APPENDIX 1: SERIOUS CRIME BILL [HL]
Memorandum by the Home Office
Introduction
1. The bill is in four Parts. Part 1 creates serious
crime prevention orders. Part 2 creates offences in respect of
encouraging or assisting crime to give effect to the Law Commission's
Report Inchoate Liability for Assisting and Encouraging Crime
(Law Com No. 300, CM 6878, 2006). Part 3 consists of various
measures to prevent or disrupt serious and other crimes. Chapter
1 of Part 3 provides a power for public authorities to share data
with other members of an anti-fraud organisation specified by
order made by the Secretary of State. It also provides a statutory
basis for the Audit Commission's National Fraud Initiative (which
takes place once every two years). Chapter 2 of Part 3 transfers
the functions of the Assets Recovery Agency to the Serious Organised
Crime Agency and other public bodies and provides for the abolition
of that Agency. Chapter 2 also extends the powers of those financial
investigators who are accredited under section 3 of the Proceeds
of Crime Act 2002 and extends the use of production orders and
search and seizure warrants under Part 8 of that Act to investigations
in connection with cash seized under Chapter 3 of Part 5 of that
Act. Chapter 3 of Part 3 amends the application of the regulation
of investigatory powers to Revenue and Customs, but does not include
powers to make delegated legislation. Part 4 sets out supplementary
provisions, including provisions about delegated legislation.
Part 1: Serious Crime Prevention Orders
Clause 4(4): Power to amend Schedule 1 (list of
serious offences)
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: affirmative resolution
2. The power to make a serious crime prevention order
is based on a person having been involved in serious crime and
the aim of such an order is to prevent, restrict or disrupt that
person's involvement in serious crime. The phrases "involved
in serious crime" and "involvement in serious crime"
are both defined in clause 2 (for England and Wales), clause 3
(for Northern Ireland) and clause 4 (for England, Wales and Northern
Ireland). The definition includes reference to the commission
or facilitation of a serious offence in England and Wales or,
as the case may be, Northern Ireland and, in the case of "involved
in serious crime", outside England and Wales or Northern
Ireland. The term "a serious offence in England and Wales"
is defined in clause 2(2) and includes an offence that is specified
in Part 1 of Schedule 1. The term "a serious offence in a
country outside England and Wales" is defined in clause 2(5)
and includes an offence that would be an offence in England and
Wales and that would be specified in Part 1 of Schedule 1 if committed
in England and Wales. The term "a serious offence in Northern
Ireland" is defined in clause 3(2) and includes an offence
that is specified in Part 2 of Schedule 1. The term "a serious
offence in a country outside Northern Ireland" is defined
in clause 3(5) and includes an offence that would be an offence
in Northern Ireland and that would be specified in Part 2 of Schedule
1 if committed in Northern Ireland. Clause 4(4) allows the Secretary
of State to amend the lists in Schedule 1 by order. The power
will enable the lists to be kept up to date and modified when
appropriate without the need for primary legislation.
3. As an order under clause 4(4) will amend primary
legislation it is considered that the most appropriate parliamentary
procedure is the affirmative resolution procedure; as to which,
see clause 76(3).
Clause 7: Exceptions to those who can be subject
to a serious crime prevention order
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: negative resolution
4. A serious crime prevention order can be imposed
on any "person". This term includes natural persons
and, by virtue of Schedule 1 to the Interpretation Act 1978 (c.
30), also includes bodies corporate and unincorporated. It is
considered that there may be certain persons that should not be
capable of being subject to a serious crime prevention order because
it would not be appropriate for them to be so subject. This power
allows the Secretary of State to make an order excluding such
bodies from the ambit of the provisions. The order will be subject
to the negative resolution procedure because it is considered
that providing for an exception will not amount to an amendment
to primary legislation and that this is the appropriate level
of parliamentary scrutiny (see clause 76(6)).
Clauses 27(5) and 28(5): power to make an order
for the winding up of partnerships
Power conferred on: Lord Chancellor, with the
concurrence of the Secretary of State and the Lord Chief Justice
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: negative resolution
5. Clause 27 allows a relevant applicant authority
to present a petition for the winding up of a company if that
company has been convicted of a breach of a serious crime prevention
order and the authority considers it to be in the public interest
for the company to be wound up. Clause 27(5), in relation to England
and Wales, taps into the existing order making power in section
420 of the Insolvency Act 1986 (c. 45) to allow an order to be
made to allow the winding up of a partnership that has been convicted
of breach of a serious crime prevention order. An order under
section 420, as modified by clause 27(5), will provide that the
provisions of the Insolvency Act 1986 are to apply to the winding
up of a partnership with such modifications as are specified in
the order.
6. Clause 27(7) limits the power in subsection (5)
by providing that an order made by virtue of that subsection must
only allow a court to wind up a partnership if the partnership
has been convicted of an offence under clause 25 and the court
considers that it is just and equitable for the partnership to
be wound up. The power in section 420 is subject to the negative
resolution procedure and it is not considered necessary to change
that position insofar as an order relates to the winding up of
a partnership for breach of a serious crime prevention order.
7. Clause 28(5) makes identical provision in relation
to Northern Ireland. It allows the power in Article 364 of the
Insolvency (Northern Ireland) Order 1986 (SI 1986/2405 (N.I. 19))
to be exercised. Clause 28(7) limits the operation of the power
in the same way as clause 27(7).
Clauses 27(6) and 28(6): power to make an order
for the winding up of a relevant body
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: negative resolution
8. Clause 27 allows a relevant applicant authority
to present a petition for the winding up of a company if that
company has been convicted of a breach of a serious crime prevention
order and the authority considers it to be in the public interest
for the company to be wound up. Clause 27(6) allows the Secretary
of State to make an order to allow a relevant body to be wound
up. The order will apply the provisions of the Insolvency Act
1986 to a relevant body with such modifications as are specified
in the order. Clause 27(7) limits the power in subsection (6)
by providing that an order made by virtue of that subsection must
only allow a court to wind up a relevant body if the relevant
body has been convicted of an offence under clause 25 and the
court considers that it is just and equitable for the relevant
body to be wound up. The power is subject to the negative resolution
procedure (see clause 76(6)) as this is consistent with the power
in relation to partnerships referred to in clause 27(5).
9. Clause 28(6) makes identical provision in relation
to Northern Ireland. It allows for the provisions of the Insolvency
(Northern Ireland) Order 1986 to be applied with modifications.
This power is also subject to the negative resolution procedure
(see clause 76(6)). Clause 28(7) limits the operation of the power
in the same way as clause 27(7).
Clauses 27(11)(d) and 28(11)(d): power to add
relevant bodies
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: negative resolution
10. Clause 27(6) allows the Secretary of State to
make an order to allow a "relevant body" to be wound
up for breach of a serious crime prevention order. The term "relevant
body" is defined in clause 27(11). Paragraphs (a) to (c)
of the definition list a number of specific bodies. Paragraph
(d) allows the Secretary of State to add other bodies to the list
of relevant bodies. This will allow the Secretary of State to
provide for the winding up of bodies that he considers ought to
be capable of being wound up under these provisions. The power
is subject to the negative resolution procedure (see clause 76(6))
which is considered to be the appropriate level of parliamentary
scrutiny.
11. Clause 28(11)(d) provides a corresponding power
to allow the Secretary of State to add to the list of Northern
Ireland relevant bodies; this power is also subject to the negative
resolution procedure.
Clause 32: power to make provision for overseas
bodies
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: negative resolution
12. Clauses 29, 30 and 31 make provision to allow
serious crime prevention orders to be made and operate in relation
to bodies corporate (including limited liability partnerships),
partnerships and unincorporated associations respectively. Clause
32 allows the Secretary of State to make modifications to those
provisions insofar as they relate to overseas bodies. The power
is subject to the negative resolution procedure (see clause 76(6))
and this is considered to be the appropriate level of parliamentary
scrutiny.
Clause 34(4) and (5): power to make rules of court
in respect of Crown Court proceedings
Power conferred on: Civil Procedure Rules Committee
Power exercisable by: Rules made by statutory
instrument
Parliamentary procedure: negative resolution
13. Clause 19 of the Bill allows the Crown Court
to make a serious crime prevention order when a person is convicted
of a serious offence. Clause 20 allows the Crown Court to vary
the serious crime prevention order of a person who is convicted
of a serious offence. Clause 21 allows the Crown Court to vary
a serious crime prevention order when a person is convicted of
a breach of a serious crime prevention order. Clause 34(1) provides
that the proceedings under these clauses are to be civil proceedings.
This means that provision must be made for the procedure to be
followed before the Crown Court because the criminal procedure
rules will not apply. Clause 34(4) and (5) enable rules of court
under section 1 of, and Schedule 1 to, the Civil Procedure Act
1997 (c. 12) to be made in relation to the proceedings before
the Crown Court in relation to a serious crime prevention order.
Clause 34(5) specifically provides that rules made under the powers
conferred by clause 34(4) may, in particular, include rules of
the same kind as those made in relation to the High Court. This
subsection has been included because normally applications for
the making and variation of serious crime prevention orders will
be dealt with by the High Court.
14. The Civil Procedure Act 1997 provides for civil
procedure rules to be made by the Civil Procedure Rules Committee.
The rules are subject to the negative resolution procedure and
it is not considered that there is any need to change that position
in so far as the rules relate to the procedure before the Crown
Court in relation serious crime prevention orders.
Schedule 2, paragraph 5: power of the Attorney
General to make regulations about fees of legal representatives
and costs and expenses of witnesses
Power conferred on: the Attorney General
Power exercisable by: Regulations made by statutory
instrument
Parliamentary Procedure: negative resolution
15. The power to apply for a serious crime prevention
order is conferred, amongst others, on the Director of Public
Prosecutions ("the DPP"). Part 1 of Schedule 2 to the
Bill makes provision for the exercise of this function by the
DPP including extending the provisions of section 14 of the Prosecution
of Offences Act 1985 (c. 23) to enable the Attorney General to
make regulations about the fees of legal representatives and the
costs and expenses of witnesses and others who attend proceedings
other than to give evidence, in relation to proceedings about
serious crime prevention orders.
16. The power in the Prosecution of Offences Act
1985 is subject to the negative resolution procedure and it is
not considered appropriate to change that position in so far as
the regulations relate to serious crime prevention orders.
Schedule 2, paragraph 15: power of the Attorney
General to make regulations about fees of legal representatives
and costs and expenses of witnesses
Power conferred on: the Attorney General
Power exercisable by: Regulations made by statutory
instrument
Parliamentary Procedure: negative resolution
17. The power to apply for a serious crime prevention
order is conferred, amongst others, on the Director of the Serious
Fraud Office. Part 1 of Schedule 2 to the Bill makes provision
for the exercise of this function by the Director of the Serious
Fraud Office including extending the provisions of paragraph 8
of Schedule 1 to the Criminal Justice Act 1987 (c. 38) to enable
the Attorney General to make regulations about the fees of legal
representatives and the costs and expenses of witnesses and others
who attend proceedings other than to give evidence, in relation
to proceedings about serious crime prevention orders.
18. The power in the Criminal Justice Act 1987 is
subject to the negative resolution procedure and it is not considered
appropriate to change that position in so far as the regulations
relate to serious crime prevention orders.
Part 2: Encouraging or assisting crime
Clause 56(3) Power to add or remove provisions
where the reference to the common law offence of incitement has
effect as a reference to the offences under clauses 39 and 40
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: Affirmative resolution
19. Clause 56(1) provides that in the provisions
listed in Part 1 of Schedule 5 to the Bill, any reference to the
common law offence of inciting the commission of another offence,
which is abolished in clause 54, has effect as a reference to
the offences under Part 2 of the Bill. Subsection (3) provides
a power for the Secretary of State to amend Part 1 of Schedule
5 either by adding or removing a provision from the list in that
Part.
20. This is a limited power which will be used to
provide that where there are references to the common law of incitement,
these are to be read as if they are references to the new offences
under Part 2 of the Bill.
21. An order under clause 56(3) is subject to the
affirmative resolution procedure (see clause 76(3)). The Department
considers that this would provide the appropriate level of parliamentary
scrutiny.
Part 3: Other measures to prevent and disrupt serious
and other crime
Chapter 1: Prevention of fraud
Clause 61(8): Power to specify an anti-fraud organisation
in context of disclosure of information to prevent fraud
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: Negative resolution
22. Clause 61(1) enables a public authority (as defined
by clause 61(8)), for the purposes of preventing fraud or a particular
kind of fraud, to disclose information as a member of an anti-fraud
organisation or otherwise in accordance with arrangements made
by such an organisation. Clause 61 does not limit the circumstances
in which information may be disclosed apart from that clause (clause
61(7)). No disclosure is authorised by clause 61 if it contravenes
the Data Protection Act 1998 or is prohibited by Part 1 of the
Regulation of Investigatory Powers Act 2000.
23. The organisation needs to be "specified"
and this is defined by clause 61(8) as specified by order made
by the Secretary of State. By virtue of clause 76(6) such an order
is subject to annulment in pursuance of a resolution of either
House of Parliament. It is submitted that this represents the
appropriate level of parliamentary scrutiny. If Parliament enacts
clause 61, it will have accepted the principle of data sharing
for the prevention of fraud with members of a specified anti-fraud
organisation. The order enables such an organisation to be identified
and thereby enables the data sharing which is envisaged by the
clause to take place.
Clause 62(7): Power to specify information and
public authorities for purposes of offence in clause 61
Power conferred: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: Negative resolution
24. Clause 62(1) creates an offence in respect of
the further disclosure of information which has been disclosed
to the person making the further disclosure by a public authority
as a result of membership of an anti-fraud organisation that has
been specified under clause 61 (see the definition of "anti-fraud
organisation" in clause 61(8)). The offence is subject to
the exceptions in clause 62(2) and the defence in clause 62(3).
25. However, the offence only applies to "protected
information" within the meaning of clause 62(5). Such information
is either "revenue and customs information" within the
meaning of clause 62(6)(a) or "specified information"
disclosed by a "specified public authority". Under the
definition of those expressions in clause 62(7), such information
is information specified or described by order made by the Secretary
of State and such an authority is one so specified or described.
By virtue of clause 76(6), the order is subject to the negative
resolution procedure. It is submitted that this is the appropriate
level of parliamentary scrutiny for an order which does what the
clause envisages, namely, specifying those public authorities
whose information benefits from the additional protection provided
by the offence in clause 62. Such an order is likely to limit
the information which is so protected to information which reveals
the identity of the person to whom it relates. However, as it
is not known which public authorities (if any) will be specified
under this power, it is not known what information of such an
authority needs to be protected; hence the need to provide for
this by subordinate legislation.
Schedule 6, paragraph 2 (section 32G of the Audit
Commission Act 1998): Power to specify additional purposes for
undertaking data-matching and to add public bodies to the mandatory
list
Power conferred on: Secretary of State
Power exercised by: Order made by statutory instrument
Parliamentary procedure: Affirmative resolution
26. Under new section 32A(3) of the Audit Commission
Act 1998, to be inserted by paragraph 2 of Schedule 6 to the Bill,
the Commission may conduct data-matching exercises for the purposes
of assisting in the prevention and detection of fraud. However
it has been recognised that such exercises may also benefit the
public in ways that extend beyond the detection and prevention
of fraud, and that there should be sufficient flexibility to add
further purposes if appropriate in due course. This is provided
for in section 32G(1)(a)(see further below). Section 32G(1)(b)
also enables the Secretary of State to modify the application
of Part 2A of the Audit Commission Act 1998 (i.e. those provisions
to be inserted Schedule 6 of the Bill) in relation to any new
purposes that are added.
27. New section 32G(2) sets out the kinds of purposes
that the Secretary of State may seek to add to section 32A(3).
These include (but are not limited to) the prevention and detection
of crime more generally (i.e. beyond fraud), assisting in the
apprehension and prosecution of offenders and assisting in the
recovery of debt owing to public bodies. It is submitted that
these types of purposes could, in due course, provide significant
benefits to the public.
28. Under new section 32B, to be inserted by paragraph
2 of Schedule 6 to the Bill, there will be a mandatory duty on
certain public bodies to participate in the Commission's data-matching
exercise. These include bodies that are subject to audit and English
best value authorities. These bodies are currently within the
Audit Commission's statutory remit. In addition, however, there
may be other bodies in the future that the Secretary of State
considers should also be subject to section 32B. It is submitted
that section 32G(3)(a) and (c) provide the requisite degree of
flexibility, enabling the Secretary of State to add to, or remove
from that list, additional public bodies as appropriate. Again,
under section 32G(3)(b), the Secretary of State may modify the
application of Part 2A of the Audit Commission Act 1998 to those
bodies as appropriate.
29. Section 32G(4) provides that an order made under
section 32G may also include such incidental, consequential or
transitional provision as the Secretary of State thinks fit. It
is submitted that this section should help ensure that any orders
made under section 32G are fully compatible with the overall scheme
of the Act.
30. Section 32G(5) defines "public body"
to include bodies or persons who exercise functions of a public
nature, but only to the extent of those functions. It is submitted
that this achieves the correct balance, providing scope to include
relevant public bodies, but also any private sector body to the
extent that it might exercise public functions.
31. By virtue of section 52(1A) of the Audit Commission
Act 1998 (to be inserted by paragraph 3 of Schedule 6 to the Bill)
an order under new section 32G will be subject to the affirmative
resolution procedure. This is regarded as appropriate having regard
to the powers conferred by new section 32G(1).
Chapter 2: Proceeds of crime
Clause 66(1): Power to appoint day for the Asset
Recovery Agency and the corporation sole that is its Director
ceasing to exist
Power conferred: Secretary of State
Power exercised by: Order made by statutory instrument
Parliamentary procedure: None
32. Paragraphs 103 and 120 of Schedule 7 to the Bill
repeal sections 1 and 2 of, and Schedule 1 to, the Proceeds of
Crime Act 2002 which establish the Director of the Assets Recovery
Agency and the Agency. Clause 66(1) provides for the Secretary
of State by order to appoint a day on which the Agency and the
corporation sole that is its Director to cease to exist. As the
principle of the abolition of the Agency and Director will have
been approved by Parliament in enacting Schedule 7, this Order
(which resembles a commencement order) is not subject to any parliamentary
procedure.
Schedule 7, paragraph 85: Power to repeal Part
6 of the Proceeds of Crime Act 2002
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: Affirmative resolution
33. Part 6 of the Proceeds of Crime Act 2002, as
amended by Schedule 7 to the Bill, enables the Serious Organised
Crime Agency to serve notice on the Commissioners for Her Majesty's
Revenue and Customs that it will take on certain of their functions.
This power is to be subject to a review by that Agency, the Commissioners
and the Home Office to determine whether Revenue functions are
needed by the Agency as a means to disrupt crime and deprive suspected
criminals of the proceeds of their criminal acts. If it is determined
that they are not, the power to repeal Part 6 in paragraph 85
of Schedule 7 to the Bill will be exercised.
34. By virtue of clause 76(3), the power to make
an order repealing Part 6 is subject to the affirmative resolution
procedure. This is the appropriate level of parliamentary scrutiny
for an order that repeals primary legislation.
Schedule 7, paragraph 138(2): power to designate
public functions as exceptions to the offence in section 40 of
the Commissioners for Revenue and Customs Act 2005
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: Affirmative resolution
35. Section 40(1) of the Commissioners for Revenue
and Customs Act 2005 creates an offence which prohibits the Revenue
and Customs Prosecution Office from disclosing information which
is held by it in connection with its functions and which relates
to an identifiable person. Section 40(2) sets out exceptions to
this offence. The amendment made by paragraph 138(2) of Schedule
7 to the Bill inserts further exceptions. These exceptions reflect
those in respect of the Director of the Assets Recovery Agency
("the Director of ARA") in section 438(1) of the Proceeds
of Crime Act 2002. Under Part 2 of Schedule 7 to the Bill, the
Director of Revenue and Customs Prosecutions will acquire the
functions of Director of ARA under Chapter 2 of Part 5 of the
2000 Act (civil recovery).
36. New section 40(2)(cb), to be inserted by paragraph
138(2) of Schedule 7 to the Bill enables the Secretary of State
by order to create further exceptions to the offence in section
40(1) if the disclosure is made for the purposes of the exercise
of a function which the Secretary of State thinks is a public
function. By virtue of section 40(10A)(c) to be inserted by paragraph
138(3) of Schedule 7, such an order is subject to the affirmative
resolution procedure. This power is the same as the power conferred
on the Secretary of State by section 438(1)(i) and (9) of the
2002 Act. That power was also subject to the affirmative resolution
procedure (see section 459(6)(a)). The power in section 438(1)(i)
and (9) has been exercised and an equivalent order may be needed
under this new power. The affirmative resolution procedure is
seen as the appropriate level of parliamentary control in respect
of a power that has an impact on the scope of a provision in primary
legislation.
Schedule 8, paragraph 1: power to make a scheme
transferring staff, property, rights and liabilities of the Assets
Recovery Agency to the Serious Organised Crime Agency and the
National Policing Improvement Agency
Power conferred on: Secretary of State
Power exercisable by: Statutory scheme
Parliamentary procedure: None
37. Clause 66(3) provides that Schedule 8 to the
Bill has effect. By virtue of the definition of "transfer
scheme" in paragraph 1 of Schedule 8, power is conferred
on the Secretary of State to make a scheme under the powers conferred
by that Schedule. The scheme is not to be made as a statutory
instrument.
38. The Assets Recovery Agency was established by
section 1 of, and Schedule 1 to, the Proceeds of Crime Act 2002.
Its Director is a corporation sole (section 1(3)). Clause 66(1)
provides for the Agency and the corporation sole that it is its
Director ceasing to exist. This is consequential on the amendments
made to the 2002 Act by Schedule 7 to the Bill. That Schedule
repeals the functions of the Director of the Assets Recovery Agency
under Parts 2 and 4 of the 2002 Act and transfers the functions
under Parts 1, 5, 6 and 8. Most of the functions are transferred
to the Serious Organised Crime Agency (established under Part
1 of the Serious Organised Crime and Police Act 2005).
39. Paragraphs 2 to 9 of Schedule 8 to the Bill confer
power to make provision for the transfer of staff, property, rights
and liabilities of the Assets Recovery Agency to the Serious Organised
Crime Agency and the National Policing Improvement Agency (established
under Schedule 1 to the Police and Justice Act 2006). Paragraph
10 of Schedule 8 requires the Secretary of State to consult such
bodies appearing to represent the interests of the Director and
members of staff of the Assets Recovery Agency as he considers
appropriate.
40. Similar provisions to make transfer schemes other
than by order subject to parliamentary scrutiny were contained
in section 58 of, and Schedule 3 to, the Serious Organised Crime
and Police Act 2005 (as respects transfer to the Serious Organised
Crime Agency); section 6(3) of, and Schedule 2 to, the Courts
Act 2003 (as respects the abolition of Magistrates' Courts Committee);
and section 30(3) of, and Schedule 3 to, the Water Act 2003. Following
these precedents, and having regard to the point that the scheme
merely gives effect to transfers which will have been approved
by Parliament, it is not proposed to make the scheme subject to
any parliamentary procedure.
Clause 70(2) and (4): Power to specify a description
of accredited financial investigator
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: Negative resolution
41. The amendment which subsection (2) of clause
70 makes to section 45 of the Proceeds of Crime Act 2002 ensures
that a financial investigator who is accredited under the scheme
established under section 3 of that Act (see section 3(5)) and
who exercises the power to seize property to which a restraint
order applies by virtue of the amendment made by subsection (1)
falls within a description of such investigators specified by
order of the Secretary of State. The same comments apply to the
amendment which subsection (4) makes to section 194 of the 2002
Act (the equivalent Northern Ireland provisions) in respect of
the amendment made by subsection (3).
42. The power to make such an order is set out in
section 453 of the Proceeds of Crime Act 2002. An order under
it is subject to the negative resolution procedure by virtue of
section 459(4) of that Act. The power enables the Secretary of
State to provide that a particular reference in that Act to an
accredited financial investigator is a reference to such an investigator
who falls within a description specified in the order. By virtue
of an amendment made by clause 73(1), the description may be framed
by reference to a person having undertaken particular types of
training.
43. There are various existing references in the
Proceeds of Crime Act 2002 where an accredited financial investigator
needs to fall within a description specified in such an order
in order to be able to exercise a particular power (see, for example,
section 378(2)(d) and (6)(c)). The amendments made by clause 70(2)
and (4) merely extend the circumstances when an order is needed
to those resulting from the amendments made by clause 70(1) and
(3). The level of parliamentary scrutiny remains the same and
is, in the Department's view, appropriate to the subject matter.
44. The comments made in the context of clause 70(2)
and (4) apply to equivalent amendments made by clause 72(2), (4),(6)
and (8) and paragraph 12 of Schedule 10.
Schedule 10, paragraph 3(2): Power to specify
a description of accredited financial investigator
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: Negative resolution
45. Paragraph 3(2) of Schedule 10 to the Bill inserts
an additional paragraph into section 290(4) of the Proceeds of
Crime Act 2002 to provide a definition of "senior officer"
in respect of accredited financial investigators. An accredited
financial investigator is a financial investigator accredited
under the scheme established under section 3 of the 2002 Act.
Section 290 requires the approval of such an officer before the
search and seizure powers conferred by section 289 of that Act
can be exercised in any case when it is not practicable to get
the approval of a justice of the peace. A senior officer in this
context is an accredited financial investigator who falls within
a description specified for this purpose by order of the Secretary
of State under section 453 of the 2002 Act. Similar provision
is made in respect of officers in relation to accredited financial
investigators by section 378(2)(d) and (6)(c) of that Act. Under
section 459(4), such an order is subject to the negative resolution
procedure and this is considered the appropriate level of parliamentary
scrutiny.
Schedule 10, paragraph 11: Power to amend provision
about compensation in respect of cash seized by accredited financial
investigators
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: Affirmative resolution
46. Chapter 3 of Part 5 of the Proceeds of Crime
Act 2002 enables constables and officers of Revenue and Customs
to seize cash where there are reasonable grounds to suspect that
the cash is recoverable property (within the meaning of section
316(1) of that Act) or intended for use in unlawful conduct (within
the meaning of section 241 of that Act). Section 298 enables a
magistrates' court in England and Wales and Northern Ireland to
order the forfeiture of such seized cash. Section 302 enables
the person to whom the cash belongs or from whom it was seized
to apply to a magistrates' court for compensation where cash has
been seized and no forfeiture order has been made. Section 302(7)
provides for the authority which is to pay such compensation.
47. Schedule 10 to the Bill will amend Chapter 3
of Part 5 of the 2002 Act to confer the powers to recover cash
on accredited financial investigators in addition to constables
and officers of Revenue and Customs. Paragraph 11 of that Schedule
amends section 302 by inserting a new subsection (subsection (7A))
to provide for the authority which is to pay compensation under
section 302 in the case of cash seized by an accredited financial
investigator when no forfeiture order has been made. New subsection
(7A) makes provision for payment in the case of such investigators
who are civilians employed by the police as well as members of
Government departments. It also includes a provision requiring
the employer of the investigator to pay in those cases for which
express provision is not made (see subsection (7A)(f)).
48. In addition, paragraph 11 will insert new subsection
(7B) in section 302. This will confer power to amend new subsection
(7A) by order made by the Secretary of State. The reason for including
this provision is that there might be a category of accredited
financial investigator employed by an authority in relation to
which the catch-all provision in new subsection (7A)(f) is inappropriate.
This is because there may be cases, as is in the case of the police,
where expenses are met otherwise than by the employer. In this
context, it is necessary to note that there are no restrictions
on the categories of persons who can become accredited financial
investigators.
49. As the new power will amend primary legislation,
section 459 of the 2002 Act (which provides for parliamentary
scrutiny of orders and regulations made under it) is amended by
paragraph 14(3) of Schedule 10 so that an order made under the
new power will be subject to the affirmative resolution procedure.
New section 459(6A), to be inserted by paragraph 14(4) of Schedule
10, will ensure that an order under the new power is not to be
treated as a hybrid instrument.
Schedule 10, paragraph 12: Power to specify a
description of accredited financial investigator
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: Negative resolution
50. The powers which are to be conferred on accredited
financial investigators by the amendments which Schedule 10 to
the Bill will make to Chapter 3 of Part 5 of the Proceeds of Crime
Act 2002 are described in the context of paragraph 11 of Schedule
10 above. Paragraph 12 of that Schedule will further amend Chapter
3 by inserting a new section (section 303A) about the exercise
by accredited financial investigators of their new functions.
New section 303A(1) requires that such investigators fall within
a description specified in an order made by the Secretary of State
for the purposes of the relevant provision in Chapter 3 under
section 453 of the 2002 Act. The comments on the powers under
section 453 are discussed above in the context of the amendments
made by clause 70(2) and (4). Those comments apply equally to
new section 303A(1).
Clause 72(2),(4),(6) and (8): Power to specify
a description of accredited financial investigator
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: Negative resolution
51. The powers conferred by the amendments made by
subsections (2),(4),(6) and (8) of clause 72 relate to the amendments
made by subsections (1), (3), (5) and (7), respectively. The amendments
made by subsections (1), (3) and (5) add references to accredited
financial investigators to the persons who can exercise the powers
in sections 352 and 353 of the Proceeds of Crime Act 2002 which
concern search and seizure warrants in respect of investigations
under Part 8 of that Act. Subsection (7) amends section 378(3A)
(which will be inserted by Schedule 9 to the Bill) to insert a
reference to accredited financial investigators in the definition
of "appropriate officer" in the context of detained
cash investigations. In each case, the amendments made by subsections
(2), (4), (6) and (8) qualify these references to accredited financial
investigators to require that they fall within a description specified
in an order for the purposes of these new provisions made by the
Secretary of State under section 453 of the 2002 Act.
52. Orders under section 453 were discussed in the
context of the amendments made by clause 70(2) and (4) (above).
The comments on section 453 in relation to those amendments apply
equally in relation to these amendments.
Part 4: Miscellaneous and general
Clause 77: Power to make supplementary, incidental
and consequential provision
Power conferred on: Secretary of State
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: Affirmative resolution
where primary legislation is amended or repealed; otherwise negative
resolution
53. Clause 77(1) confers power on the Secretary of
State by order to make such supplementary, incidental or consequential
provision as he consider necessary for the purposes (general or
particular) of the Bill or in consequence of provision made by
or under the Bill or for giving full effect to the Bill or any
such provision. The power does not extend to matters that are
within the legislative competence of the Scottish Parliament (clause
77(3)). However, the power may be exercised by amending, repealing,
revoking or otherwise modifying any enactment. By virtue of clause
76(3), an order under this provision is subject to the affirmative
resolution procedure (if it amends or repeals primary legislation
and to the negative resolution procedure if it does not (see clause
76(4) and(5)).
54. The powers conferred by this clause are wide.
But there are various precedents for such a provision including
section 173 of the Serious Organised Crime and Police Act 2005,
section 333 of the Criminal Justice Act 2003, section 426 of the
Financial Services and Markets Act 2000 and section 127 of the
Postal Services Act 2000. It is possible that further provision
may be necessary to ensure that crime prevention orders under
Part 1 of the Bill are effective. It is also possible that further
amendments to legislation may be needed in respect of the National
Fraud Initiative (Schedule 6) and the abolition of the Assets
Recovery Agency (Schedule 7). Indeed, as respects the latter,
the amendments which Schedules 7 and 9 make to the Proceeds of
Crime Act 2002 are drafted on the assumption that Schedule 9 will
come into force before Schedule 7(see paragraph 90(30 of Schedule
7 and paragraph 96) of Schedule 9); further amendments would be
needed if that is not the case.
55. As any order amending primary legislation is
subject to the affirmative resolution procedure and the negative
resolution procedure applies to other orders under this clause,
it is submitted that the appropriate level of parliamentary scrutiny
applies.
Clause 78(2) and (3): Power to make transitional
and transitory provisions and savings
Power conferred on: Secretary of State and the
Scottish Ministers
Powers exercisable by: Order made by statutory
instrument
Parliamentary procedure: None
56. Clause 78(2) is a standard provision in Bills.
It enables the Secretary of State by order to make such provision
as he considers appropriate for transitional, transitory and saving
purposes in connection with the coming into force of any provision
of the Bill. The power is likely to be exercised with the power
to bring the Bill's provisions into force by order (as to which,
see the note on clause 81 below). Like that order and similar
powers in other legislation (such as section 178(10) of the Serious
Organised Crime and Police Act 2005), the order is not subject
to any parliamentary procedure. It is not considered appropriate
that it should be so subject as the power is exercisable only
in the context of the coming into force of the Bill's provisions.
Clause 78(3) confers an equivalent power on the Scottish Ministers
in respect of those provisions in the Bill specified in clause
81(4) which they are to bring into force.
Clause 81: Commencement power
Power conferred on: Secretary of State and the
Scottish Ministers
Power exercisable by: Order made by statutory
instrument
Parliamentary procedure: None
57. Clause 81 is the standard power to bring provisions
of the Bill into force by commencement order. As usual with commencement
orders, they are not subject to any parliamentary procedure. Parliament
will have approved the provisions to be commenced by enacting
them; commencement by order enables the provisions to be brought
into force at a convenient time.
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