The UK’s law enforcement agencies have wide ranging powers under the Proceeds of Crime Act 2002 (POCA) to seize cash and valuable assets from individuals and organisations.
This seizure is normally justified on the grounds that the investigating authority suspects – but needs time to establish – that the assets in question are connected with criminal behaviour.
Cash and valuables secured in this way can be held for up to two years. They can then be permanently forfeited if the authority in question can convince a court that they are either the proceeds of crime or were intended for use in future unlawful conduct.
All of the above can happen without anyone being found guilty of (or indeed being prosecuted for) any particular criminal offence. It is an unfortunate fact that the UK’s law enforcement agencies have often abused their seizure powers under POCA.
Any individual whose assets are seized is advised to take immediate legal advice as the first 48 hours after seizure can often prove critical to securing the assets’ long-term protection.
There is no upper limit to the amount of money that can be seized under the Act. However, it must be more than £1,000 which the law enforcement agency must reasonably suspect to be the proceeds of crime or intended for use in criminal conduct.
Law enforcement agencies can seize jewellery, watches, art, vouchers and stamps valued greater than £1,000, if they reasonably suspect them to be the proceeds of crime or intended for use in criminal conduct.
They can also seize anything that they reasonably believe to be stolen property or evidence in relation to an offence. However different rules apply to this type of seizure.
It is not just the police who can exercise seizure powers under the Proceeds of Crime Act. Officers of HMRC, the NCA and the SFO, and accredited financial investigators can also seize cash and assets.
Accredited financial investigators can work for certain government departments such as BEIS, DEFRA and the Home Office, for agencies including the FCA, MHRA, and DVLA, for local authorities, and for certain other organisations such as the Royal Mail and Transport for London.
Law enforcement can detain cash and valuable assets for an initial period of up to 48 hours, excluding weekends and bank holidays. If the authority wishes to hold the assets for longer then it must apply to a magistrates’ court, which can authorise detention for up to six months.
After this period has expired, the authority, if it wishes, may keep re-applying to the court for further six-month extensions, up to a total period of two years. When this two-year deadline is reached the authority must either return the assets, or apply to the court for permanent forfeiture.
The police must keep seized cash securely until their first application to the court. After that point, it should be e banked at the first opportunity unless required as evidence. In circumstances where the cash needs to be forensically examined (e.g. for fingerprints, traces of drugs, or to record the serial numbers) then this must happen before the money is banked.
Law enforcement agencies are obliged to tell anyone from whom they have seized cash or assets what they have done. They should keep all relevant people informed about the time and place of any court application they may make for further cash detention, which must take place within 48 hours of seizure. Anyone who has notice of this application may attend the court and make representations.
After this first court application, all relevant people should be notified in advance of any further court applications, which will usually take place at six monthly intervals.
A person can apply to the court for the return of the seized assets or cash at any time during this process. However, it is usually sensible to wait for the law enforcement agency to conclude its investigation and make its application for forfeiture.
Anyone served with a forfeiture notice or application for forfeiture is obliged to respond to confirm that they oppose it. If no notice of opposition is received, then then the cash and assets may be forfeited automatically.
In order for an asset to be detained during the initial, two-year, period, the court must be satisfied that there are ‘reasonable grounds for suspecting’ that it is ‘recoverable property’ (i.e. that it represents the proceeds of crime) or that it was ‘intended to be used in unlawful conduct’, and that its continued detention is justified while further investigation or proceedings are carried out. This is a very low evidential threshold and is easily met in most cases.
To permanently forfeit assets the court must be satisfied ‘on the balance of probabilities’ (i.e. that it is more likely than not) that the cash is recoverable property or was intended for use in unlawful conduct. Law enforcement have the burden of proving this, but it is a much lower threshold than would apply in any criminal prosecution.
In deciding whether to grant a law enforcement agency’s application, the court can take any relevant evidence into account. Cash seizure and forfeiture proceedings are civil rather than criminal legal matters and as such the strict restrictions on the type of evidence that can been used in criminal proceedings do not apply.
The court will consider evidence provided by the law enforcement agency and will also hear representations from the person from whom the cash was seized, as well as anyone else who claims an interest in the cash.
Anyone from whom assets are seized is likely to be invited for interview by the investigating agency. Unlike an interview conducted under criminal law, however, a person cannot be compelled to attend. Anyone who finds themselves in this situation is advised to think strategically about how best to respond.
Any explanation of the asset’s provenance provided to the law enforcement agency – either in interview or otherwise – will be considered by the court when it determines whether or not to permit further seizure or forfeiture. The key issue for the court to decide will be whether the explanation provided is more or less probable than that advanced by the law enforcement agency. The court will pay close attention to inconsistencies between an explanation and the other evidence, such as bank records, which may explain where it came from.
Anyone who finds themselves caught up in a cash seizure issue is strongly advised to seek expert legal opinion on how best to proceed, and especially before agreeing to be interviewed. Depending on the circumstances, a forensic accountant may be needed to help provide detailed analysis of the available financial records.
Hickman & Rose have a wealth of experience resisting applications for detention and for forfeiture.
We have created robust legal strategies to achieve the return of seized money. We have also negotiated with law enforcement to reach an acceptable compromise without the cost and disruption of a trial wherever possible.
Most cash seizures do not occur in a vacuum. Often there is a criminal investigation running in parallel.
As such the recipient of a cash seizure notice may have been arrested, invited to attend an interview under caution or charged with a criminal offence. Law enforcement may also have taken other steps in relation to the assets such as applying for an Account Freezing Order, a Restraint Order or an Unexplained Wealth Order.
Hickman & Rose’s criminal, regulatory and civil law experts have long experience in all these matters and efficiently work together to ensure a strategic consistency of approach, which prioritises the client’s ultimate goals over any one discrete issue.