Criminal Finances Bill (HC Bill 75)

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362L Restrictions on proceedings and remedies

(1) While an interim freezing order has effect—

(a) the High Court may stay any action, execution or other legal
process in respect of the property to which the order applies,
5and

(b) no distress may be levied, and no power to use the procedure in
Schedule 12 to the Tribunals, Courts and Enforcement Act 2007
(taking control of goods) may be exercised, against the property
to which the order applies except with the leave of the High
10Court and subject to any terms the court may impose.

(2) If a court (whether the High Court or any other court) in which
proceedings are pending in respect of any property is satisfied that an
interim freezing order has been applied for or made in respect of the
property, it may—

(a) 15stay the proceedings, or

(b) allow them to continue on any terms it thinks fit.

(3) If an interim freezing order applies to a tenancy of any premises, a right
of forfeiture in relation to the premises is exercisable—

(a) only with the leave of the High Court, and

(b) 20subject to any terms that the court may impose.

(4) The reference in subsection (3) to a “right of forfeiture” in relation to
premises is to the right of a landlord or other person to whom rent is
payable to exercise a right of forfeiture by peaceable re-entry to the
premises in respect of any failure by the tenant to comply with a term
25or condition of the tenancy.

(5) Before exercising a power conferred by this section, the court must (as
well as giving the parties to any proceedings concerned an opportunity
to be heard) give such an opportunity to any person who may be
affected by the court’s decision.

362M 30Receivers in connection with interim freezing orders

(1) This section applies where the High Court makes an interim freezing
order on an application by an enforcement authority.

(2) The court may, on an application by the enforcement authority, by
order appoint a receiver in respect of any property to which the interim
35freezing order applies.

(3) An application under subsection (2) may be made at the same time as
the application for the interim freezing order or at any time afterwards.

(4) The application may be made without notice if the circumstances of the
case are such that notice of the application would prejudice the right of
40the enforcement authority to obtain a recovery order in respect of any
property.

(5) In its application the enforcement authority must nominate a suitably
qualified person for appointment as a receiver.

(6) The person nominated may be a member of staff of the enforcement
45authority.

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(7) The enforcement authority may apply a sum received by it under
section 280(2) in making payment of the remuneration and expenses of
a receiver appointed under this section.

(8) Subsection (7) does not apply in relation to the remuneration of the
5receiver if that person is a member of staff of the enforcement authority
(but it does apply in relation to such remuneration if the receiver is a
person providing services under arrangements made by the
enforcement authority).

362N Powers of receivers appointed under section 362M

(1) 10If the High Court appoints a receiver under section 362M on an
application by an enforcement authority, the court may act under this
section on the application of the authority.

(2) The court may by order authorise or require the receiver—

(a) to exercise any of the powers mentioned in paragraph 5 of
15Schedule 6 (management powers) in relation to any property in
respect of which the receiver is appointed;

(b) to take any other steps the court thinks appropriate in
connection with the management of any such property
(including securing the detention, custody or preservation of
20the property in order to manage it).

(3) The court may by order require any person in respect of whose
property the receiver is appointed—

(a) to bring the property to a place (in England and Wales or, as the
case may be, Northern Ireland) specified by the receiver or to
25place it in the custody of the receiver (if in either case the person
is able to do so);

(b) to do anything the person is reasonably required to do by the
receiver for the preservation of the property.

(4) The court may by order require any person in respect of whose
30property the receiver is appointed to bring any documents relating to
the property which are in that person’s possession or control to a place
(in England and Wales or, as the case may be, Northern Ireland)
specified by the receiver or to place them in the custody of the receiver.

(5) Any prohibition on dealing with property imposed by an interim
35freezing order does not prevent a person from complying with any
requirements imposed by virtue of this section.

(6) Subsection (7) applies in a case where—

(a) the receiver deals with property that is not property in respect
of which the receiver was appointed under section 362M, but

(b) 40at the time of dealing with the property the receiver believed on
reasonable grounds that he or she was entitled to do so by virtue
of the appointment.

(7) The receiver is not liable to any person in respect of any loss or damage
resulting from the receiver’s dealing with the property.

(8) 45But subsection (7) does not apply to the extent that the loss or damage
is caused by the receiver’s negligence.

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362O Supervision of section 362M receiver and variations

(1) Any of the following persons may at any time apply to the High Court
for directions as to the exercise of the functions of a receiver appointed
under section 362M

(a) 5the receiver;

(b) a party to the proceedings for the appointment of the receiver or
the interim freezing order concerned;

(c) a person affected by an action taken by the receiver;

(d) a person who may be affected by an action proposed to be taken
10by the receiver.

(2) Before it gives directions under subsection (1) the court must give an
opportunity to be heard to—

(a) the receiver;

(b) the parties to the proceedings for the appointment of the
15receiver and for the interim freezing order concerned;

(c) a person who may be interested in the application under
subsection (1).

(3) The court may at any time vary or discharge—

(a) the appointment of a receiver under section 362M,

(b) 20an order under section 362N, or

(c) directions under this section.

(4) Before exercising a power under subsection (3) the court must give an
opportunity to be heard to—

(a) the receiver;

(b) 25the parties to the proceedings for the appointment of the
receiver, for the order under section 362N or (as the case may
be) for the directions under this section;

(c) the parties to the proceedings for the interim freezing order
concerned;

(d) 30any person who may be affected by the court’s decision.

362P Registration

Sections 248 (registration: England and Wales) and 249 (registration:
Northern Ireland) apply in relation to interim freezing orders as they
apply in relation to property freezing orders under section 245A.”

3 35External assistance

After section 362P of the Proceeds of Crime Act 2002 (inserted by section 2
above) insert—

“Unexplained wealth orders: enforcement abroad
362Q Enforcement abroad: enforcement authority

(1) 40This section applies if—

(a) the High Court makes an unexplained wealth order in respect
of any property,

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(b) it appears to the enforcement authority that the risk mentioned
in section 362I(2) applies in relation to the property, and

(c) the enforcement authority believes that the property is in a
country outside the United Kingdom (the receiving country).

(2) 5The enforcement authority may send a request for assistance in relation
to the property to the Secretary of State with a view to it being
forwarded under this section.

(3) The Secretary of State may forward the request for assistance to the
government of the receiving country.

(4) 10A request for assistance under this section is a request to the
government of the receiving country—

(a) to secure that any person is prohibited from dealing with the
property;

(b) for assistance in connection with the management of the
15property, including with securing its detention, custody or
preservation.

362R Enforcement abroad: receiver

(1) This section applies if—

(a) an interim freezing order has effect in relation to property, and

(b) 20the receiver appointed under section 362M in respect of the
property believes that it is in a country outside the United
Kingdom (the receiving country).

(2) The receiver may send a request for assistance in relation to the
property to the Secretary of State with a view to it being forwarded
25under this section.

(3) The Secretary of State must forward the request for assistance to the
government of the receiving country.

(4) A request for assistance under this section is a request to the
government of the receiving country—

(a) 30to secure that any person is prohibited from dealing with the
property;

(b) for assistance in connection with the management of the
property, including with securing its detention, custody or
preservation.”

35Unexplained wealth orders: Scotland

4 Unexplained wealth orders: Scotland

In Chapter 3 of Part 8 of the Proceeds of Crime Act 2002 (investigations:
Scotland), after section 396 insert—

“Unexplained wealth orders
396A 40Unexplained wealth orders

(1) The Court of Session may, on an application made by the Scottish
Ministers, make an unexplained wealth order in respect of any

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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) specify or describe the property in respect of which the order is
5sought, and

(b) specify the person whom the Scottish Ministers think 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
10provide 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
15were 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
20writing, 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) 25The 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).

396B Requirements for making of unexplained wealth order

(1) 30These are the requirements for the making of an unexplained wealth
order in respect of any property.

(2) The Court of Session must be satisfied that—

(a) the respondent holds the property (whether or not there are
other persons who also hold the property), and

(b) 35the value of the property is greater than £100,000.

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

(4) 40The Court of Session must be satisfied that—

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

(b) there are reasonable grounds for suspecting that—

(i) the respondent is, or has been, involved in serious crime
(whether in a part of the United Kingdom or elsewhere),
45or

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

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

(6) For the purposes of subsection (3)

(a) regard is to be had to any heritable security, charge or other
10kind of security that it is reasonable to assume was or may have
been available to the respondent for the purposes of obtaining
the property;

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

(c) 15income is “lawfully obtained” if it is obtained lawfully under
the laws of the country from where the income arises;

(d) “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
20the time of the making of the application for the order.

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

(a) an individual who is, or has been, entrusted with prominent
public functions by an international organisation or by a State
25other than the United Kingdom or another EEA State,

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

(c) known 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) 30whether a person has been entrusted with prominent public
functions (see point (9) of that Article),

(b) whether 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
35point (11) of that Article).

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

(a) a 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
40particular sections 2, 2A and 3 of that Act);

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

(10) Where the property in respect of which the order is sought comprises
45more 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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396C 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 396B(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 396A(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 396D);

(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.

396D Effect of order: cases of compliance or purported compliance

(1) 35This section applies in a case where 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 before the end of the response period (as defined by section
396C(4)).

(2) 40If an interim freezing order has effect in relation to the property (see
section 396I), the Scottish Ministers must determine what enforcement
or investigatory proceedings, if any, they consider 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 Scottish Ministers must notify the Court of Session 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 Scottish Ministers may (at any time) determine what, if any,
enforcement or investigatory proceedings they consider 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) in relation to the property.

(7) For the purposes of this section—

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

(c) 20where 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,
or the documents are produced, at that address,

25and 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) Part 3 (confiscation proceedings Scotland),

(b) 30Part 5 (civil recovery of the proceeds of unlawful conduct), or

(c) other provisions of this Chapter.

396E Offence

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

(a) 35makes a statement that the person knows to be false or
misleading 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) 40on summary conviction, to imprisonment for a term not
exceeding 12 months, or to a fine not exceeding the statutory
maximum, or to both, or

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

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396F Statements

(1) A 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) 5Subsection (1) does not apply—

(a) in the case of proceedings under Part 3,

(b) on a prosecution for an offence under section 396E,

(c) on a prosecution for perjury, or

(d) on a prosecution for some other offence where, in giving
10evidence, 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) 15a question relating to it is asked,

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

396G Disclosure of information, copying of documents, etc

(1) An unexplained wealth order does not confer the right to require a
20person to answer any question, provide any information or produce
any document which the person would be entitled to refuse to answer,
provide or produce on grounds of legal privilege.

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

(3) 25The Scottish Ministers 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
30with 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 Scottish Ministers have reasonable grounds to believe that the
documents—

(a) may need to be produced for the purposes of any legal
35proceedings, and

(b) might otherwise be unavailable for those purposes,

they may be retained until the proceedings are concluded.

396H Supplementary

(1) An application for an unexplained wealth order may be made without
40notice.

(2) Provision may be made by rules of court as to the discharge and
variation of unexplained wealth orders.

(3) An application to discharge or vary an unexplained wealth order may
be made to the Court of Session by—

(a) 45the Scottish Ministers, or

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(b) any person affected by the order.

(4) The Court of Session may—

(a) discharge the order;

(b) vary the order.”

5 5Interim freezing orders

After section 396H of the Proceeds of Crime Act 2002 (inserted by section 4
above) insert—

“Unexplained wealth orders: interim freezing of property
396I Application for interim freezing order

(1) 10This section applies where the Court of Session 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
15obtained 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 396K).

(4) 20An interim freezing order—

(a) may be made only on the application of the Scottish Ministers,

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

(c) may be combined in one document with the unexplained
25wealth 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
order in respect of the property must also be made without notice.

396J Variation and recall of interim freezing order

(1) 30The Court of Session may at any time vary or recall an interim freezing
order.

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

(3) 35The 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
period in relation to the property concerned.

(4) The second case is where—

(a) 40a relevant application has been made before the end of the
applicable 48 hour period in relation to the property concerned,
and