Home Office circular 013 / 2008

Commencement of provisions under the Serious Crime Act 2007

Commencement of provisions under the Serious Crime Act 2007 relating to disclosure of information, investigatory powers, proceeds of crime, public audit, revenue and customs, police (England and Wales) and serious crime prevention orders.

First Commencement Order

The Serious Crime Act 2007 (Commencement No.1) Order 2008 (SI 2008/219 (C. 5)) commenced provisions which came into force on 15th February 2008 allowing Her Majesty’s Revenue and Customs (HMRC) to disclose information for the purposes of civil recovery of the proceeds of crime and extending their investigatory powers to make various criminal investigation powers apply consistently to all functions of HMRC. 

The Order also commenced on 1st March 2008 provisions on serious crime prevention orders, data matching, data sharing and the abolition of the Assets Recovery Agency, which were needed in order to prepare for the substantive commencement of provisions on those matters at a later date.  

Second Commencement Order

The Serious Crime Act 2007 (Commencement No.2 and Transitional and Transitory Provisions and Savings) Order 2008 (SI 2008/755 (C. 34)) commenced the following provisions.

Provisions commenced on 1 April 2008

Assets Recovery Agency

Section 74 together with Schedule 8 of the Serious Crime Act 2007 (the 2007 Act) provide for the abolition of the Assets Recovery Agency. (ARA). ARA ceased to exist on 1st April 2008 (under SI 2008 No 575). From that date ARA’s main functions as regards the civil recovery of the proceeds of crime under Part 5 of the Proceeds of Crime Act 2002 (POCA) and its Revenue functions under Part 6 were transferred to the Serious Organised Crime Agency (SOCA). Its training and accreditation functions were transferred to the National Policing Improvement Agency.

The 2007 Act also extended ARA’s civil recovery powers to the Director of Public Prosecutions, the Director of Revenue and Customs Prosecutions, the Director of the Serious Fraud Office and the Director of Public Prosecutions for Northern Ireland.    

SOCA has not inherited ARA's enforcement powers, or its powers with regard to litigation in criminal confiscation cases. SOCA does, however, retain the power to conduct investigations leading to criminal confiscation.

In legacy cases SOCA will retain ARA's full powers and will take these cases to their conclusion. Legacy cases are those cases  that had been referred to, and accepted by, ARA at 31 March 2008. The detailed provisions on the transfer of ARA’s confiscation functions to SOCA in respect of these cases are set out in article 4 of the second commencement order. The second commencement order also makes provision for the transfer of statutory functions from ARA to SOCA and the National Policing Improvement Agency and for transitional and savings provisions for specific powers, duties and functions.

There is also a Transfer Scheme made under Schedule 9 to the 2007 Act, which transfer property, rights and liability from ARA to SOCA and the National Policing Improvement Agency.

[Where a police force or other law enforcement agency, or a prosecution authority, has a criminal case after 1 April, which it has been unable to prosecute successfully or obtain a confiscation order it will be able to refer it to SOCA to consider adopting it for civil recovery and/or assessing for tax.]   

Provisions commenced on 6th April 2008

Serious Crime Prevention Orders

A serious crime prevention order (SCPO) is a new kind of civil injunctive order which is aimed at preventing serious crime.

Under section 1 of the 2007 Act an SCPO can be made on an application by the Director of Public Prosecutions, the Director of the Revenue and Customs Prosecutions Office, the Director of the Serious Fraud Office and the Director of Public Prosecutions for Northern Ireland, to the High Court. Under section 19 an application can be made by one of those Directors to the Crown Court that is dealing with the potential subject of the SCPO, if that person has been convicted of a serious offence either before the Crown Court or before a magistrates’ court who has committed the person to the Crown Court to be dealt with. In either court, these will be civil proceedings with a civil standard of proof.

In the case of the High Court, the judge must be satisfied that the person has been involved in serious crime (whether in England and Wales or elsewhere or Northern Ireland or elsewhere in the case of an SCPO made by the Northern Ireland courts).

In the case of the Crown Court, the person must have been convicted of a serious offence by the Crown Court or committed to the Crown Court following conviction of a serious offence by a magistrates’ court. In both cases the court must have reasonable grounds to believe that an order would protect the public by preventing, restricting or disrupting involvement by the person in serious crime in England and Wales, or, as the case may be, Northern Ireland. Definitions of what constitutes a serious offence and what is meant by involvement in serious crime are set out in sections 2, 3 and 4 of the 2007 Act.

An SCPO can be for a maximum of 5 years and must state when it starts and ends. However, this does not prevent the making of a subsequent order, or provision, in the same or different terms, provided the requirements of section 1 or 19 are still met. The fresh order can be made in anticipation of the original one ending in order to ensure continuity (section 16).

An order may contain such prohibitions restrictions or requirements and such other terms as the court considers appropriate for the purpose of protecting the public by preventing, restricting or disrupting involvement by the person concerned in serious crime in England and Wales, or as the case may be, Northern Ireland.

The types of provision that the court can consider is entirely open within the requirement that they must be appropriate for the overriding purpose set out in section 1 or 19. Prohibitions etc. are not limited to England and Wales (or Northern Ireland, in the case of an SCPO made by the Northern Ireland courts) and can extend outside the jurisdiction but must be aimed at preventing, restricting or disrupting involvement in serious crime in England and Wales, or as the case may be, Northern Ireland.  Section 5 sets out examples of the types of prohibition, restriction or requirement that an order might contain such as, conditions relating to:

• financial, property or business dealings
• working arrangements
• the premises he/she is allowed to use and for what purpose
• the use of any item
• travel both within the UK and abroad

An order may also require a person to answer questions or provide information and documents specified in the order.  The order can specify that how, when and where the questions must be answered or the information or documents provided, is to be determined by a law enforcement officer.

In addition to individuals an application for an SCPO can be made against a body corporate, a partnership or and unincorporated association.

Breach of an SCPO without reasonable excuse constitutes an offence punishable:

• on summary conviction by up to 12 months’ imprisonment, a fine not exceeding the statutory maximum or both
• on conviction on indictment by up to 5 years’ imprisonment or a fine or both

The use of SCPOs is not expected to be a common occurrence – during the passage of the Bill it was estimated that there may be about thirty applications a year. They are for use in very specific and carefully designed circumstances and are not an alternative to prosecution. Where a law enforcement authority wishes to consider the imposition of an SCPO in a particular case they should consult the relevant prosecuting authority at an early stage.

Data matching

Section 73 together with Schedule 7 of the 2007 Act provides for the Audit Commission, the Auditor General for Wales and the Controller and Auditor General for Northern Ireland to carry out data matching exercises or to arrange for another organisation to do this on their behalf.  Data matching is defined as the comparison of sets of data.  For example, taking two local authority payroll databases and matching them. Matches should not occur, but if they do, fraudulent activity may be highlighted. 

The Audit Commission may only conduct data matching exercises for the purpose of assisting in the prevention and detection of fraud. Such assistance may, but need not, form part of an audit. Data matching may not be used to identify patterns and trends in an individual’s characteristics which suggest nothing more than his potential to commit fraud in future. This is designed to prevent the Audit Commission from creating individual “profiles” of future fraudsters.

The Act also enables the Audit Commission to require the provision of information to conduct a data matching exercise. The bodies that may be required to provide data (including any officer or member of such a body) are those bodies subject to audit and English best value authorities (not subject to audit). A person who does not comply with a requirement of the Audit Commission under the Act is guilty of an offence. 

Where the Audit Commission think it appropriate, they may conduct a data matching exercise using data held by a body that may not be required to provide data. The Act provides that such a body may disclose data to the Audit Commission for those purposes. This could include central government departments and some private sector bodies such as mortgage providers. There is no compulsion on any of these bodies to take parting a data matching exercise.

The Secretary of State may extend by order the purposes of data matching exercises beyond fraud. The Secretary of State may also add by order to those bodies that may be required to provide the Audit Commission with data.

The Audit Commission may prescribe a scale of fees in respect of the data matching exercises it conducts. The Audit Commission must prepare and keep under review a code of data matching practice.

Detained cash investigations: use of production orders and warrants

Sections 75 to 77 of and Schedule 10 to the 2007 Act enables production orders and search and seizure warrants under Part 8 of POCA to be used for investigating the provenance or intended use of cash seized and detained under Chapter 3 of Part 5 of POCA. These investigation powers can be used for cash detained before 6th April.

The amendments to POCA made by these sections and Schedule create a new type of investigation, called a detained cash investigation. The purpose is to assist law enforcement agencies in the preparation of a case for forfeiting the cash before the magistrates’ court or, in Scotland, the sheriff. The existing safeguards for production orders and warrants apply equally to those sought for a detained cash investigation. 

The amendments in Schedule 10 to the 2007 Act makes further consequential amendments to POCA ad other legislation in relation to the creation of detained cash investigations. As for civil recovery investigations, in both England and Wales and Northern Ireland, applications in respect of cash detention investigations must be made to a judge of the High Court. In Scotland applications must be made to a sheriff. Similarly, in England, Wales and Northern Ireland, applications can be made by constables, officers of Her Majesty’s Revenue and Customs and suitably trained and accredited financial investigators. In Scotland, applications can be made by the Scottish Ministers.

The existing offences of prejudicing an investigation in section 342 of POCA are extended to include detained cash investigations. A person found guilty is liable to a term not exceeding six months or a fine or both on summary conviction, and a term not exceeding five years or a fine or both on conviction on indictment.

Extension of powers of accredited financial investigators

Sections 78 to 81 of, and Schedule 11 to, the 2007 Act extend the powers of accredited financial investigators (AFIs). An AFI is an investigator who has been trained and accredited by ARA or the National Policing Improvement Agency to have access to certain powers under POCA. They operate in England, Wales and Northern Ireland; there are no AFIs in Scotland.

Suitably accredited AFIs currently have access to the powers to apply for investigation orders and warrants under Part 8 of POCA and to apply for restraint orders in confiscation proceedings. The 2007 Act extends the available powers to:

• seizing property which is subject to a restraint order to prevent its removal from the country
• searching, seizing, detaining and seeking forfeiture of cash in summary proceedings
• executing a search and seizure warrant

Access to these powers is not automatic. All AFIs need to be separately trained and accredited by NPIA to allow them access to the new powers and the Home Office needs to make a statutory instrument (Order) to list them as having access to the new powers.

Section 81 of the 2007 Act creates an offence of assaulting, resisting or wilfully obstructing AFIs in the course of their duties. A person found guilty will be liable to a term of imprisonment not exceeding 51 weeks or a fine or both.

Powers of management receivers and enforcement receivers

Section 82 of the 2007 Act amends sections 49/197 and 51/199 of POCA as regards the powers of management and enforcement receivers in confiscation cases. These amendments apply to those receivers who are appointed by the courts in England and Wales and Northern Ireland. Under these amendments, receivers can be given powers by the court to sell or otherwise dispose of assets which are perishable or which ought to be disposed of before their value diminishes. This can be in advance of any person having an interest in the assets having has an opportunity to make representations. The aim is to protect the value of the assets.   

Civil recovery management receivers

Section 83 of the 2007 Act amends POCA to provide for a new type of receiver in civil recovery proceedings. His or her only function will be to manage property subject to a property freezing order. This is distinct from the current role of an interim receiver who has the additional roles of investigating the managed property and reporting findings to the authority taking the civil recovery action and to the court. The new management receiver will have no investigation function and so will have no influence on the progress or final outcome of the case, accordingly the role does not need to be independent and so can be performed by a member of staff of the enforcement authority that is pursuing the civil recovery case.

Powers for prosecutors to appear in cash recovery proceedings

Section 84 of the 2007 Act amends POCA and the Commissioners for Revenue and Customs Act 2005. It enables the Director of Public Prosecutions (or the Director of Public Prosecutions for Northern Ireland) to act for constables and the Director of Revenue and Customs Prosecutions to act for officers of HM Revenue and Customs in cash recovery proceedings in the magistrates' courts. In the case of the Director of Revenue and Customs Prosecutions, the Commissioners for Revenue and Customs Act 2005 is amended to allow designated staff who are not prosecutors and outside contractors to appear in these proceedings. Suitably trained and accredited AFIs are also included in these new provisions under amendments in Schedule 11 to the 2007 Act: they can be represented by the Director of Public Prosecutions (or the Director of Public Prosecutions for Northern Ireland).

Incidents involving serious violence: powers to stop and search

Section 60(1) of the Criminal Justice and Public Order Act 1994 sets out police powers to stop and search in anticipation of violence occurring. Clause 87 of the Serious Crime Act 2007 extends these powers to enable stop and search operations within a particular locality after an incident of violence has occurred.

The officer authorising the operation must be of or above the rank of inspector and, in the circumstances set out in the amendment made to section 60 by the Serious Crime Act, the authorisation may be given orally if it is not practicable to give written authorisation, but the officer must put this in writing as soon as practicable.  

The officer may designate any locality within his area as falling within the stop and search area, but must always make this – and the grounds and duration of the Section 60 procedure - clear when authorising the operation, whether this is done orally or in writing.

 

 

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