Clause 89: Money laundering offences

144.     Under clause 89, the three new principal money laundering offences created by the Bill are all defined as money laundering offences, as are the inchoate offences of conspiracy etc. to commit one of those offences. A conviction of any of these offences is conclusive, under the Bill, of a criminal lifestyle and a conviction of any one or more of them will thus trigger an examination of the defendant's benefit from general criminal conduct.

Clause 90: Other interpretative provisions

145.     The definition of a criminal investigation in subsection (2) is required because the power to make a restraint order is brought forward, by clause 41(2), to the beginning of a criminal investigation.

General

Clause 91: Procedure on appeal to the Court of Appeal

146.     Clause 91 establishes the general rules that will apply to any appeal to the Court of Appeal under Part 2 of the Bill. The first of these is that the Court of Appeal's leave to appeal is required. The second is that the appeal lies (subject to anything in rules of court under section 53(1) of the Supreme Court Act 1981) to the criminal division of the Court of Appeal.

147.     Clause 91 also enables the Secretary of State to make an order in relation to appeals to the Court of Appeal under Part 2 containing provision corresponding to any provisions of the Criminal Appeal Act 1968. An order of this kind will cover routine matters such as the procedures for obtaining leave to appeal and transcripts.

Clause 92: Procedure on appeal to the House of Lords

148.     Clause 92 establishes the general rules that will apply to any appeal to the House of Lords under Part 2 of the Bill. Like clause 91, clause 92 enables the Secretary of State to make an order in relation to appeals to the House of Lords under this Part containing provision corresponding to any provisions of the Criminal Appeal Act 1968. An order of this kind will cover matters such as those mentioned above in relation to clause 91.

Clause 93: Crown Court Rules

149.     Restraint and receivership are High Court civil law functions so the applicable rules of court are currently found in the Civil Procedure Rules. Clause 93 puts it beyond doubt that these matters may in future be dealt with in Crown Court Rules.

Part 3: Confiscation: Scotland

Confiscation orders

Clause 94: Making of order

150.     Clause 94 provides that a confiscation order under the Bill is an order requiring an accused person convicted of a criminal offence or offences to pay a sum of money representing the accused person's benefit from crime. The approach of the Bill therefore reflects that adopted by the existing legislation. However, under the existing legislation, confiscation orders can only be imposed following conviction on indictment or for offences on summary complaint if the offence is punishable by a fine of an amount greater than level 5 on the standard scale or by imprisonment for more than 3 months or both. Clause 94 extends this to cover all summary offences. Confiscation orders will be made by the High Court or the sheriff court; the courts will continue to have a discretion on whether to impose a confiscation order in a particular case and as to how much to confiscate.

151.     Clause 94 also makes it clear that the Bill contains two different confiscation regimes, only one of which may be applied in any particular case. One enables the confiscation of an accused's benefit from "general criminal conduct", the other the confiscation of an accused's benefit from "particular criminal conduct". General criminal conduct means any criminal conduct of the accused whenever the criminal conduct occurred (see clause 146). Particular criminal conduct means the offences of which the accused has been convicted in the current proceedings to which the confiscation proceedings relate (again, see clause 146). General criminal conduct includes particular criminal conduct.

152.     The general criminal conduct regime is to be applied where the accused is identified by the court after conviction as having a criminal lifestyle. This is determined by reference to the nature of the offence or offences of which the accused has been convicted in the current proceedings, or certain previous proceedings. The offences in question are specified later in clause 145. If the court decides that the accused does not have a criminal lifestyle, confiscation is by reference to his benefit from his particular criminal conduct.

Clause 95: Time for making order

153.     Clause 95 makes it clear that where the court decides to make a confiscation order, it must do so before imposing a fine on the accused or any other order involving payment (other than a compensation order under section 249 of the Criminal Procedure (Scotland) Act 1995). This is, however, subject to the postponement provisions in clauses 102 and 103 which enable the court to postpone making a confiscation order, in which case the court may sentence the accused first.

Clause 96: Recoverable amount

154.     Clause 96 specifies how the amount recoverable under a confiscation order is to be calculated. The method of calculation is much the same as in the existing confiscation statutes. The recoverable amount is the amount of the accused's benefit from either his general criminal conduct or his particular criminal conduct (as the case may be), unless the amount available for confiscation is considered by the court and found to be less than the benefit in question, in which case the recoverable amount is that lesser amount. The amount available for confiscation is described as the available amount (equivalent to the term "the amount that might be realised" in the current legislation) and the amount which may be ordered to be confiscated as the recoverable amount (equivalent to "the amount to be recovered" in the current legislation).

Clause 97: Accused's benefit

155.     This clause stipulates what the court must take into account when deciding whether the accused has benefited from criminal conduct and what the value of that benefit is. Subsection (3) requires any amount ordered to be paid under a previous confiscation order (whether one made under the Bill or the previous confiscation statutes) to be deducted from the amount of the accused's assessed benefit from his general criminal conduct. This is to avoid confiscating the same benefit twice. The provision is not required for particular criminal conduct because the same offences cannot be subject to a second conviction and therefore there is no risk of confiscating the same benefit from particular criminal conduct twice.

Clause 98: Available amount

156.     Clause 98 explains how the available amount is to be calculated. It is calculated in the same way as "the amount that might be realised" in the current legislation. In broad terms, the available amount is the value of all the accused's property, minus certain prior obligations of the accused such as earlier fines, plus the value of all tainted gifts made by him. "Tainted gifts" are defined at clause 147.

Clause 99: Assumptions as to benefit from general criminal conduct

157.     Clause 99 applies where the court has decided that the accused has a criminal lifestyle and it is, accordingly, considering the accused's benefit from general criminal conduct. The clause enables the court to make certain specified assumptions to establish whether the accused has benefited from general criminal conduct, and, if so, by how much. The assumptions are discretionary. Also, the court is not permitted to make an assumption in relation to particular property or expenditure if it is shown to be incorrect. The current legislation provides for similar assumptions to be made. Where the court does not make one or more of the assumptions for any reason, it must nevertheless continue to decide whether the accused has benefited from general criminal conduct and decide the recoverable amount, albeit without the assistance of the assumptions.

Clause 100: Effect of order on court's other powers

158.     Clause 100 requires the court to have regard to the confiscation order before imposing a fine or other order for payment or forfeiture on the accused, except for a compensation order but otherwise to leave the confiscation order out of account in sentencing the accused.

Clause 101: Disposal of family home

159.     Clause 101 provides some protection in relation to the accused's interest in his family home. The clause applies where a confiscation order has been made and the prosecution has not satisfied the court that the person's interest in his family home has been acquired as a benefit of his criminal conduct. It replicates existing provisions in the Proceeds of Crime (Scotland Act 1995. An administrator who has been appointed to ingather the estate of the accused in terms of the confiscation order cannot dispose of the family home, as defined in subsection (5), without the relevant consent, again as defined in subsection (5). Where no consent is forthcoming, he must apply to the court for authority to do so. Once the court has taken into consideration all the circumstances of the case, it may refuse to agree to the disposal of the family home or postpone the application to dispose of the family home for up to 12 months.

Procedural matters

Clause 102: Postponement

160.     Clause 102 enables the court to postpone the confiscation proceedings on one or more occasions for up to a total of two years from the accused's conviction, or three months from the date on which any appeal against conviction is disposed of, if the three months ends more than two years after the date of conviction. There is no limit to the period of postponement, however, where there are exceptional circumstances or the accused has failed to comply with an order under clause 105, namely he has failed to respond to the prosecutor's statement within the time limit set down by the court. The provision extends the period of postponement permitted under the current legislation, which is normally only up to six months.

161.     The new provision in clause 102 enables proceedings to be postponed for any reason, for example, because a judge is ill. Under current legislation, a postponement can only be made so that the court can obtain further information about the accused's benefit or the realisable property.

Clause 103: Effect of postponement

162.     Clause 103 makes it clear that, as under current legislation, the court may sentence the accused at any time during the period of postponement. The purpose of the provision is to avoid the sentence being delayed while confiscation is considered. The court is not allowed to impose a fine or an order set out in clause 100(3) (such as a forfeiture order) when it sentences the accused in the postponement period because it needs to know the amount of the confiscation order before it does this.

Clause 104: Statement of information

163.     Clause 104 provides that the prosecutor must give the court a statement of information detailing the accused's benefit from criminal conduct within a period specified by the court. This will include information on whether or not the prosecutor considers that the accused has a criminal lifestyle.

Clause 105: Accused's response to statement of information

164.     The statement of information procedure is designed to provide a quick and effective method of identifying the extent of the accused's benefit where there is agreement between the accused and the prosecutor, and of identifying areas of dispute where there is not. When the prosecutor serves a statement of information on the accused, the court shall require the accused to respond separately to every allegation in the statement, and to indicate to what extent each allegation is accepted. If proceedings are postponed under clause 102, the accused's response to the statement must be lodged within such period the court orders which shall be a period no later than six months before the end of the permitted period mentioned in clause 102. Where an allegation is accepted by the accused, the court may treat the acceptance as conclusive as far as any matters to which it relates is concerned.

165.     Where an allegation is challenged, the accused must provide full details of any matters relied on. The purpose of the procedure is to identify areas of dispute for the confiscation hearing, where evidence may be brought in relation to the disputed points by the prosecutor or the accused. Under subsection (3), if the accused fails to respond to an allegation, the accused may be treated as having accepted it. However, the accused is not to be treated as accepting any allegation that he has a criminal lifestyle or has benefited from general or particular criminal conduct because it is not thought appropriate that the accused's silence should be conclusive of these matters.

166.     Subsection (8) provides that, where the accused accepts an allegation that he has benefited from conduct, the acceptance is not admissible in any proceedings for an offence. The exemption is intended to encourage accused persons to be more forthcoming by preventing the admissions made from being used in a future prosecution against them or anybody else. Accused persons might otherwise be reluctant to admit benefit from criminal conduct which has not been the subject of a prosecution.

Clause 106: Provision of information by accused

167.     Clause 106 empowers the court, at any stage in the confiscation procedures, to order the accused to provide any information it needs to enable it to carry out its confiscation functions. Where the accused fails to comply with the court's order without reasonable excuse, the court may draw any inference it thinks appropriate. The court might use the provision where, for example, the accused has proposed to rely on certain matters in responding to the statement of information, and the court considers that it requires more information from the accused in deciding the point at issue. The provision reproduces, with minimal changes, that in the current legislation.

Reconsideration

Clauses 107-109: Reconsideration

168.     Clauses 107 and 108 enable a confiscation order to be made where none was made in the original proceedings. Clause 109 enables the amount payable under a confiscation order, once made, to be increased. Application must be made to the court in which the original hearings took place within six years of the original conviction. Clause 107 applies where no confiscation hearing was held after the original conviction. Clause 108 applies where a hearing was held, the court decided that the accused had a criminal lifestyle but had not benefited from his general criminal conduct or that he did not have a criminal lifestyle and had not benefited from his particular criminal conduct. Clause 109 applies where a confiscation order has already been made. It may be used to increase the amount payable under a confiscation order on one or more occasions. The clauses reproduce, with some changes, provision in the current legislation. The principle underlying clauses 108 and 109 is that the prosecutor should only apply for a reconsideration where new evidence comes to light. It is not appropriate for the prosecutor to have evidence at the time of the original proceedings, not to apply for a confiscation order on that occasion but to apply for a reconsideration at a later date.

Clause 110: Order made: reconsideration of available amount

169.     Clause 110 applies where the court made a confiscation order for an amount lower than the accused's assessed benefit because there was insufficient realisable property to satisfy an order in the full amount. The prosecutor may apply to the court for the court to recalculate the available amount. Any number of applications may be made and there is no limitation to the time when an application may be made (in contrast to clauses 107 to 109). If the court calculates that the available amount has increased, it may vary the amount payable under the confiscation order but may not increase it beyond the defendant's assessed benefit. Subsection (4) is additional to the existing legislation. It requires the court to have regard to any fine or order as set out in clause 100(3) imposed on the accused following the original conviction (because these may affect the amount the accused is able to pay).

Clause 111: Inadequacy of available amount

170.     Clause 111 enables the prosecutor or the accused to apply to the court for a variation in or discharge of a confiscation order where the court is satisfied that the realisable property is inadequate to meet the order

Clause 112: Information

171.     Clause 112 contains provision ancillary to clauses 107 to 110. Its purpose is to make it clear that clauses 104 and 105 on statements of information and clause 106 on the provision of information by the accused apply to reconsideration proceedings as they apply to confiscation proceedings immediately following a conviction.

Accused absconds

Clauses 113-116: Accused absconds

172.     These clauses deal with confiscation orders against absconders. These are new provisions; there are no provisions relating to absconders in existing Scottish legislation. The Bill empowers the court to make a confiscation order against an absconder who has been convicted of an offence or against whom proceedings have been instituted.

173.     Clause 113 deals with the situation where an accused person has been convicted and then absconds. The prosecutor may ask the court for a confiscation order to be made against the accused. Subsection (3)(e) provides that none of the reconsideration clauses 107-109 apply where a person is still an absconder post conviction and thus that they do all apply where a convicted absconder returns.

174.      Clause 114 deals with absconders who abscond prior to conviction. A confiscation order may only be made against an absconder against whom proceedings have been instituted, and if two years have elapsed from the time the accused absconded. Subsections (3)(d) and (6)-(7) set out the position with regard to reconsiderations under Clause 107 -109. No reconsideration under those clauses is possible while the accused remains an absconder. However, when the absconder returns, clause 109 applies with the modifications in subsection (6).

175.     Clause 115 provides that where an unconvicted accused absconds and has a confiscation order made against him, but later ceases to be an absconder, he may apply to the court to have the order varied. Where such an absconder returns and is subsequently acquitted, clause 116 provides that he can apply to the court to have the confiscation order discharged and the court must do so.

Appeals

Clause 117: Appeal by prosecutor

176.     Clause 117 gives the prosecutor a clear power to appeal against any decision of the court not to make a confiscation order and also against any confiscation order where it considers that the amount required to be paid is unduly low.

Payment and enforcement

Clause 118: Time for payment

177.     Clause 118 indicates how long the court may allow the accused to pay the amount due under the confiscation order. It provides that a confiscation order is to be paid immediately, unless the accused can demonstrate to the court that he needs more time to pay. If the court is satisfied that it is required, the court may allow up to six months time to pay, and up to a further six months on a later occasion if there are exceptional reasons justifying the extension.

Clause 119: Interest on unpaid sums

178.     Clause 119 makes it clear that the accused must pay interest on a confiscation order which is not paid in full by the time allowed.

Clause 120: Application of provisions about fine enforcement

179.     Clause 120 provides that the sums ordered to be paid under a confiscation order shall be enforced in the same way as fines, that is under the procedure set out in the Criminal Procedure (Scotland) Act 1995. Enforcement will continue to be carried out by the sheriff clerk. Clause 120 also contains general provision on imprisonment in default of a confiscation order. The provision reflects that in existing legislation and provides, in particular, that a term of imprisonment in default of a confiscation order must be served consecutively to the substantive term imposed for the offence(s).

Restraint orders etc

Clause 121: Conditions for exercise of powers

180.     Clause 121 sets out when a restraint order, as provided for in the ensuing clauses, may be made by the Court of Session or sheriff court (civil). A restraint order has the effect of freezing property which may be liable to confiscation following the trial and the making of a confiscation order. At present, the earliest time when a restraint may be made by the court is within 28 days before proceedings are instituted, or an application in respect of further confiscation proceedings has been made or is to be made (for example, for a reconsideration of the accused's benefit).

181.     The Bill maintains the present position on restraint orders with one change. The point at which a restraint order may be made is brought forward to any time after a criminal investigation has been instituted, as defined in clause 159(1). The change is likely to be of particular assistance in cases where the investigative process involves questioning the suspect (as often occurs, for example, in fraud cases) and the suspect is, accordingly, alerted to the risk that the authorities may be thinking of applying for a restraint order.

Clause 122: Restraint orders etc.

182.     Clause 122 explains the nature and effect of a restraint order. It is an order interdicting a specific person from dealing with any realisable property held by him. Thus it may be made both against the accused or person under investigation, and any other person holding realisable property. Subsection (3) provides for exceptions to be made for reasonable living and legal expenses and for carrying on any trade, business, profession or occupation. Subsection (4) prevents funds under restraint from being released for legal expenses to defend the criminal charges in respect of which the restraint order is made or for legal expenses relating to those charges which are incurred by a recipient of a tainted gift. Legal aid will continue to be available in those circumstances.

Clause 123: Application, recall and variation

183.     An application for a restraint order may only be made by the prosecutor. Once obtained, the prosecutor must notify every person affected by it. The court has powers to recall or vary a restraint order.

Clause 124: Appeals

184.     Clause 124 provides the prosecutor with a right of appeal against a court's decision not to make a restraint order, and the prosecutor or any person having an interest in the order a right of appeal against the court's decision to vary or recall an order (or not to vary or recall it).

Clauses 125 & 126: Inhibition of property affected by order; arrestment of property affected by order

185.     These provisions replicate those in existing legislation and are designed to prevent the dissipation of the accused's heritable or moveable property.

Clause 127: Restraint orders: administrators and seizure

186.     Clause 127 follows the current legislation in enabling an administrator to be appointed by the court where a restraint order has been made. The role of an administrator is to manage property to maintain its value until a confiscation order is made.

Clause 128: Restraint orders: restriction on proceedings and remedies

187.     While a restraint order is in force, the court may sist any action, execution or legal process relating to property affected by the restraint order.

Realisation of property: general

Clause 129: Confiscation order made: administrators

188.     Where a confiscation order has been made, clause 129 empowers the court, on the application of the prosecutor, to appoint an administrator to assist the enforcement of the confiscation order. This person may be the same as the administrator appointed under clause 127 or not, as the case may be. Clause 129 also sets out the powers that the court can confer on an administrator so appointed (for example, the power to seize and sell property).

Clause 130: Power of entry and search

189.     Clause 130 confers certain powers on an administrator to assist him in carrying out his functions. These are in addition to those powers that are contained in Schedule 2.

Clause 131: Discharge

190.     Clause 131 makes provision for the discharge of an administrator appointed at the restraint stage in cases where a new administrator is appointed after a confiscation order has been made. It enables the transfer of property from the first administrator to the new administrator.

Clause 132: Application of sums by administrator

191.     Clause 132 specifies how any sums in the hands of an administrator are to be disposed of. Where a confiscation order is made, the sums are payable, subject to certain prior payments, to the clerk of court.

Clause 133: Sums received by clerk of court

192.     Clause 133 sets out how the clerk of court must dispose of any monies received in satisfaction of a confiscation order, whether from an administrator appointed under clause 129 or otherwise (for example, voluntary payments by an accused). An administrator's remuneration and expenses will normally be paid out of the sums raised by the confiscation order.

Exercise of powers

Clause 134: Powers of court and administrator

193.     Clause 134 is an overarching clause that lays down general principles relating to the exercise of their enforcement powers by the court and administrators. It largely re-enacts the current legislation in that it emphasises, for example, that the satisfaction of a confiscation order takes precedence over any other obligations of the accused or the recipient of a tainted gift from the accused.

194.     Subsections (2)(b), (3)(c), (4) and (5) are new. Where a confiscation order has not yet been made, they require the powers to be exercised with a view to maintaining the value of the amount available for confiscation. This will enable administrators to dispose of depreciating assets. Subsection (4), however, enables the accused to challenge the administrator's decision to dispose of a particular asset on the grounds that the asset in question is irreplaceable. The purpose of the new provision is to enable administrators for example to sell depreciating assets such as cars. The provision on irreplaceable assets has regard to the fact that the accused has not been convicted at this stage and should not, therefore, be obliged to lose irreplaceable assets. It does not apply to administrators at the enforcement stage, since any realisable property can then be used to satisfy a confiscation order. Subsection (5) makes provision to revoke or vary an order under subsection (4).