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Standing Committee Debates
Proceeds of Crime Bill

Proceeds of Crime Bill

Column Number: 835

Standing Committee B

Thursday 10 January 2002


[Mr. Bill O'Brien in the Chair]

Proceeds of Crime Bill

8.55 am

The Chairman: Good morning, everyone. The next clause is clause 292. If no hon. Member wishes to speak on it, I shall put the Question.

Clause 292 ordered to stand part of the Bill.

Clause 293

Seizure of cash

The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): I beg to move amendment No. 325, in page 170, line 14, at end insert—

    '(1A) A customs officer or constable may also seize cash part of which he has reasonable grounds for suspecting to be—

    (a) recoverable property, or

    (b) intended by any person for use in unlawful conduct,

    if it is not reasonably practicable to seize only that part.'.

The Chairman: With this it will be convenient to take Government amendments Nos. 444 to 447.

Mr. Ainsworth: Amendment No. 325 permits the seizure of cash of which only part is suspected of being related to crime, if it is not reasonably practicable to seize only the suspect part of the cash. When notes and coins are involved, there will usually be no difficulty in separating the suspect part from the non-suspect part and seizing only the part of the cash that is under suspicion.

However, when the cash takes the form of a monetary instrument, such as a cheque or a banker's draft, separation may not always be practicable at the point of seizure. We therefore propose that the whole instrument should be capable of seizure, provided that the non-suspect part is returned as soon as the money has been paid into an account. An example of that would be a single cheque to the value of £50,000 when, say, it is suspected that half represents the proceeds of unlawful conduct and the other half is not under suspicion.

In such a situation, the cheque would be seized and converted quickly into a divisible form, and the part of the money not under suspicion would be released. The provision is required to ensure that mixing suspect cash with clean money cannot circumvent the seizure of tainted cash. The amendment follows the approach taken under schedule 1 of the Anti-terrorism, Crime and Security Act 2001 in relation to the seizure of suspected terrorist cash.

Amendments Nos. 444 to 447 are required to ensure that proper provision is made at all stages of the process for cases when only part of the money is liable to forfeiture.

Mr. Dominic Grieve (Beaconsfield): The amendment is not one to which I, nor, I suspect, any member of the

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Committee, can have great objection. If a sum of money cannot be split conveniently, it is desirable that the whole of it should be seized, otherwise there would be a risk that substantial amounts of money that were thought to be the proceeds of crime, or associated with criminal conduct, could not be touched.

Will the Under-Secretary amplify his explanation a little and tell us about the mechanisms that would exist to ensure that the splitting of the money can take place as quickly as possible? I ask him to do that because we shall soon be discussing the detention of seized cash. As matters stand, it is possible for seized cash to be detained for a substantial time. What procedures does the hon. Gentleman envisage being operated to ensure, for example, that if there is a substantial cheque, the part of its value that represents money that is not considered to be recoverable property can be returned to the person who is entitled to it, without waiting for the completion of the whole process?

Mr. Ainsworth: I am not sure that the matter is so complicated. There is a requirement in the Bill that all money is to be paid into interest-bearing accounts within 48 hours. Obviously we are talking about a cheque or a banker's draft that represents mixed property, and which should be paid into an account for the purpose of being split. The part identified as not being either the proceeds of crime or intended for criminal purposes, should be returned immediately to the person from whom it has been seized. There does not need to be a lengthy or complicated procedure, which might cause difficulty.

Mr. Grieve: The Minister may be right. With regard to cash, there is no difficulty. I raised the matter because I wanted to ascertain whether any of the instruments on the list—unfortunately I do not have it in front of me—might be of a type that were not immediately payable into a bank account. Clearly, if the instruments are payable into a bank account they can be split up and sorted out. That is my only caveat.

Mr. Ainsworth: The instruments that we are discussing are immediately payable into bank accounts. There are, of course, clearance procedures and deadlines applied by banks. It will not be possible to pay back a proportion of the money until the cheque—if it is a cheque—has been cleared by the banking system and found to be valid. There is likely to be some delay, due to the clearance procedures of the financial institutions, but none other than that.

Mr. David Wilshire (Spelthorne): My hon. Friend said that the money would be paid back immediately. Where in the Bill is the word ''immediately''? Where does it say that there is a time limit within which the money must be paid back?

Mr. Ainsworth: The Bill does not say ''immediately''. The money is not forfeit. If it is kept, it will be subject to compensatory interest. Thus there is no incentive for anyone to detain for any length of time cash that is not suspect and is not forfeit. It imposes a liability on those who detain it. In exceptional circumstances, compensation may be payable above an interest rate. It would be in everyone's interests to return the non-tainted part of the money to its rightful owner as soon as is practical.

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Mr. Wilshire: I am not satisfied. The hon. Gentleman responds to my question about the word ''immediate'' by saying that compensation may be payable. That is a potentially serious issue. Let us suppose that there are reasonable grounds for suspicion—and it must be remembered that that is reasonable suspicion that has not been proven—that some of the seized money is connected with crime. A person who has been charged with a crime of that type may later be cleared, but some of the money seized that was not connected with the crime may have been held for some time. The Minister gives assurances that interest is payable, and that action will be taken as soon as is practical. However, although interest may be payable, the money that earns the interest has been seized. No one is penalised by the fact that in the end that person will receive the interest from the money that has been seized and invested. Handing back the money plus the interest does not achieve anything.

It has been suggested that compensation may be payable. That idea, presumably, would give rise to a claim. In turn, that might result in a court case, which would drag out the matter even further. Irrespective of what we might think about being hard or soft on criminals or suspected criminals, we must keep our eyes on natural justice. If there were no suspicion that the money was connected with criminal activity and if it were accepted that there was no claim on it, it would be unsatisfactory to leave the matter to people's best endeavours; to deal with it ''as soon as is practical'' is inadequate.

I support what the Minister wants to achieve. I see the loophole and know that it needs to be closed. However, it should be stated under the Bill that such money will be dealt with within X hours, and that if it is not, there will be specific penalties—not just interest—for seizing money that no one has any reasonable grounds for believing should have been seized.

Mr. Ainsworth: I apologise if I have not been clear. It is early in the morning. There is a requirement that the money be released. It is a requirement under the Bill that all the money seized, whether part tainted or otherwise, be paid into an interest-bearing account within 48 hours. We see no reason why that should not be done within 48 hours.

I draw the hon. Gentleman's attention to amendment No. 446, on which I did not expand in moving the lead amendment. Amendment No. 446 states:

    ''In the case of cash detained under section 294 which was seized under section 293(1A), the customs officer or constable must, on paying it into the account, release the part of the cash to which the suspicion does not relate''.

Under the Bill, it is a requirement to pay money seized into an interest-bearing account within 48 hours. Under the amendment, it would be a requirement to pay out the part that is not tainted immediately on paying the money into the account. The only justified delay that I can foresee might occur if moneys were paid into the account in the form of a cheque and the cheque could not be immediately cleared. Financial institutions place restrictions on the time within which they are prepared to clear cheques. However, as soon

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as the cheque has been cleared, recognised as bona fide money and accepted by the financial institution involved, the money should be returned to its rightful owner.

Mr. Wilshire: I thank the Minister for drawing my attention to amendment No. 446. However, it merely says that the money must be released, not that it must be released immediately. That could be interpreted as meaning that it will be released when the person involved gets round to it.

Mr. Ainsworth: The amendment provides that the person involved must,

    ''on paying it into the account, release the part of the cash to which the suspicion does not relate''.

Mr. Wilshire: In that case, why wait until the cheque has cleared? No power is provided to meet that assurance and say that the cheque must clear first. It must be one or the other. If the Minister is suggesting that the moment the money is paid in it must be given back, how will he meet the requirement that it must be cleared first?


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