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43GClause 393 Page 227, line 47, at end insert—
"(6) In the case of any investigation there must be reasonable grounds for believing that it is in the public interest for the customer information to be provided having regard to the benefit likely to accrue to the investigation if the information is obtained."


43HClause 399 page 230, line 21, at end insert—
"(6) In the case of any investigation, there must be reasonable grounds for believing that it is in the public interest for the account information to be provided, having regard to the benefit likely to accrue to the investigation if the information is obtained."


43JClause 451, page 260, line 32. after "section" insert "145(2D)"
43KPage 260, line 39, after "section" insert "145(2D)"

Moved, That the House do not insist on their Amendment No. 43 to which the Commons have disagreed for their reason numbered 43A but do agree with Amendments Nos. 43B to 43K in lieu thereof.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

LORDS AMENDMENT NO. 47

After Clause 98, insert the following new clause—


    Compensation of creditors


    (1) Any person who was a creditor of the defendant at the time when the confiscation order was made may, within one year of the date of the order, take an application to the court for compensation.


    (2) The court nay require the enforcement authority to pay compensation to the applicant if it is satisfied that—


(a) as a result of the making of the order the defendant is wholly or in part unable to repay the debt,
(b) the debt was incurred for full consideration; and
(c) at the time the debt was incurred the applicant had no reason to believe that a confiscation order could be made against the defendant."
The Commons disagreed to this amendment for the following reason:


47ABecause it would involve a charge on public funds, and the Commons do not offer any further reason, trusting that this reason may be deemed sufficient

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Lord Falconer of Thoroton: My Lords, I beg to move that this House do not insist on their Amendment No. 47 to which the Commons have disagreed for their reason numbered 47A.

Moved, That the House do not insist on their Amendment No. 47 to which the Commons have disagreed for their reason numbered 47A.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

LORDS AMENDMENT NO. 66

66Clause 123 page 77, line 21, at end insert—
"( ) make provision for the payment of debts of the specified person incurred for full consideration before the restraint order was made;"—
The Commons disagreed to this amendment for the following reason:


66ABecause it is not appropriate to create a preference for unsecured creditors, which would be open to abuse by criminals.

Lord Falconer of Thoroton: My Lords, I beg to move that this House do not insist on their Amendment No. 66 to which the Commons have disagreed for their reason numbered 66A. I have already spoken to this amendment. I beg to move.

Moved, That the House do not insist on their Amendment No. 66 to which the Commons have disagreed for their reason numbered 66A.—(Lord Falconer of Thoroton.)

[Amendment No. 66B, as an amendment to the Motion, not moved.]

On Question, Motion agreed to.

LORDS AMENDMENT NO. 73

73Clause 161, page 96, line 13, at end insert "unless it is of the opinion that there are exceptional circumstances; which justify its not doing so"
The Commons disagreed to this amendment for the following reason:


73ABecause it is not appropriate for the court to have a discretion to decide not to initiate proceedings for confiscation orders.

Lord Falconer of Thoroton: My Lords, I beg to move that this House do not insist on their Amendment No. 73 to which the Commons have disagreed for their reason numbered 73A, but do propose Amendments Nos. 73B to 73D in lieu thereof.


73BClause 229, page 140, line 4, at end insert—
"(3A) But an offence does not satisfy the test in subsection (2)(d) or (e) unless the defendant obtains relevant benefit of not less than M.


    (M) Relevant benefit for the purposes of subsection (2)(d) is—


(a) benefit from conduct which constitutes the offence,
(b) benefit from any other conduct which forms part of the course of criminal activity and which constitutes an offence of which the defendant has been convicted;
(c) benefit from conduct which constitutes an offence which has been or will be taken into consideration by the court in sentencing the defendant for an offence mentioned in paragraph (a) or (b).
(3C) Relevant benefit for the purposes of subsection (2)(e) is—


(a) benefit from conduct which constitutes the offence;

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(b) benefit from conduct which constitutes an offence which has been or will be taken into consideration by the court in sentencing the defendant for the offence mentioned in paragraph (a).
(3D) The Secretary of State may by order vary the amount for the time being specified in subsection (3A)."


73CClause 451, page 260, line 25, after "section" insert "229(3D)"
73DPage 260, line 36, after section" insert "229(3D)"

Moved, That the House do not insist on their Amendment No. 73 to which the Commons have disagreed for their reason numbered 73A, but do propose Amendments Nos. 73B to 73D in lieu thereof.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

LORDS AMENDMENT NO. 78

After Clause 165, insert the following new clause—


    "Compensation of creditors"


    (1) Any person who was a creditor of the defendant at the time when the confiscation order was made may, within one year of the date of the order, make an application to the court for compensation.


    (2) The court may require the enforcement authority to pay compensation to the applicant if it is satisfied that—


(a) as a result of the making of the order the defendant is wholly or in part unable to repay the debt;
(b) the debt was incurred for full consideration, and
(c) at the time the debt was incurred the applicant had no reason to believe that a confiscation order could be made against the defendant."
The Commons disagreed to this amendment for the following reason:


78ABecause it would involve a charge on public funds, and the Commons do not offer any further reason trusting that this reason may be deemed sufficient.

Lord Falconer of Thoroton: My Lords, I beg to move that this House do not insist on their Amendment No. 78 to which the Commons have disagreed for their reason numbered 78A. I have already spoken to this amendment.—(Lord Falconer of Thoroton.)

Moved, That the House do not insist on their Amendment NO. 78 to which the Commons have disagreed for their reason numbered 78A.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

LORDS AMENDMENT NO. 99

99Clause 196, page 120, line 31, at end insert—
"( ) make provision for the payment of debts of the specified person incurred for full consideration before the restraint order was made;"
The Commons disagreed to this amendment for the following reason:


99ABecause it is not appropriate to create a preference for unsecured creditors, which would be open to abuse by criminals.

Lord Falconer of Thoroton: My Lords, I beg to move that this House do not insist on their Amendment No. 99 to which the Commons have disagreed for their reason numbered 99A.

Moved, That the House do not insist on their Amendment No. 99 to which the Commons have disagreed for their reason numbered 99A.—(Lord Falconer of Thoroton.)

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[Amendment No. 99B, as an amendment to the Motion, not moved.]

On Question, Motion agreed to.

LORDS AMENDMENT NO. 110

110Clause 251, page 148, line 29, at beginning insert "Subject to section (Proceedings brought under section 251: defence of respondent),"
The Commons disagreed to this amendment for the following reason:


110ABecause it is not appropriate to provide any such exceptions, the House having reached its decision without the opportunity for debate.

The Attorney-General (Lord Goldsmith) rose to move that this House do not insist on their Amendment No. 110 to which the Commons have disagreed for their reason numbered 110A but do propose the following amendment in lieu thereof—


110BClause 2, page 2, line 21, at end insert—
"(6) The guidance must indicate that the reduction in crime is in general best secured by means of criminal investigations and criminal proceedings."

The noble and learned Lord said: My Lords, with these amendments I shall speak also to your Lordships' Amendment No. 113 to which the Commons have disagreed for their reason numbered 113A.

These amendments go to the heart of the civil recovery scheme contained in Part 5 of the Bill. The amendments made by this House were discussed fully on Report and at Third Reading in this House. Although the specific amendments were not in the event discussed in the other place—as reflected in the reasons for disagreement—the civil recovery scheme had been discussed there at some length previously.

As specified in the reasons, the other place considers—although not with the benefit of debate on the point—that it would not be appropriate to provide the kind of exception to the civil recovery scheme that would result from the amendments.

The noble and learned Lord, Lord Lloyd of Berwick, has on other occasions explained in detail his concerns about the civil recovery scheme contained in the Bill and his reasons for proposing the amendments. For my part, I have made it clear, also in previous debates, that the Government do not share his views. We do not agree that civil recovery proceedings are analogous to a criminal trial. We therefore do not accept that there is an inevitable conflict with the European Convention on Human Rights.

We are clear that the amendments proposed by the noble and learned Lord, Lord Lloyd, and supported by the opposition parties, would make the civil recovery scheme set out in Part 5 of the Bill unworkable. They would not improve the scheme. They would also certainly not make it less vulnerable to challenge in ECHR terms.

Amendments Nos. 110 and 113 would prevent civil recovery proceedings being taken against any person whose own unlawful conduct was alleged to have generated the recoverable property at issue. This would be because such a person would have a right to demand a trial in the Crown Court. However, as civil

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recovery proceedings will not be brought unless criminal proceedings are not appropriate—or have failed—the amendments would have an unacceptable effect in terms of some of the key intended targets of civil recovery.

The amendments would also introduce into the civil recovery proceedings a focus on the guilt of an individual rather than the origins of the property, contrary to the intention of this part of the proposed legislation. However, we appreciate the concern of this House that the bringing of criminal prosecutions is to be preferred where the normal evidential and public interest tests are satisfied. We have stressed at all stages of the passage of the Bill that prosecution will remain the priority, and that the director will pursue civil recovery or taxation only where a prosecution is not appropriate. We accept, however, that there has been nothing on the face of the Bill to this effect. We therefore believe that Amendment No. 110B—an amendment to Clause 2 which we have proposed in lieu of Lords Amendments Nos. 110 and 113—will provide an important safeguard in this regard.

The amendment will ensure that the guidance given to the director by the Secretary of State will make it clear that criminal investigations and criminal prosecutions will—in general—best secure the reduction of crime. This will, I hope, allay any concerns that civil recovery might be used in cases where criminal proceedings should properly be brought. That is a significant confirmation of the position and one that I trust will recommend itself to the House. I beg to move.


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