(6) The court, in deciding whether to make an exclusion for the purpose of
enabling a person to meet legal expenses in respect of proceedings
35under this Chapter—

(a) must have regard to the desirability of the person being
represented in any proceedings under this Chapter in which the
person is a participant, and

(b) must disregard the possibility that legal representation of the
40person in any such proceedings might, were an exclusion not
made, be made available under arrangements made for the
purposes of Part 1 of the Legal Aid, Sentencing and Punishment
of Offenders Act 2012 or funded by the Northern Ireland Legal
Services Commission.

(7) 45If excluded property is not specified in the order it must be described
in the order in general terms.