|Serious Crime Bill [HL] - continued||House of Commons|
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Assets Recovery Agency
Clause 68: Abolition of Assets Recovery Agency and redistribution of functions etc.
222. On such day as an order under clause 68(1) provides, the Assets Recovery Agency (which is established by section 1 of, and Schedule 1 to, the Proceeds of Crime Act 2002 ('POCA')), and the corporation sole that is its Director, will cease to exist. Such an order is to be made by statutory instrument but is not subject to any
parliamentary procedure (see clause 79). Clause 68(2) introduces Schedule 8 and clause 68(3) introduces Schedule 9.
223. Schedule 8 amends POCA and other relevant legislation to repeal or transfer functions currently conferred on the Assets Recovery Agency ('ARA') and its Director.
224. Under Part 1 of the Schedule, the role of the Director of ARA under Parts 2 and 4 of POCA in respect of confiscation and restraint orders in England and Wales and Northern Ireland, respectively, is repealed. A confiscation order is an order served by the court following conviction for a defendant to pay proceeds of his crimes. References to receivers of the Director under Parts 2 (for example sections 52 and 53) and 4 of POCA are also repealed. Part 1 of the Schedule also makes consequential amendments to Part 9 of POCA (which concerns the relationship between confiscation and insolvency).
225. Under Part 2 of Schedule 8, the powers of the Director of ARA under Chapter 2 of Part 5 of POCA to bring civil recovery proceedings in the High Court in England and Wales and Northern Ireland are transferred to SOCA. These powers are also transferred, as respects England and Wales, to the Director of Public Prosecutions, the Director of Revenue and Customs Prosecutions and the Director of the Serious Fraud Office and, as respects Northern Ireland, to the Director of Public Prosecutions for Northern Ireland and the Director of the Serious Fraud Office (see the amendment made by paragraph 89 of Schedule 8).
226. Under Part 3 of Schedule 8, the powers under Part 6 of POCA are transferred to SOCA. Part 6 enables the Director of ARA to serve on HM Revenue & Customs a notice that she intends to carry out certain Revenue functions. Paragraph 100 of Schedule 8 creates a power for the Secretary of State to repeal by order Part 6 of POCA (as amended by Schedule 8). Such an order is subject to the affirmative resolution procedure (see clause 79(3)).
227. Under Part 4 of Schedule 8, powers under Part 8 of POCA are transferred from ARA to SOCA. Part 8 enables the Director of ARA to apply for various orders to investigate confiscation cases and civil recovery cases.
228. Under Part 5 of Schedule 8, the role of the ARA to train, accredit and monitor performance of financial investigators under section 3 of POCA is transferred to the National Policing Improvement Agency. This Agency was established under Part 1 of the Police and Justice Act 2006 with the function of training and developing police officers.
229. Part 6 of Schedule 8 makes other amendments to POCA. Under a new section (section 2A), which paragraph 119 of Schedule 8 inserts in POCA, SOCA and the Directors referred to in paragraph 225 above are required to exercise their functions under POCA in the way best calculated to contribute to the reduction of crime. In doing so they must have regard to guidance issued under section 2A; that guidance must in particular indicate that such reduction is in general best secured by means of criminal investigations and proceedings. Paragraph 126 of Schedule 8 repeals the provisions in sections 435-438 of POCA on the use and disclosure of information by or to the Director of ARA. Broadly equivalent provisions are included in respect of SOCA and the Revenue and Customs Prosecutions Office in the provisions referred to in paragraph 230 below.
230. Part 7 of Schedule 8 makes amendments to other legislation. These include amendments to section 33 of the Serious Organised Crime and Police Act 2005 (disclosure of information by SOCA) by paragraph 157 of Schedule 8 to extend the circumstances when disclosure may be made to reflect types of disclosure which are authorised by section 438 of POCA but would otherwise not be authorised by section 33. Similar amendments are made to section 40 of the Commissioners for Revenue and Customs Act 2005 by paragraph 153 of Schedule 8 in relation to the disclosure of information by the Revenue and Customs Prosecutions Office.
231. Schedule 9 enables the Secretary of State to make a scheme to provide for the transfer of the Director and staff of the ARA together with its property, rights, liabilities and other matters to SOCA or the National Policing Improvement Agency ('NPIA') established by section 1 of the Police and Justice Act 2006.
232. This clause enables the production order provisions under Part 8 of POCA to be used for investigating the provenance or intended destination of cash seized under Chapter 3 of Part 5 of POCA (which provides for the recovery of cash in summary proceedings). The amendments made by this clause create a new type of investigation, namely a detained cash investigation. This is additional to the existing investigation powers, namely a confiscation investigation, civil recovery investigation and money laundering investigation. These new investigation powers will assist in the preparation of a case for forfeiting the cash before the magistrates' court in England and Wales and Northern Ireland or the Sheriff in Scotland.
233. Similar to clause 69, clause 70 allows for the search and seizure provisions under Part 8 of POCA to be used for investigating the provenance or intended destination of cash seized under Chapter 3 of Part 5 of POCA ('a detained cash investigation'). The existing safeguards for warrants will apply equally to those sought for a detained cash investigation.
234. This clause gives effect to Schedule 10 which makes further provision about the use of production orders and search and seizure warrants for detained cash investigations.
235. Schedule 10, in particular, makes amendments to POCA to add the new power of a detained cash investigation to relevant provisions and safeguards within Part 8 of that Act.
236. An accredited financial investigator is an investigator who has been trained and accredited under section 3 of the POCA to undertake certain investigation, restraint and search and seizure functions under the Act. The persons trained can be investigators who are not constables or officers of HMRC in respect of cash forfeiture powers under Chapter 3 of Part 5 of POCA, investigation powers under Part 8 and other search and seizure powers. Constables and officers of HMRC have access to these powers without the need for accreditation.
237. Clause 72 amends section 45 of POCA (and section 194 which is the equivalent provision in Northern Ireland) to enable accredited financial investigators to exercise the powers conferred by those sections. Sections 45 and 194 currently allow a constable or officer of HMRC to seize any property subject to a restraint order to prevent its removal from England and Wales or Northern Ireland, respectively. Such an order is designed to freeze property to prevent its dissipation in advance of the making of a confiscation order. The amendments made by this clause enable financial investigators to have this power of seizure if they fall within a description of investigator specified for this purpose by an order made by the Secretary of State under section 453 of POCA. Such an order is likely to relate to the training that the investigator has had to exercise powers of seizure.
238. Clause 73 gives effect to Schedule 11 which makes provision for accredited financial investigators to seize and seek the forfeiture of cash under Chapter 3 of Part 5 of POCA. That Chapter already allows a constable or officer of HMRC to seize, detain and apply for the forfeiture of cash that is suspected of being the proceeds of unlawful conduct or intended for use in such conduct. These are civil proceedings against the cash; there is no prosecution or sanction against an individual. Schedule 11 extends these powers to those accredited financial investigators who have been accredited under the Act to perform these functions. The accredited financial investigator will be able to search for cash on a person or premises and seize such cash if he suspects that it is the proceeds of unlawful conduct or intended for use in such conduct. The accredited financial investigator will also be able to apply for the detention of the cash and apply for its forfeiture before the magistrates' court. The safeguards which apply to constables and officers of HMRC will similarly apply to accredited financial investigators, namely safeguards attached to the search power regarding approval and reporting to an independent person. The code of practice under section 292 will be amended to apply to accredited financial investigators to provide guidelines on the operation of their search powers. Paragraph 12 of Schedule 11 inserts section 303A which provides that a reference to an accredited financial investigator under these provisions is a reference to one who falls within a description specified in an order made by the Secretary of State under section 453 of POCA.
239. Accredited financial investigators can currently apply for a search and seizure warrant under section 352 of POCA, but such warrants have to be executed by a constable or officer of HMRC. Clause 74 amends sections 352 and 353 to allow an accredited financial investigator who falls within a description specified by order made by the Secretary of State to execute a warrant.
240. Section 453 of POCA enables the Secretary of State to specify by order a description of the type of accredited financial investigators who may exercise restraint powers under Part 2 or investigation powers under Part 8. Clause 75(1) amends section 453 to provide that the Secretary of State can by order require relevant accredited financial investigators to have been satisfactorily trained to perform the relevant functions.
241. As accredited financial investigators will be undertaking invasive powers, offences of assaulting, resisting or wilfully obstructing them in the course of their duties are created by the new section inserted by clause 75(2) into POCA. An accredited financial investigator will not have the power of arrest. A person found guilty of any of these offences will be liable to a term of imprisonment not exceeding 51 weeks or a fine or both. The maximum sentence in Northern Ireland is 6 months which is also the maximum in England and Wales pending commencement of section 281(5) of the Criminal Justice Act 2003.
242. This clause makes it explicit that a proper person (as defined in section 412 of the Proceeds of Crime Act 2002) can use reasonable force to execute a search warrant under section 387 of the Proceeds of Crime Act 2002. This is a search warrant used in investigations under Part 8 of POCA. There is no need for an equivalent provision in respect of search and seizure warrants issued in England, Wales and Northern Ireland as the power to use reasonable force is implicit.
Clause 77: Extension of powers of Revenue and Customs
243. This clause gives effect to Schedule 12 which will make the various criminal investigation powers apply consistently throughout officers of Her Majesty's Revenue and Customs.
244. Paragraph 1 of Schedule 12 amends section 93 of the Police Act 1997 (c.50) so that references to an officer of Her Majesty's Customs and Excise (HMCE) are changed to an officer of Her Majesty's Revenue and Customs (HMRC). Section 93 allows an 'authorising officer' to authorise action to interfere with property (for example, entering a property to place a listening device) or take action in respect of wireless telegraphy where he believes it to be necessary to tackle serious crime and to be proportionate to the intended results. The effect of the changes made by paragraph 1 is to allow action to be authorised under section 93 when it relates to an ex-Revenue matter, at the moment the section only applies to ex-HMCE matters. There is no change to the tests that have to be passed before the authority can be given or to the role of the independent Office of Surveillance Commissioners who oversee the use of these powers and must approve certain authorisations.
245. Section 93(4) of the Police Act 1997 defines what is meant by 'serious crime'. The subsection also restricts the authorisations which can be made by an officer of Revenue and Customs to those relating to 'an assigned matter within the meaning of section 1(1) of the Customs and Excise Management Act 1979'. The reference to 'an assigned matter' is not amended by this Schedule as, following the amendments made to the definition by the Commissioners for Revenue and Customs Act 2005, it applies to all HMRC's responsibilities, not just ex-HMCE ones.
246. Paragraph 2 of this Schedule makes a consequential amendment to section 94 of the Police Act 1997 which concerns authorisations in the absence of an authorising officer.
247. Paragraph 3 of this Schedule makes a consequential amendment to section 107 of the Police Act 1997 concerning matters that the Prime Minister may, after consultation with the Chief Commissioner and Scottish Ministers, exclude from the copy of the Chief Surveillance Commissioner's annual report laid before each House of Parliament. The amendment provides that matters prejudicial to the discharge of the duties of the Commissioners for HMRC may be so excluded (section 107 currently refers to Commissioners of HMCE).
248. Paragraph 4 of this Schedule amends section 108 of the Police Act 1997 which concerns interpretation to remove the definition of 'customs officer' which is no longer necessary. The new phrase 'officer of Revenue and Customs' is defined by section 5 and Schedule 1 to the Interpretation Act 1978 and does not need a separate definition in the Police Act 1997.
249. Paragraph 5 of this Schedule provides for the Regulation of Investigatory Powers Act 2000 (RIPA) to be amended. Any reference in this part of the notes to a numbered section is to that section of RIPA.
250. Paragraph 6 of this Schedule amends the list of persons who can apply for an interception warrant in section 6(2) of RIPA to substitute a reference to the Commissioners for HMRC for a reference to the Commissioners of Customs and Excise. An interception warrant can authorise certain conduct, including the interception of communications in the course of their transmission by means of a postal service or telecommunications system (section 5(1)). A warrant may be issued by the Home Secretary, or the First Minister in Scotland, or Secretary of State for Northern Ireland where he believes that the conduct authorised by the warrant is proportionate to the results intended and is necessary:
251. The effect of the amendment made by paragraph 6 is to allow the Commissioners for HMRC to apply for an interception warrant in connection with any of HMRC's responsibilities. At the moment an application could only be made in respect of an ex-HMCE matter. There is no change to the conditions that have to be met before a warrant can be issued or the safeguards provided by RIPA in respect of the intercepted material.
252. Part I Chapter II of RIPA concerns the acquisition and disclosure of 'communications data' which is defined at section 21(4). The acquisition of this data is lawful where conducted by a person authorised or required to engage in that activity by an authorisation or notice granted or given under Chapter II of Part I and provided the conduct is in accordance with, or in pursuance of, the authorisation or requirement (section 21(2)). Where a 'designated person' believes it is necessary to obtain communications data and the relevant tests are passed he can:
253. The 'designated persons' are individuals holding certain positions with 'relevant public authorities'. The detail of who is a designated person, and the grounds on which they can obtain communications data, is set out in The Regulation of Investigatory Powers (Communications Data) Order 2003 (SI 2003/3172). The Commissioners of Customs and Excise and the Commissioners of Inland Revenue were both 'relevant public authorities'. For both ex-HMCE and ex-Revenue matters communications data can be obtained by HMRC where it is believed necessary for either tackling crime or preventing disorder, or assessing or collecting tax (section 22(2) and article 6 of SI 2003/3172). In addition communications data can only be sought where that is believed to be proportionate to the result sought (section 25(5)) and where the grounds are to assess or collect tax the only data that can be obtained is 'subscriber data' as defined at section 21(4)(c) (article 7 of SI 2003/3172).
254. The only difference at the moment between HMRC's powers under Part I Chapter II of RIPA for ex-HMCE and ex-Revenue matters concerns the data that can be obtained when action is believed necessary to tackle crime or prevent disorder. Where 'traffic data' (as defined at section 21(4)(a)) is sought on these grounds in relation to an ex-Revenue matter only data relating to a postal service can be obtained, data relating to a telecommunications system cannot be sought. For ex-HMCE matters data relating to either a postal service or a telecommunications system can be sought. This restriction for ex-revenue matters is imposed by article 10 of SI 2003/3172, there is no difference in the treatment of ex-HMCE and ex-Revenue matters in RIPA itself. Because of this the changes being made by the Schedule do not of themselves change HMRC's powers, they simply up-date references to the old departments. However, when SI 2003/3172 (The Regulation of Investigatory Powers (Communications Data) Order 2003) is amended the intention is to remove this restriction in article 10 relating to ex-Revenue matters. Once that is done HMRC will be able to obtain traffic data relating to both postal services and telecommunications systems where that is believed necessary, and proportionate, for tackling crime or preventing disorder.
255. Paragraph 7 of this Schedule makes a consequential amendment to section 21(5) of RIPA to substitute a reference to 'officers of Revenue and Customs' for a reference to 'customs officers' when referring to Part III of the Police Act 1997. This is to reflect the changes being made to the Police Act 1997, as detailed above.
256. Paragraph 8 of this Schedule amends section 25(1) of RIPA to substitute a reference to HMRC for references to HMCE and Inland Revenue in the definition of 'relevant public authority'.
257. Part II of RIPA deals with directed surveillance, intrusive surveillance and the conduct and use of covert human intelligence sources. These three types of activity are defined at section 26(2) to (11). The Schedule makes no change to the RIPA procedures for authorising directed surveillance and the use of covert human intelligence sources. The changes being made in respect of intrusive surveillance are detailed below.
258. Paragraph 9 of this Schedule makes a consequential amendment to section 27(4) to substitute a reference to 'officers of Revenue and Customs' for a reference to 'customs officers' when referring to Part III of the Police Act 1997. This is to reflect the changes being made to the Police Act 1997, as detailed above.
259. Section 32 of RIPA deals with the authorisation of intrusive surveillance (such as using listening devices in residential premises). Intrusive surveillance can be authorised where it is believed to be proportionate to the intended results and is necessary:
260. Usually authorisations for intrusive surveillance do not take effect until they have been approved by an independent Surveillance Commissioner (section 36). At the moment HMRC can use intrusive surveillance for ex-HMCE matters but not for ex-Revenue matters. The Schedule changes this, as detailed below, so that it can be used for ex-Revenue matters as well. The conditions that have to be met and authorisations granted are not altered.
261. Paragraph 10 of this Schedule amends the definition of 'senior authorising officer' at section 32(6). The reference to a customs officer is changed to an officer of Revenue and Customs designated for that purpose by the Commissioners for HMRC. The "senior authorising officer" is the officer who can authorise intrusive surveillance and this change will allow authorisations to be made in respect of all HMRC's responsibilities, including ex-Revenue ones (subject to paragraph 32(2) of the Schedule - see below), not just ex-HMCE matters.
262. Paragraph 11 of this Schedule makes consequential amendments to section 33 (police and customs authorisations) to change references to HMCE and its officers to HMRC and its officers. The rule which prevents an officer granting an authorisation except on an application by another officer of the department is retained in an up-dated form.
263. Paragraphs 12 to 18 make consequential amendments to change references to HMCE and its officers to HMRC and its officers in the remainder of Part II of RIPA.
264. Part III has yet to come into force as a day has not yet been appointed under section 83(2). Once it is in force section 49 of RIPA provides a power to enable persons with the 'appropriate permission' to serve notices on individuals or bodies requiring the disclosure of protected (for example encrypted) information which they lawfully hold, or are likely to, in an intelligible form. The power under section 49 can be used where the conditions set out at subsection (2) are met. The Schedule makes various amendments to Part III so it will apply consistently to HMRC when it does come into force in the way it would apply now to HMCE.
265. Section 49 of RIPA limits the information to which the power to serve notices applies by defining the various means by which the protected information in question has been, or is likely to be, obtained at subsection (1)(a) to (e). HMRC could already issue notices in respect of the information specified in subsections (1) (a) to (d) whether they related to ex-HMCE or ex-Revenue matters. However, HMRC could issue a notice in respect of information it holds which falls within section 49(1)(e) only where it relates to an ex-HMCE matter and not where it relates to an ex-Revenue matter. Subsection (1)(e) covers information that has come into (or is likely to come into) the possession of the customs and excise by any lawful means not involving the exercise of statutory powers and not covered by subsections (1)(a) to (d).
266. Paragraph 19 of this Schedule amends section 49(1)(e) of RIPA so it applies to information which has come into the possession of HMRC, rather than HMCE. This
will allow HMRC to issue a notice under section 49 in respect of this information whether it relates to an ex-Revenue or an ex-HMCE matter.
267. Paragraph 20 of this Schedule makes consequential amendments to section 51 of RIPA to substitute references to HMRC for references to HMCE. This section sets out the extra tests to be fulfilled if a key (such as a password or decryption key - see definition at section 56(1)) is required to be disclosed rather than the disclosure of protected information in an intelligible form.
268. Paragraph 21 of this Schedule amends section 54 of RIPA to substitute a reference to HMRC for a reference to HMCE. This section allows a section 49 notice to contain a provision requiring the recipient, or anybody else who becomes aware of it, to keep it secret. This can be done only where the protected information it relates to has been obtained by means which it is reasonable to keep secret from a particular person to maintain the effectiveness of any investigation or investigatory technique, or in the interests of any person's safety or well-being. At the moment HMRC can only impose a requirement under section 54 in connection with ex-HMCE matters. Changing the reference to HMCE to HMRC will allow a requirement to be imposed whenever the conditions are met, whether an ex-HMCE or ex-Revenue matter is involved.
269. Paragraph 22 of this Schedule amends section 55 of RIPA to substitute reference to HMRC for reference to HMCE. This section places a duty on various people to safeguard the use of disclosed keys and describes the safeguards that must be in place. The change made by paragraph 23 ensures that these safeguards apply to all keys HMRC may obtain, not just to keys relating to ex-HMCE matters.
270. Paragraph 23 of this Schedule makes a consequential amendment to section 56 by removing the definition of 'the customs and excise'.
271. Paragraphs 24 and 25 of this Schedule make consequential amendments to sections 65 and 71 of RIPA (the Tribunal and Codes of Practice respectively) to substitute references to HMRC for references to HMCE.
272. Paragraphs 26 and 27 of this Schedule make consequential amendments to sections 76A and 81 of RIPA (Foreign Surveillance Operations and General Interpretation respectively) to up-date a reference to a 'customs officer' and remove the definition of that term which is no longer necessary.
273. Paragraph 28 of this Schedule makes a consequential amendment to Part I of Schedule 1 to substitute a reference to HMRC for references to HMCE and the Inland Revenue. Part 1 defines relevant authorities for the purposes of sections 28 and 29 - authorisation of directed surveillance and covert human intelligence sources.
274. Only a person with the 'appropriate permission' under Schedule 2 may issue a notice under section 49 (section 49(2)) requiring the disclosure of protected (for example encrypted) information. At the moment where an ex-Revenue matter is involved a judge's permission (sheriff in Scotland) under paragraph 1 of Schedule 2 is always required before an officer can have the appropriate permission. In certain circumstances an officer of HMRC can have the appropriate permission in respect of an ex-HMCE matter without obtaining a judge's permission. A judge's permission is not required in relation to ex-HMCE matters in two circumstances, as detailed below:
275. For an officer of HMRC to have the appropriate permission in respect of an ex-HMCE matter the Commissioners for HMRC, or an officer of or above such level as they may designate for the purpose, must give permission for the section 49 notice to be issued in relation to that protected information (paragraph 6(4) of Schedule 2). This is not a requirement in respect of ex-Revenue matters at the moment.
276. Paragraph 29 of this Schedule amends Schedule 2 to substitute references to HMRC for references to HMCE. The effect of this is to make Schedule 2 apply to HMRC as a whole in the same way it currently applies to ex-HMCE matters as explained above. The rules on who has the "appropriate permission" to issue a section 49 notice will apply in future to all information HMRC obtains in the way they currently apply to information relating to ex-HMCE matters.
277. Paragraph 30 amends Schedule 2 to the Commissioners for Revenue and Customs Act 2005 (CRCA) to provide that paragraphs 1 (in respect of the Wireless and Telegraphy Act 2006 (WTA)) and 11 (in respect of Regulation of Investigation Powers Act 2000) shall cease to have effect. Those paragraphs prevent HMRC using the following powers in respect of ex-Revenue matters:
278. The substantive changes being made to those powers are described above. Paragraph 30 removes the rule currently preventing the powers being used by HMRC for ex-Revenue matters.
279. Paragraph 31 of this Schedule confirms that sections 6 and 7 CRCA do not restrict the functions in connection with which officers can exercise a power amended by this Schedule. Normally sections 6 and 7 CRCA would prevent a power or duty conferred on an officer of HMCE being exercised in connection with an ex-Revenue matter and require a power conferred in connection with an ex-Revenue matter to be used only for an ex-Revenue matter.
280. Once the Schedule is in force intrusive surveillance could generally be used by HMRC, once the relevant conditions are met, irrespective of whether an ex-Revenue or ex-Customs matter is involved.
281. The Commissioners for Revenue and Customs Act 2005 (CRCA 2005) created the new department of HM Revenue and Customs (HMRC) and carried forward the statutory powers of the former Inland Revenue and HM Customs and Excise. But it ring-fenced them to constrain the use of the powers to their original purposes.
282. At the moment HMRC can use certain RIPA powers for both ex-HMCE and ex-Revenue matters while, as detailed above, other powers are only available for ex-HMCE matters. The powers provided by the WTA and Police Act 1997 are currently available only in relation to ex-HMCE matters.
283. Most of the powers covered by this measure are only for use when investigating suspected crime. Stringent conditions apply to their authorisation and use and they are also subject to external scrutiny, for example by the Office of Surveillance Commissioners and Interception Commissioner. The powers provide a framework of proportionate surveillance powers that are generally available to law enforcement agencies for their investigations. Having inconsistent powers for HMRC depending on whether the matter being considered used to be dealt with by HMCE or the Revenue can restrict HMRC's ability to investigate crime effectively and cause confusion and operational problems. It also means that crimes of a similar nature and seriousness are treated differently simply because of which predecessor department was responsible for them.
284. The change made by this Schedule will make the various powers apply consistently to HMRC. This will make the surveillance powers available whether an ex-HMCE or ex-Revenue matter is involved.
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