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Clause read a Second time, and added to the Bill.
‘(1) The Secretary of State may by order make provision about the practice and procedure for determining the amount of—
(a) any costs payable by virtue of section (Compliance with orders: authorised monitors)(4) and (5); and
(b) any interest payable in respect of those costs.
(2) Such provision may, in particular, include provision about appeals.
(3) Where any amounts required to be paid by virtue of section (Compliance with orders: authorised monitors)(4) and (5) have not been paid within a required period, the law enforcement agency concerned must take reasonable steps to recover them and any interest payable in respect of them.
(4) The Secretary of State must by order provide for what are reasonable steps for the purposes of subsection (3).
(5) Any amounts which have not been recovered despite the taking of the reasonable steps are recoverable as if due to the law enforcement agency concerned by virtue of a civil order or judgment.
(6) Where any amounts required to be paid by virtue of section (Compliance with orders: authorised monitors)(4) and (5) are, in the case of an order of the Crown Court, not paid within a required period, the unpaid balance from time to time carries interest at the rate for the time being specified in section 17 of the Judgments Act 1838 (c. 110) (interest on civil judgment debts).
(7) For the purposes of section 25, a failure to comply with a requirement imposed by virtue of section (Compliance with orders: authorised monitors)(4) and (5) to make payments occurs when the amounts become recoverable as mentioned in subsection (5) above (and not before).
(8) In this section “law enforcement agency” has the same meaning as in section (Compliance with orders: authorised monitors).’ .—[Mr. Coaker.]
Brought up, read the First and Second time, and added to the Bill.
‘(1) After section 245D of the Proceeds of Crime Act 2002 (c. 29) (property freezing orders) insert—
“245E Receivers in connection with property freezing orders
(1) Subsection (2) applies if—
(a) the High Court makes a property freezing order on an application by an enforcement authority, and
(b) the authority applies to the court to proceed under subsection (2) (whether as part of the application for the property freezing order or at any time afterwards).
(2) The High Court may by order appoint a receiver in respect of any property to which the property freezing order applies.
(3) An application for an order under this section may be made without notice if the circumstances are such that notice of the application would prejudice any right of the enforcement authority to obtain a recovery order in respect of any property.
(4) In its application for an order under this section, the enforcement authority must nominate a suitably qualified person for appointment as a receiver.
(5) Such a person may be a member of staff of the enforcement authority.
(6) The enforcement authority may apply a sum received by it under section 280(2) in making payment of the remuneration and expenses of a receiver appointed under this section.
(7) Subsection (6) does not apply in relation to the remuneration of the receiver if he is a member of the staff of the enforcement authority (but it does apply in relation to such remuneration if the receiver is a person providing services under arrangements made by the enforcement authority).
245F Powers of receivers appointed under section 245E
(1) If the High Court appoints a receiver under section 245E on an application by an enforcement authority, the court may act under this section on the application of the authority.
(2) The court may by order authorise or require the receiver—
(a) to exercise any of the powers mentioned in paragraph 5 of Schedule 6 (management powers) in relation to any property in respect of which the receiver is appointed,
(b) to take any other steps the court thinks appropriate in connection with the management of any such property (including securing the detention, custody or preservation of the property in order to manage it).
(3) The court may by order require any person in respect of whose property the receiver is appointed—
(a) to bring the property to a place (in England and Wales or, as the case may be, Northern Ireland) specified by the receiver or to place it in the custody of the receiver (if, in either case, he is able to do so),
(b) to do anything he is reasonably required to do by the receiver for the preservation of the property.
(4) The court may by order require any person in respect of whose property the receiver is appointed to bring any documents relating to the property which are in his possession or control to a place (in England and Wales or, as the case may be, Northern Ireland) specified by the receiver or to place them in the custody of the receiver.
(5) In subsection (4) “document” means anything in which information of any description is recorded.
(6) Any prohibition on dealing with property imposed by a property freezing order does not prevent a person from complying with any requirements imposed by virtue of this section.
(a) the receiver deals with any property which is not property in respect of which he is appointed under section 245E, and
(b) at the time he deals with the property he believes on reasonable grounds that he is entitled to do so by virtue of his appointment,
the receiver is not liable to any person in respect of any loss or damage resulting from his dealing with the property except so far as the loss or damage is caused by his negligence.
245G Supervision of section 245E receiver and variations
(1) Any of the following persons may at any time apply to the High Court for directions as to the exercise of the functions of a receiver appointed under section 245E—
(b) any party to the proceedings for the appointment of the receiver or the property freezing order concerned,
(c) any person affected by any action taken by the receiver,
(d) any person who may be affected by any action proposed to be taken by the receiver.
(2) Before giving any directions under subsection (1), the court must give an opportunity to be heard to—
(b) the parties to the proceedings for the appointment of the receiver and for the property freezing order concerned,
(c) any person who may be interested in the application under subsection (1).
(3) The court may at any time vary or set aside the appointment of a receiver under section 245E, any order under section 245F or any directions under this section.
(4) Before exercising any power under subsection (3), the court must give an opportunity to be heard to—
(b) the parties to the proceedings for the appointment of the receiver, for the order under section 245F or, as the case may be, for the directions under this section;
(c) the parties to the proceedings for the property freezing order concerned,
(d) any person who may be affected by the court’s decision.”
(2) In sections 273(4)(b) and 277(7)(b) of that Act (recovery orders and consent orders: recovery of costs of pension scheme trustees or managers) after “enforcement authority,” insert “receiver appointed under section 245E,”.
(3) In paragraph 1 of Schedule 10 to that Act (disapplication of special income tax and capital gains tax rules for receivers), after paragraph (c), insert—
“(ca) a receiver appointed under section 245E;”.’.— [Mr. Coaker.]
Brought up, and read the First time.
Mr. Coaker: I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker: With this it will be convenient to discuss the following: Government amendments Nos. 14, 18, 19, 23 to 41 and 48 to 53.
Mr. Coaker: I shall begin with new clause 3. Under the civil recovery provisions of the Proceeds of Crime Act 2002—POCA—it is not possible at an interim stage for there to be a receiver whose only function is to manage property while it is frozen. That is a problem because there are civil recovery cases in which a property freezing order, which only freezes property, is not enough, as the property cannot be managed.
On the other hand, obtaining an interim receiving order, which freezes assets and requires the appointment of an independent receiver, would be too much and is unnecessary in some cases. That is because the independent receiver, known as an interim receiver, has management, investigation and reporting functions. Due to the investigative function, it is only right that the interim receiver should be independent from either party to the civil recovery proceedings, so that accusations of any bias in the case can be avoided.
There is an identified operational need to create a new type of receiver whose only role is to manage property. Such a receiver would not have any investigatory or reporting functions; he or she could be a member of the staff of an enforcement authority, such as the Serious Organised Crime Agency. In the Government's view, the creation of a civil recovery management receiver will improve the efficiency and effectiveness of the civil recovery regime in the 2002 Act. It will result in significant savings as the primary expense in civil recovery cases is meeting the remuneration and expenses of an interim receiver. In particular, in-house management receivers would be much more cost-effective. The Assets Recovery Agency has a number of cases where the sums spent on the interim receivership already exceed the value of the assets it is pursuing. Such experience has inevitable consequences in terms of whether an enforcement authority would adopt a difficult case, which is likely to be protracted and therefore expensive, or opt for a lower value and less complex case. We want to minimise such a resource consideration in the decision-making exercise of an enforcement authority on whether it should adopt a case for civil recovery.
Other minor amendments are consequential on new clause 3. The other amendments in this group, which are also designed to support amendments that the Bill already makes to the Proceeds of Crime Act 2002, relate to the disclosure of information and the delegation of the functions of the directors of the main prosecution agencies.
Amendments Nos. 27 to 32, 35, 37 to 40, 49, 50 and 52 relate to the disclosure of information between the various agencies involved in the civil recovery of the proceeds of crime.
Stewart Hosie (Dundee, East) (SNP): Very little in the Bill relates directly to Scotland, but some of the amendments do. Although this is a slightly inelegant way of doing it, with gateway provisions for disclosure over two Acts, can the Minister confirm that the amendments change how SOCA’s POCA-related activities work to allow disclosure to the Lord Advocate and Scottish Ministers? In particular, have changes been made to ensure proper disclosure of criminal confiscation, civil recovery and taxation information? Finally, are the regulations concerning disclosure of information by the Lord Advocate and Scottish Ministers unchanged?
Mr. Coaker: That was an excellent question by the hon. Gentleman, but I shall have to give it some thought before I answer him. In all seriousness, I think that I had better take some advice before I tell him something that is inaccurate and misleading.
With the exception of its training and accreditation functions, the Assets Recovery Agency is to be merged into the Serious Organised Crime Agency under clause 72. The Assets Recovery Agency is currently the one body in England, Wales and Northern Ireland that undertakes civil recovery investigations and proceedings to recover the proceeds of crime. This civil recovery role will now transfer effectively to SOCA, the Crown Prosecution Service, the Revenue and Customs Prosecution Office, the Serious Fraud Office and the Public Prosecution Service for Northern Ireland. In order to support these and other functions carried out under the 2002 Act by the director of the Assets Recovery Agency, there is provision in part 10 of the Act for the disclosure of information to and by the director. The main group of amendments makes similar provision to part 10 to allow for the new bodies to be able to receive and disclose information to assist them in these, and other, functions. Amendments are either made to the parent legislation of the prosecution bodies where they already have what are known as information gateway provisions, or they create a new set of provisions for those organisations that do not have such legislative gateways. The flow of information is vital to ensure the success of the civil recovery regime in taking away the proceeds of crime. The usual safeguards and established practices and procedures are followed in the provisions to prevent any actual misuse of information or accusation of misuse.
Amendments Nos. 25, 26 and 36 provide for a more effective and broad ability for the directors of the main prosecution agencies to be able to delegate their functions. The Bill confers the functions of civil recovery investigations and proceedings on to the directors. The operational reality will be that the respective directors will either delegate to their staff or contract out these functions. The amendments ensure a suitable level of flexibility in that process.
Amendments Nos. 14, 24, 33, 34, 41, 48, 51 and 53 are minor consequential amendments reflecting the abolition of the Assets Recovery Agency. For example, the reference to that agency is to be omitted from schedule 1 to the Corporate Manslaughter and Corporate Homicide Act 2007.
Chris Ruane (Vale of Clwyd) (Lab): In my constituency, there is a premises on West parade, on the front of Rhyl promenade, which was the property of a drug baron who was sent away for many years for importing £55 million of cocaine. That property has remained empty for six or seven years, and it has not been confiscated. Will the measures that the Minister is outlining today help to speed up that process, and will he prioritise that specific property?
5.45 pm
Mr. Coaker:
There are two ways in which we hope to take the matter forward. It is important to recognise that the courts should be encouraged, where someone has been criminally prosecuted for an offence, to place an confiscation order on them when that person is found guilty. We also hope that the civil recovery powers available can be used in exactly the sort of circumstances that my hon. Friend has laid out. Throughout the Bill, we want to ensure that those who profit from crime lose the profits they have made,
whether they are the so-called Mr. Bigs or the people to whom my hon. Friend has referred, who cause havoc and mayhem in many of our communities. With that I commend the new clause to the House, with the added reassurance to the hon. Member for Dundee, East (Stewart Hosie) that I will return in due course to the points he made.
James Brokenshire: The new clause effectively provides additional provisions relating to freezing orders, which come under section 245A and the subsequent sections contained within the Proceeds of Crime Act 2002. Those additional orders were introduced under the Serious Organised Crime and Police Act 2005, and apply only in certain circumstances where proceedings are under way to recover the proceeds of unlawful conduct. The freezing orders need to describe the property concerned and prohibit any person to whom that order applies from dealing with the property. As we said when the freezing order was introduced, it plays an important part in ensuring that we bear down on organised criminals who may be intent on misusing proceeds of crime, and in ensuring that such proceeds are recovered. We have stated on record that the orders are a good thing, so the gap that the Minister has highlighted is relevant.
In the Minister’s letter to me, and the hon. Member for Taunton (Mr. Browne), he states:
“The amendments I have tabled to the Proceeds of Crime provisions in Part 3 of the Bill will create a Civil Recovery Management Receiver. Creating these receivers will fill a legislative gap as it is not currently possible to have a receiver whose only function in civil recovery proceedings is to manage property while it is frozen. Civil Recovery Management Receivers will provide this function.”
There is clearly a gap, and it is interesting that it has taken a little while for it to become apparent and for us to be made aware of it through the consideration of the provisions in the new clause.
The proposal seems sensible because one of the concerns that arises in relation to frozen assets—the Minister alluded to this point—is that, when ensuring full proceeds are received, it may be necessary to manage assets while they are frozen to ensure that they do not diminish in value, and that the funds obtainable are as full as they should be. I recognise the intent behind the provision and the gap to which the Minister refers in his letter. It needs filling to ensure that we get the full proceeds required, and that there is no diminution in the value of the assets subject to the freezing order.
We understand the context of the new clause and the point that the Minister makes. We hope that it will act to ensure that the proceeds of crime are realised in a more effective way, that the value of those assets is maximised through the procedures and process undertaken, and that the issue is dealt with appropriately.
The Government have also tabled many other amendments, which are largely technical. I want to concentrate on amendment No. 27, which deals with section 435 of the Proceeds of Crime Act 2002. The section originally ensured that the director of the Assets Recovery Agency could use the information that he obtained in the exercise of one set of functions in connection with any of his other functions. In other
words, under the 2002 Act, the director could use information gained for one purpose in another context.
When the Bill was in Committee, the Government tried to delete section 435 from the 2002 Act. The measure before us reflects that. However, amendment No. 27 would reintroduce section 435, but in a modified fashion. The amendment would expand the scope and application of the Bill. Proposed new section 435 would apply especially to the Director of Public Prosecutions, the Director of Public Prosecutions for Northern Ireland and the Director of the Serious Fraud Office.
The relevant point about the proposed new section is that it provides that the relevant Director—of Public Prosecutions, of Public Prosecutions for Northern Ireland or of the Serious Fraud Office—can use information obtained under part 5 or part 8 of the 2002 Act,
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