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| The Committee of Public Accounts has agreed to the following Report:
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| HM CUSTOMS AND EXCISE: THE SEIZURE OF DRUG TRAFFICKERS' ASSETS
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| INTRODUCTION AND SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS
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C&AG's Report (HC 668 of Session 1995-96), paras 1.1, 1.7 and 1.10
Q 116
Q 90
| 1. The Drug Trafficking Offences Act 1986 gave the courts power to make confiscation orders so as to deprive convicted drug traffickers of the illicit proceeds of their trade. The Criminal Justice (International Co-operation) Act 1990 allowed sums of cash being imported and exported to be seized and forfeited if they were linked to drug trafficking. In February 1995, the Drug Trafficking Act 1994 came into effect consolidating the 1986 and 1990 legislation. By December 1996 confiscation orders of £64.8 million had been made, against which there had been recoveries of £16.1 million, or 25 per cent. Cash forfeited, by March 1997, amounted to £7.6 million, with a further £8.8 million under investigation.
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| 2. On the basis of a Report by the Comptroller and Auditor General (C&AG), our predecessors examined the contribution made by Customs and Excise to the achievement of the objectives of the legislation. Based on our predecessors' enquiries, our main conclusions and recommendations are as follows:
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| On obtaining and enforcing confiscation orders
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| (i) We are concerned that the Department identified assets worth only 39 per cent of the assessed criminal proceeds for which confiscation orders had been made and that, during the period under investigation by the National Audit Office, no recoveries had been made against the remaining 61 per cent of the value. We endorse the Department's intention to give greater emphasis to the identification of assets during future financial investigations (paragraph 17).
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| (ii) We note that, having obtained confiscation orders in excess of identified assets, the Department are able to pursue previous debts without further recourse to the courts. We note that, as a result of revisiting cases, the Department recently secured further recoveries in three cases. We look to the Department to ensure that all significant cases in which there is a reasonable prospect of further recovery are revisited (paragraph 18).
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| (iii) We are concerned that some drug traffickers may enjoy the benefits of hidden assets following their release from prison. We note that the Department expect the changes introduced by the Drug Trafficking Act 1994 to act as a more effective lever on convicted drug traffickers to disclose previously hidden assets (paragraph 19).
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| (iv) We note the Department's intention to improve liaison with the Prison Service regarding the impending release dates of those convicted traffickers who have not fully satisfied the terms of confiscation orders, and also to revisit cases where previously released offenders had not served their default sentences. We look to them to seek to obtain further recoveries of proceeds, or to ensure that default sentences are served, in such cases (paragraph 20).
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| (v) We are disappointed that, by the end of 1996, only £16.1 million (25 per cent) had been recovered in respect of confiscation orders totalling £64.8 million. We are concerned that the intention of the legislation to deprive drug-traffickers of their illicit proceeds is not being fully achieved. We note the steps taken by the Department to secure improvements in the law through their membership of the Home Office Working Group on Confiscation Legislation, and look to the Department to seek further simplification of procedures and strengthening of their powers as appropriate (paragraph 21).
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| (vi) We are concerned that a lack of effectual liaison between the Department and the magistrates courts may sometimes have limited the successful confiscation of assets. We endorse the Department's initiative to assume lead responsibility for the recovery of assets in all major cases, and we look to them to agree clear procedures with the courts for assigning responsibility for the enforcement of confiscation orders in all cases (paragraph 22).
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| (vii) We are concerned that the full potential value of assets may not be realised due to delay in the appointment of receivers. We recommend that the Department consider appointing receivers at an early stage in all sizeable cases. We recognise that the costs of appointing receivers may sometimes be high in relation to the value of the recoveries made and endorse the Department's intention to promote greater competition in order to contain costs (paragraph 23).
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| On the integrity of investigating staff
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| (viii) We recognise the very high standards of integrity set by the Department and their staff. We welcome their assurances about the controls in place for the conduct of overseas enquiries. We note, however, that drug trafficking is lucrative, and a major source of corruption worldwide. We urge the Department to maintain vigilance against the risks of corruption, to ensure that standards of case monitoring and documentation remain high, and to regularly assess the personal integrity of investigators both before and during assignments (paragraph 26).
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| On the forfeiture of cash
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| (ix) We are concerned that, in the first 4½ years of the legislation, the Department have only succeeded in achieving the forfeiture of some £8 million of cash. We note that greater detection of electronic transfers may be leading drug smugglers to make greater use of cash, and urge the Department to increase their efforts to disrupt the drug trade through increased forfeitures of cash (paragraph 29).
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