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Delegated Legislation Committee Debates

Draft Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2002

Fifth Standing Committee
on Delegated Legislation

Tuesday 10 December 2002

[Mr. David Amess in the Chair]

Draft Proceeds of Crime Act 2002
(Cash Searches: Code of Practice)
Order 2002

4.30 pm

The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): I beg to move,

    That the Committee has considered the draft Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2002.

The Joint Committee on Statutory Instruments approved the draft order on Tuesday 3 December. The Proceeds of Crime Act 2002 contains a comprehensive package of measures that focuses on the recovery of criminal proceeds and wealth and includes a scheme for the recovery of cash in summary proceedings under chapter 3, part 5 of the Act. The draft order brings into operation a code of practice that is connected with that scheme.

Provisions relating to the recovery of cash are not new. The Criminal Justice (International Co-operation) Act 1990 introduced a power for police and Customs officers to seize cash discovered on import or export that is reasonably suspected of being derived from, or intended for use in, drug trafficking. An application can then be made to a magistrates court for the forfeiture of the cash. No conviction was required for forfeiture of the cash to be ordered; cash forfeiture proceedings are civil proceedings and the civil standard of proof applies. The provisions were later consolidated into the Drug Trafficking Act 1994, which applied throughout the UK.

The Proceeds of Crime Act 2002 replaces and extends the scheme to cash related to all unlawful conduct, and provides for the seizure of such cash inland. Like the previous legislation, the Act provides for a minimum amount of cash, in respect of which the search and seizure powers may be exercised. The Proceeds of Crime Act 2002 (Recovery of Cash in Summary Proceedings: Minimum Amount) Order 2002 sets the minimum amount at £10,000.

Police and Customs officers have no existing specific power to search for cash. Under previous legislation, Customs officers could rely on their general powers of search, which they can exercise at the borders under the Customs and Excise Management Act 1979. The Police and Criminal Evidence Act 1984 allows the police to search for evidence. A specific search power is necessary to support the ability to find and seize cash inland with a view to forfeiture rather than seizure for evidential purposes. In recognition of the sensitivity of search powers, the new search power is subject to several safeguards, including a statutory code of practice. The code is required before the search powers can come into operation.

Under section 292 of the Proceeds of Crime Act 2002, a draft of the code was published for public

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consultation on 23 August. The consultation period ended on 15 November. The draft code is available on the Home Office website, and was sent to the police, Customs and Excise, judicial bodies and civil liberties groups. We revised it in the light of the comments that we received.

The amended draft code closely follows the precedents of the Police and Criminal Evidence Act 1984, in particular, code A, which relates to stop and search, and code B, which relates to the searching of premises and the seizure of property. Those are tried and tested schemes for the general best practice for officers.

The Police and Criminal Evidence Act 1984 is a criminal statute, and the recovery of cash is a civil procedure. However, the relevant PACE codes are largely about the practice and procedure of searches, rather than whether the search is for criminal proceedings.

Mr. Peter Kilfoyle (Liverpool, Walton): I have been musing on my hon. Friend's statement that a new power for police and Customs was needed and was given under the Act. If I understood correctly, that was an extension of search powers. I am mindful of a case from a few years ago, with which I do not expect the Minister to be au fait. It involved Philip Glennon, the de facto son-in-law of a well known drug dealer currently in prison in Holland. He was found with £1 million buried in his garden. At that time, there was no prohibition on police searching the premises. I do not know what the reasons were. I note a reference in the guidance—

The Chairman: Order. I remind the hon. Gentleman that he must ask a direct question when he intervenes. If he wants to make a speech, perhaps he will catch my eye later.

Mr. Kilfoyle: Is not the real concern whether people can detain such cash, as opposed to searching for and finding it?

Mr. Ainsworth: While researching the need for the measure and during all the work that took place before the Proceeds of Crime Bill went through the House of Commons, we were told most consistently by Customs officers but also by police officers that in the course of their other work, they often come across large amounts of cash that cannot be explained and for which no one ever offers an explanation. In some instances, the money is obviously intended for use in crime or is the proceeds of crime, but the officers have no power to take the cash under their control and it disappears before any evidence can be brought of a substantial offence. That is the reason for the second part of part 5 of the Proceeds of Crime Act 2002—to allow for such cash to be forfeit.

In the overwhelming majority of cases in which it is known that people will be seeking out and searching for cash, we expect them to secure prior judicial approval. That is covered in the code of practice. Where they cannot do that, they should seek authority from a senior officer, of inspector rank or above. The seizure of the cash should be taken before a magistrates court within two days to secure its permanent forfeiture. Those are precisely the type of

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powers that we try to define clearly in the code of practice to ensure that they are only used appropriately and not in circumstances in which they should not be or the correct procedure is not followed.

Yes, in the circumstances that my hon. Friend described, in which a police officer is lawfully on someone's premises and discovers £1 million buried in the garden, that money could be forfeit. However, the officer would have to have just reason to suspect that it was the proceeds of crime or intended for use in crime.

The draft code draws attention to the officer's obligations under the Human Rights Act 1998 and the Race Relations Act 1976. I am satisfied that the order and the code are compatible with both those Acts. The section entitled ''Scope of the search powers'' provides guidance on reasonable grounds for suspicion. Objective tests are required to form the suspicion that is necessary to exercise the search power.

The section entitled ''Authority to search for cash'' provides guidance on the procedure required when an officer seeks prior judicial approval for a search. Under the Magistrate's Courts (Detention and Forfeiture of Cash) Rules 2002, which were made by my noble and learned Friend the Lord Chancellor, a justice of the peace can hold an application hearing in private away from the court. That will allow for flexibility in arranging applications quickly and will encourage officers to use that route rather than their own administrative powers of search.

The section ''Reports to the 'appointed person' '' gives guidance on the requirements in section 290 of the Act to report to an appointed person and sets out the related procedures. A report will be required to be sent to the appointed person where searches were not approved by a justice of the peace and cash was either not seized or not detained for more than 48 hours. The appointed person is an independent person overseeing the operation of the new search power.

The remaining sections of the code, which deal with the steps prior to a search, the search itself and the search record of both persons and premises, are very similar to the PACE codes. They ensure that people concerned are made aware of an officer's purpose and powers, that they are dealt with fairly and openly, and that an officer's exercise of those powers is proportionate. Examples of the safeguards within the code are in paragraph 42, which allows a person to call their own witness to a search and paragraph 48, which requires that all searches shall be fully recorded and kept on a register for inspection.

4.41 pm

Mr. Dominic Grieve (Beaconsfield): Welcome to the Chair, Mr. Amess. I assure the Committee that I do not intend to take up much of its time. The draft order is very much in line with what was expected, in view of the number of hours that both the Minister and I spent dealing with the Proceeds of Crime Bill. The order appears to be in complete conformity with the provisions of the Act.

I hope that the Minister can clarify a couple of points. He makes the point—it is quite specifically spelled out—that the powers conferred are civil in

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nature and exercisable only so far as is reasonably required for the purposes of finding cash. The powers do not include the power to enter premises. The explanatory memorandum states that it may be usual that police officers are on the premises for some other reason. The two reasons must be either that they have a search warrant to search the premises or that they have been invited there.

I am concerned about what happens when a police officer has been invited on to the premises. Unless I am greatly mistaken, his right to be present can be terminated at any time by the householder. A police officer who is invited on to the premises might say that he wants to search for cash and is authorised to do so because something gives him grounds to think that he should. He proceeds with the search and even as he opens the cupboard, searches through the underwear, finds the £75,000 in used £50 notes and is about to put his hand on it, the householder can still say, ''Stop. Get out of my house.''

How would the rules apply in such circumstances? Presumably if the officer had not yet found the cash, he would simply have to leave the premises. What would happen if he had found the cash but had not laid his hands on it? I suspect that he would still have to leave without taking the cash with him. If he had the cash in his hands, would the powers conferred under the order entitle to him to say, ''Yes, I am leaving, but I am taking your £75,000 with me, pursuant to the code.'' Or would he have to leave it behind?

I accept that those are esoteric points, but they are based on experience. In the days when I was involved in breathalyser cases, the police did not have a right of entry into premises in order to ask somebody to take the breath test, so if suspects escaped through the front door, they were safe. There were numerous serious disputes about the point at which a police officer—who had knocked on the door and been allowed in because the 17-year-old son of the household was spaced out with drink on the sofa—was told to leave. I can envisage such cases giving rise to problems.

There is another possibility in the same vein. Individuals who keep a large quantity of cash in their house might keep it in their underwear or under the floorboards—but they might keep it in a safe. If the money is in a safe and the police find a safe, what happens then?


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Prepared 10 December 2002