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THE PROCEEDS OF CRIME ACT 2002 & FINANCIAL P&S Doc 9.1 V1 Sep
INVESTIGATIONS 10
1. PURPOSE
The aim of this document is to provide both Investigators and Accredited Financial
Investigators within Royal Mail Group Ltd, with clear guidance on the procedure to be
adopted to ensuze that the recovery of business assets are maximised by exploiting
the opportunities available through the Proceeds of Crime Act 2002 (POCA 2002) and
Financial Investigations.
2. CONTENTS
Section 3 Introduction
Section 4 General & Terminology
Section 5 Confiscation Investigations
Section 6 Money Laundering Investigations
Section 7 Investigation Powers Under POCA 2002
Section 8 Restraint Orders
3. INTRODUCTION
3.1 The recovery of assets from criminals is of paramount importance to Royal Mail
Group Ltd. This not only increases the deterrent effect of committing
acquisitive crime it also makes complete commercial sense. Accordingly
Investigators must ensure that whenever possible offenders repay the value of
any benefit acquired as a result of their criminality. To ensure that the
benefit of crime is removed from offenders Investigators must be aware of the
Proceeds of Crime Act 2002, (POCA 2002) and understand when the provisions of
the Act should be utilised, as this is the legislation which gives powers to
investigate, restrain and confiscate criminal assets. POCA 2002 also defines
Money Laundering offences. (POCA 2002 drew together several pieces of
legislation dealing with the proceeds of crime and the recovery of criminal
assets into one definitive Act).
3.2 POCA 2002 is made up of 12 “Parts” detailing the different aspects of
financial investigation and the recovery of criminal assets. Part 6 deals
with Confiscation, (see Section 5 below). Part 7 deals with Money Laundering
and details 3 main money laundering offences, (See Section 6 below). These
offences can be investigated by Investigators and Accredited Financial
Investigators, (AFI) alike. Part 8 deals with Investigation Powers, such as
Production Orders, (see Section 7 below). In RMG Ltd these powers can only be
exercised by an AFI and only when the “predominant purpose” and “predicate
offence” is to further either a Confiscation or Money Laundering
Investigation.
3.3. Advice on financial investigations can be obtained from the Financial
Investigation Unit (FIU) on 0207 881 4339; however such advice must always be
sought where there is a loss to the business, or personal benefit to a suspect
offender, exceeding £5,000 in value. Dependant on the AFI workloads and
priorities a linked financial investigation may be instigated. However, the
physical analysis of rmation obtained by the AFI through POCA 2002 Orders
may have to be undertaken by the Investigator In the Case. In normal
circumstances the investigation should have reached the stage where a specific
suspect, or manageable number suspects, has been established.
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4. GENERAL & TERMINOLOGY
4.1 Obtaining Financial Intelligence/Evidence. In order to progress a financial
case against a suspect, financial information have to be obtained.
are ways of obtaining such information.
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1. Authority from the Subject. If the subject is aware of the investigation
they should be asked to provide authority for one, or both, of the
following as applicable;
a. Authority for Disclosure of I
Gs045.
b. Authority to Disclose Data Form GS212.
2. Data Protection Act 1998. Some institutions may disclose financial
information on receipt of a data protection request, which can be found on
the Electronic Intelligence Gathering Form GS208.
3. Bankers Books Evidence Act 1879. ‘The Criminal Law Team (CLT) can make an
application to a court for an order under this section. However, this Act
will only give access to the Bankers’ “Book” which is the bank statements.
4. Production Orders. Production Orders are available as long as certain
conditions are met. Generally this requires that all other methods of
obtaining the material have been tried without success or have not been
tried because it appeared they were bound to fail. Two types of
Production Order are available, they aze;
a. POCA 2002 following an application by AFI if they are conducting a
Confiscation or Money Laundering Investigation
b. PACE 1984 following an application by a Constable if they have
reasonable grounds to believe an indictable offence has been
committed.
However, prior to making an application the “Predominate Purpose” and
“Predicate Offence” test should be applied. Advice on applications for
Production Orders must be sought from an AFI or the CLT.
mation (Financial Institution) Form
4.2 Predominant Purpose. Prior to an AFI obtaining an order under POCA 2002 the
AFI is required to apply the “predominant purpose” test. This means that any
Production Order application should relate to the predominant purpose for
which the material is required. If predominant purpose for which the material
is required to further;
1. A Confiscation Investigation into the defendants benefit from crime, or,
2. A Money Laundering Investigation where there is suspicion or evidence of
money laundering.
Then the AFI will be able to apply to the Court for Production Orders under
POCA 2002. However, if the predominant purpose for which the material is
required is to prove another “predicate offence” such, as an acquisitive
crime, like theft or fraud, then a PACE Production Order may be appropriate.
Again PACE Production Orders can only be obtained by Constables.
4.3 Confiscation Investigation. A confiscation investigation is an investigation
to see whether someone has benefited from criminal conduct and, if so, the
extent and whereabouts of that benefit.
4.4 Criminal Conduct. Criminal conduct is conduct which constitutes an offence in
any part of the UK or if it occurred elsewhere, would constitute an offence, if
it is an offence in that jurisdiction at the time and in any part of the UK.
4.5 Particular Criminal Conduct - refers to offences that the defendant has been
convicted of in the current proceedings and any other offences taken into
consideration when deciding an offender’s sentence.
4.6 General Criminal Conduct - means the defendants entire criminal conduct,
whenever the conduct occurred and therefore includes “Particular Criminal
Conduct’. General Criminal Conduct depends on the concept of ‘criminal
lifestyle’, which is based on the principle that an offender who gives
reasonable grounds to believe that they are living off the proceeds of crime
should be required to show that their assets have been obtained lawfully and,
if they cannot, should have them confiscated.
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4.7 Criminal Lifestyle Is defined in POCA 2002 but the aspects relevant to Royal
Mail Investigators are; a person has a criminal lifestyle if the offence (or
any offence) concerned is:
1. An offence specified in schedule 2 of the Act which includes, money
laundering offences under 327 (concealing) and 328 (arrangements) ,but
not 329 (use & possession), or
2. An offence committed over a period of at least six months, and the total
benefit is not less than £5,000
3. Conduct forming part of a course of Criminal Activity
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4.9 Criminal Activity. The test for a course of criminal activity is; has the
defendant;
1. Been convicted of four
which he has benefited
2. Got at least two previous acquisition convictions on separate occasions,
within 6 years of the most recent proceedings, for offences from which he
has benefited and
3. The offender’s total benefit is not less that £5,000.
offences on the same occasion, all of
4.10 If the court decides that the defendant has a criminal lifestyle, it must make
four assumptions in order to establish their benefit from crime, the four
assumptions are;
1. Any property held by the defendant at any time since conviction was
obtained by him as a result of his general criminal conduct.
2. Any property transferred to the defendant after the relevant day was
obtained as a result of general criminal conduct.
3. Any expenditure incurred by the defendant at any time after the relevant
day was met from property obtained as a result of his general criminal
conduct.
4. Any property obtained by the defendant was free of any other interest in
it.
The assumptions will not be used however if they are shown to be incorrect or
there would be a serious risk of injustice if they were made.
4.11 Money Laundering. Money Laundering is the procedure by which criminals try to
hide the origin of the proceeds of their crimes, making it look as if those
proceeds were acquired legitimately. In doing so, criminal property obtained
unlawfully is turned into property or money that can be accessed via legitimate
methods without arousing suspicion.
4.12 Criminal Property. Property is ¢
1. The property (in whole or in part, directly or indirectly) constitutes a
person’s benefit from criminal conduct; and
2. The alleged offender knows or suspects that the property constitutes or
represents such benefit. (It does not matter who carried out the criminal
conduct or who benefited from it).
inal property
4.13 Money Laundering Investigation. A Money Laundering Investigation is simply an
investigation to see whether someone has committed a money laundering offence.
The Money laundering offences are detailed in Paragraph 6.2 below.
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5. CONFISCATION INVESTIGATION
5.1 Part 2 of POCA Confiscation. Confiscation is the cedure used by the courts
to take away the proceeds of an individual’s criminal activity. The trigger
that sets this procedure in motion is where a defendant is convicted or
committed for sentence in a Crown Court for a criminal offence (or offences)
from which the defendant has benefited. If no benefit has been obtained then
confiscation does not apply. Confiscation Proceedings can only be instigated
if the Prosecutor asks the Court to proceed (the Prosecutor in our cases is the
Criminal Law Team) or if the Court believes that it is appropriate to do so.
5.2 IU Rationale for instigating a Confiscation Investigation. It is expected
that a Confiscation Investigation will be initiated where:
1. There are reasonable grounds to believe that a person has benefitted
from criminal conduct oz,
2. It is thought that the defendant has been or will be convicted or
committed for sentence in a Crown Court for a criminal offence(s) from
which the defendant has benefited and,
3. There is a provable loss to the business, or personal benefit to a
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suspect offender exceeding £5,000 in value, and
4. There are indications that the defendant has assets that could be used
to service any future Confiscation Order.
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5.3 FIU Confiscation Investigation Process. The FI will undertake the following
process in order to ensure appropriate confiscation is pursued;
1. Discuss case with the Criminal Law Team (CLT) to agree that Confiscation
s appropriate.
is expected that the defence Solicitor will liaise on behalf of
defendant, who may wish to repay the loss to avoid Confiscation
Proceedings. Restraint Orders may be varied by consent if agreed by all
parties. If the loss is repaid consideration should be given as to
whether con cation should be aborted. (The issue of whether extended
benefit is likely to be identified within financial investigation must be
discussed) .
3. Consider serving a Section 18 “Request for Information” on the defendant,
either within a Restraint Order or upon conviction in the Crown Court.
4. Ensure that any processes required by the POCA 2002 timetable are
complied with.
5. Analyse any response to the Section 18 request and compare it with
information already known.
6. Consider the need for any further financial information and pursue
appropriate courses of action.
Decide whether the defendant has benefited from their “Particular” or
“General’ criminal conduct.
8. Prepare appropriate Prosecutors Statement of Information (Section 16(3)
for general criminal conduct or Section 16(5) for particular criminal
conduct).
9. Apply the assumptions within the prosecution statement, where
appropriate, and record figures detailing the defendant’s benefit from
crime, recoverable and available amounts.
2.
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10. Apply the Retail Price Index increase in value of money on
defendants benefit from crime figure.
11. If the defence respond to the Section 16 statement, prepare a
Section 16(6) response if necessary.
12. Prepare confiscation forms, 505 & 505a, Compensation Order and
discharge of restraint (where applicable)
13. Attend court with confiscation forms on day of Confiscation Hearing
with good knowledge of the information contained within Prosecution
Statement.
14. Update Events Log, Policy Log and Document Schedule throughout this
process.
15. When Confiscation Order is set, update Joint Asset Recovery
Database (JARD) with details of the order and liaise with Regional Asset
Recovery Team (RART) as to the e rcement of the ord
16. Complete FI case closure form and forward to all stakeholders.
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6. MONEY LAUNDERING INVESTIGATIONS
6.1 Part 7 of POCA 2002. Part 7 deals with money laundering. Any Investigator can
conduct a Money Laundering Investigation and Investigators should be aware of
the principle money laundering offences during suspect interviews. Assistance
can be obtained from an AFI as it is accepted that an Investigator will need to
involve one if they wish to obtain evidence or information through the
“Investigation Powers” av: able in Part 8 of POCA 2002. These Powers are
detailed in Section 7 below.
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6.2 Principle Money Laundering Offences. The principle money laundering offences
can be found in under sections 327, 328 and 329 of POCA 2002. ‘They are as
follows:
1. Section 327 - A person commits an offence if they conceal, or disguise, or
convert, or transfer, or remove criminal property from England, Wales,
Scotland or Northern Ireland.
2. Section 328 - A person commits an offence if he enters into or becomes
concerned in an arrangement, which he knows or suspects facilitates (by
whatever means) the acquisition, retention, use or control of criminal
property by or on behalf of another person.
3. Section 329 - A person commits an offence if they acquire, use or possess
criminal property.
It should be noted that the language used in the money laundering offences has
been left deliberately wide to ensure all money laundering activity is covered
by the legislation.
6.3 I Defences to Money Laundering. As with most legislation there are statutory
defences within the Act. A person does not commit a money laundering offence
if they;
1. Made an authorised disclosure under section 338. (This in the main
pertains to people working in financial institutions who are obliged to
disclose suspicious activity in the form of Suspicious Activity Reports
(SAR) ) -
2. Intended to make such a disclosure but had a reasonable excuse for not
doing so.
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3. Committed the act in carrying out a function relating to the enforcement
of any provision of POCA 2002 or any other enactment relating to criminal
conduct or benefit from criminal conduct. (This section protects
Investigators acting in a law enforcement capacity when dealing with
criminal property)
4. Acquired, or used, or had position of criminal property for adequate
consideration. (This only applies to Section 329 above)
6.4 FIU Rationale for Conducting Money Laundering Investigations. The FI will
consider the following before commencing a money laundering investigation;
1. Is there reasonable suspicion or evidence to suspect a money laundering
offence?
2. Which money laundering offence(s) has or may have been committed and by
whom?
3. Would the investigation be consistent with human rights legislation,
(Proportionate, Legal, Accountable and Necessary)?
4. Has advice, where appropriate, been sought from a Senior Appropriate
Officer (SAO) or the Criminal Law Team?
6.5 FIU Money Laundering Investigation Process. The FI will undertake the
following process, as relevant, when undertaking a Money Laundering
Investigation;
On receipt of the initial reports and relevant documentation from the
Investigator assess the crime(s) committed and decided whether an
investigation into money laundering is appropriate.
2. Discuss the case with the Investigator and determine if any person other
than the suspect has been involved in assisting in the money laundering
process and decide on the future conduct of the case.
3. Ensure that full enquiries and background checks have been undertaken as
appropriate. Such checks will include Equifax, vehicles owned, property
owned or leased, businesses or companies owned, Voters Register, HMRC and
open source internet enquiries.
4. If appropriate Pre Production Order enquiries with organisations, such as
the bank, building society, Solicitors or Accountants will be undertaken.
5. Discuss case with a Senior Authori g Officer (SAO) and if relevant the
CLT, to seek agreement for any application(s)
6. Make applications to the Court for Restraint/Investigation Orders where
relevant. During this stage establish details of accounts held or other
relevant information, confirm the ie required for documents to be made
available and whether the organisation wishes to attend court or be sent a
copy of the information statement in support of the application.
7. Examine any documentation received as a result of the orders to seek
evidence of money laundering and the whereabouts of any of proceeds of the
original offences.
8. Prepare schedules/statements as applicable for future court hearing.
9. Update Events log, Policy log and Document Schedule throughout this
process.
10. Where evidence of money laundering exists (or has been found duzing
enquiries), ensure that money laundering charges are discussed with the
Investigator prior to the submission of the case file, so that the correct
charges are advised by the CLT
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7. INVESTIGATION POWERS UNDER POCA
7.1 Part 8 of POCA 2002. This gives an AFI Powers to obtain financial information
which includes all types of information connected to money, assets, expenditure
and finance of any kind. This information is present in almost every aspect of
a person's (their home, work and plans, both present and future). Non-
cash based methods of dealing with money and assets such as credit and store
loyalty cards also generate financial information. Investigators can analyse
this information to obtain further material to assist the investigation.
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7.2 Investigation Powers. The main powers available to an AFI under POCA 2002 ar
1. Section 345 - Production Orders. These require organisations or
individuals to produce material to the AFI
2. Section 352 - Search and Seizure Warrants. This is normally granted if a
Production Order has not been complied with or is likely to be
ineffective.
3. Section 363 - Customer Information Orders. A Customer Information Order
requires Financial Institutions to identify any account held by the person
or organisation under investigation and to provide specified information
about that customer. Applications for Customer Information Orders may
only be made by an AFI with authority from a Senior Appropriate Officer.
4. Section 370 - Account Monitoring Orders. An Account Monitoring Order
(AMO) is an order requiring Banks and other Financial Institutions to
provide live intelligence on a suspected bank account(s) for up to 90
days, at any one time, from the date of the order. (Repeat orders can be
obtained if necessary)
7.3. Applications for any of the Investigation Orders can be made at any stage of
the Confiscation or
Money Laundering Investigation as long as the predominant purpose test is met.
Further details including the full conditions imposed on obtaining POCA 2002
Investigation Orders can be found in Appendix 1 to these Procedures and
Standards
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8. RESTRAINT ORDERS
8.1 Restraint Orders can only be obtained by AFI and the Prosecutor (CLT) and can
be obtained by them at any stage after the commencement of an investigation.
(The power to obtain a Restraint Order before the start of prosecution
proceedings is new). Restraint is the procedure used by the Courts to prevent
an individual(s) or companies from dissipating, disposing of, dealing with, or
diminishing the value of any of his/her or their assets, be they derived from
criminal activity or otherwise and to hold those assets in anticipation of any
future Confiscation Hearing and hence satisfy any Confiscation Order.
8.2 The amount of realisable property that can be restrained can depend on the
defendant’s alleged benefit from crime. If the defendant has a criminal
lifestyle and has therefore benefited from general criminal conduct, the
defendant can be restrained from dealing with any and of their assets.
Alternatively, restraint may be limited to benefit from the defendant’s
particular criminal conduct only. The underlying principle is that, before
applying for an order, there must be a real and current risk that, without a
Restraint Order, assets may be dissipated by the defendant.
8.3 A Restraint Order will not always be appropriate. Decisions about whether or
not to apply for an Order, or the timing of an application, are of strategic
importance to a case and should only be taken after careful consideration of
the potential effect at both the investigation and prosecution stages. Exactly
what is and is not restrained is determined by the FIU with the agreement of a
Senior Authorising Officer and the CLT. It is an intrusive power and should
not be used lightly.
int Orders normally make provision for;
1. Reasonable living expenses
2. Reasonable legal expenses’, or
3. Enabling a person to carry on any trade, business, profession or
occupation.
Reasonable living expenses’ is not clearly defined. Current guidelines (based
on Social Security figures) allow for ‘reasonable living expenses’ to be set at
around £250 per week. It is for the defendant to argue this to the
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satisfaction of the Court.
8.5 Following a successful Restraint application there is a requirement to
continually monitor and/or administer a defendant’s requirement for day-to-day
living expenses. RML case loads prevent FIU capacity to deal with the
requirements of fully restraining a defendant’s assets and as such only
“limited” restraint would normally be practiced.
8.6 IU Rationale for Restraint. The FI will consider the following before
commencing Restraint Proceedings;
1. Are there reasonable grounds for suspecting that the person has benefited
from their criminal conduct?
A criminal investigation has been started with regard to an offence,
And there is a real risk that the asset will be dissipated if a Restraint
Order is not obtained
2.
3.
8.7 FIU Restraint Process The FI will undertake the following process when
undertaking Restraint Proceedings;
1. Assess crime and potential recovery strategies.
2. Collate and assess information on assets.
3. Assess potential for dissipation of assets. Is offender likely to
dissipate assets? What is the rational for this consideration?
4. Complete restraint risk assessment. Is any application for restraint
consistent with Human Rights legislation (is it necessary, legal,
justifiable and proportionate) ?
5. Discuss case with CLT and obtains agreement to restrain.
6. Obtains consent to restrain from SAO. SAO completes record of
authorisation.
7. Prepare the “Witness Statement in Support of an Application for a
Restraint Order” and the actual Restr. ing Order.
8. Forward the Witness Statement and the Restraining Order to the SAO and
CLT Authorising Lawyer
9. Make arrangements with Court and submits papers day prior to hearing.
10. Attend court to relay evidence and obtain the ‘Restraint Order’.
11. Restraint Order is granted, copies to be served on the subject
of the order and all interested Financial Institutions as soon as
practicable.
12. Update Events log, Policy log and Document Schedule throughout this
process.
13. Update the Joint Asset Recovery Database (JARD).
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