Confiscation Of The Proceeds Of Crime

CONFISCATION OF THE PROCEEDS OF CRIME

METHOD

Introduction

My interest in the criminal justice system prompted me to study this area. For along time now I have developed interest in the area of how the legal system ensure that criminals don’t use the proceeds of crime to fund other criminal activities. I had more interest in studying this area because it gave me a chance to study an array of research materials that would enhance my understanding of law.

This area interests me because I have a friend who has been working in the law court and I have been pestering him with many questions on the issue of confiscation of proceeds from crime. I thought that if I undertook a project on researching on this issue, I would get more knowledge on the area and my friend could be of help to me as well.

My interest in this area is also prompted by the earlier studies I have had on the issue of law. In particular I decided to study this area in order to be able to relate the law and its application. This has been an effectful way of applying all the principle of law that I have learned and also in understanding how they are applied in the real practice. In a broader sense, this topic of study help me to relate how the law of our country has evolved with time to suit international laws and convention in an effort to act as a global player. This is important since it helps me to explore the history of our constitution.

Redefining the scope

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This project is too wide and I found the need to narrow down to the recent legislations that have been put in place in the recent past. I found the topic wide covering various subjects over a long time and I had to focus on particular issues in order to carry out a comprehensive research. To define the scope of my work, I had to look into different changes that have occurred in this area and look to one specific area of focus. After looking at closely on the issue of proceeding of crime and provision in the law, I decided to study how this has evolved in our country and the reason that have led to the change in this law. Partially I found the issue of setting up of Asset Recovery Agency as one of the most important step that our country has taken. Hence I decided to look on a timeline in which this has evolved.

Research terms

In my study I had completed research on laws that have been enacted to curb drug trafficking and money laundering. The issue of confiscation of proceeds from crime came out strongly in my research. The list below is a list of terms that I have used in the exercise:

(i) Border categories of the major words

Proceeds from crime, drug trafficking, money laundering

(ii) Narrower categories

Law, international law, enactment

(ii) Synonyms

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Law, legislation, enactments

(iii) Closely related words

Proceeds from crime, property, Asses

(iv) Related procedural terms

Law reforms, enactment of the law, seizure of property, recover of criminal proceedings

(v) Related Agencies

The courts, Assets Recovery Agency, the Parliament

The above terms were used while conducting research on the topic from various sources. The university library and the internet were most useful in the search. Most of the information was sourced from the electronic database. Also a variety of research journals and various books were also use in searching for the information. The electronic sources were particularly helpful in the research. Electronic resources helped me to access most of the information which I could not get from the library catalogue and which was necessary for the research. In particular online sources helped me to compare the perspective of different scholars who have studied the topic.

Looking back at history the issue of confiscation of proceeds of crime, it has been practiced in several traditional societies but it gained momentum with the coming of capitalist in the world. History portrays the justice with which the traditional society was administered with and it is the

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coming of modernization and the embracement of capitalist which brought about all the differences in the process of criminal justice administration.

Hence in order to be more focused on the topic I decided to look closely at the changes that have taken place in our country since 1980 when there was increased awareness of the need to have new legislation in place to recover proceedings from crime.

Sources

I found that I had many new sources which could be used for the study. One would expect me to have aspect a lot of time digging deep into law journal of the land but I decided to be focused more on the recent legislation that have been put in place since 1980s. In particle I decided to keep my focus more on the applicability of the law and how it has changed over time in relation to the changes in crime world. However my friend John also helped me also with interviews as he helped to understand most of the concepts of the law and create a relation between different legislations. My friend John also provided me with copies of the necessary acts hence it was easy for me to go through them without spending most of my time on the internet or in the library. My choice of topic and resource materials made it easy for me to gather the necessary information fast.

In order to understand the topic well, I understood that I had to consult more resources. This enabled me to get detailed information and analysis from different sources. Having read from variety of sources, it was easy for me to make a conclusion on the issue.

I have to acknowledge the input of my friend who has helped me to understand this topic in detail. John who have worked in the court for more than 10 years have a lot of experience and understanding of law and how it has been applied. He has guided me on the way that I should follow in carrying out my research. He simplified my work since he told me all the relevance

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sources that I could get the necessary information. But this did not slow down my research work. I focused more on electronic database to back up all the sources that john had proposed to me.

My research led me to the internet where I had to look for some to the international conventions like the United Nation’s Convention in Vienna and the European Common conventions. This also helped me to get a lot of other materials which I used for the research. The reference to these sources helped me understand in detail how the international community has tried to work together in a bid to solve some of the problems that the world is facing.

I find that my topic is different from that of other students in many aspect this is because unlike other students who would be interested on the provision of the constitution, I have focused more on how the provisions of out constitution have evolved over time in line with the changing world of crime and the needs of the international community.

Writing up

The way I have decided to write up my project is also different from others. This is because I have focused more on explained points on why our laws have been changed rather that how it has been changed. I have also expressed my points clearly in a timeline which makes it easy to follow it from the start to the end. My model can be useful to other students if they need to write a coherence topic with flow which guides the reader from initial problem to be addressed, to how the problem had been addressed using different legislation and where the problem stands now.

Time scale

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A write-up for this project has taken me approximately two working days in the last two weeks. But my interest in the topic has been for years since I first developed love for law and how it worked. Perhaps my first initial interest in the topic is when I read about how drug lords in the United State like Pablo and others wielded power and wealth enough to put up a resistance to overthrow a government in other countries. I started wondering why the law courts in their countries failed to confiscate the proceeding from their drug activities. Hence I can actually say that my research on the topic has been long.

STATEMENT OF THE LAW

Introduction

This is the second part of the project. It deals with the reforms hat have taken place in the UK since 1980s which have all been aimed at bringing in some controls in confiscation of proceeds of crime. This part looks at historical enactments that have been made in the law of UK since 1980s and in the international front which have been aimed at coordination efforts by countries in the fight against money laundering and drug trafficking. This section will systematically looks at the way the country has responded to the need by the international community to enact these laws an how the parliament has made amendments in the laws to suit the changing needs to fight crimes. (Jonathan, 2002; William, 2002)

The load to confiscation reforms

The earlier laws on confiscation can be traced to the Drug Trafficking Offences Act of 1986 (DTOA). This act created criminal liabilities for not reporting suspecting laundering proceeds which were gained from criminal activities. This act also permitted the confiscation of asset and other properties including all benefits which could have been derived from drug trafficking activities. This was the first effort that the country made toward confiscation of proceeding from crime. There was similar legislation that was made in Scotland in 1987 with the enactment of Criminal Justice Act (Scotland) 1987. However one of the failure of these acted is that they did not provided for an international way of fighting these crimes. (Richards, 1999; Andelman, 1999)

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The first intention interview to curb drug trafficking and proceed of crime came with the enactment of United Nation Convention against Illicit Traffics in Narcotic Drugs and Psychotropic Substances 1988 in Vienna. This was ratified by 125 countries and required member countries to “legislate as necessary in order to establish a modern code of criminal offences relating to illicit trafficking in all its different aspects”. Having signed to the accord, the UK had to make legislations as well which reflected its will and commitment to fight the issue of drug trafficking and money laundering. One of the provisions of the convection was that it remained a criminal offense to acquire property that was known to have been derived from drug trafficking related activities. It as also sought to remain an offence any concealation of such properties to another property or hiding the true nature of the property. All the countries which signed the convection were also required to make it possible to confiscate the proceed of drug trafficking and although there were stringent bank secrecy rules which hindered the implementation of this agreement. There was need for all those who signed to the accord to make necessary provisions in their legislation in order to enable the implementation of this agreement. (Proceed or crime update, 2005).

The earlier legislation in the UK had provisions for this. The DTOA had enough provision which conformed to this requirement but there were need to put more powers on the court to effect confiscation of such proceedings. This led to the enactment of The Criminal Justice Act 1988 (CJA 1988). This act had more provisions for the country to fight drug trafficking and money laundering in support to the DTOA and the United Nations agreement. This act also went further and gave the courts the power to confiscate properties which were obtained from non-drug relating offences. (OPSI, 1988)

The act proved for confiscation ordered in Part VI section 71 which provide that,

“The crown Court and a magistrate court shall each have power, in addition to dealing with an offender in any other way, to make an order under this section requiring him to pay such sum as the court thinks fit”

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Subsection 2 clarifies that, “the crown court may make such an order against an offence where

– “he is found guilty of any offense to which this part of the act applies, and he has benefit from on offence”

Among important provisions of this act was that of extradiction. It also amended the rule to evidence in criminal proceeding, to provide of the reference by the attorney General on certain questions among other provisions which were all aimed toward fighting trafficking of drug and money laundering. This act gave the court more power over confiscation.

However it was still found not enough to fight these two offenses and drug Lords continued to fund the criminal activities using the proceeds from their criminal activities. Several amendments to acts were made in a bid to enforce rules on money laundering and drug trafficking. The Prevention of Terrorism Act (1989) was put in place after it was presumed that proceeds from criminal activities was being used to fund terrorism activities in the world. This act introduced new offence for providing funding and financial support to terrorists. This act had a more worldwide appeal in that it provided for dealing with terrorism activities committed anywhere in the world and not only in the UK. (OPSI, 1990)

The Criminal Justice Act of 1993 provided more on the confiscation orders. Part III section 27 acts to amend the provision of Criminal Justice Act 1988 to include more offense in relation to the confiscation orders. Section 29 of the act makes it an offence to assist another person to retain benefit of criminal conduct

More legislative provision on proceeds of crime was made in the Proceeds of Crime Act 1995 in chapter 11. This act made further provisions in relation to recovery of the proceeds of crime. It also made provision on forfeiture of oversee crimes and restraint orders.

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But all the provision of these acts was consolidate in the Proceed from Act 2002. This act provided for the establishment of Property Recovery Agency which was given the mandate to recover all assets suspected to have been acquired through crime.

Part 2 section 6 has provision for making of order. Sub section 1 provides that “The crown Court must proceed under this section if the flows in two conditions are satisfied”. The two conditions are provided under subsection 2 as

“He is convicted of an offence or offences in proceeding before the Crown Court or he is committed to the crown court in respect of an offence”.

Subsection 5 provides that

“If the court decides that the defendant has benefited from the conduct refereed to it must-decides the recoverable amount and makes an order requiring him to pay that amount”

Part one of the Act provides for the formation of Asst Recovery Agency. Section 1(1) provides that

“There shall be an Assets Recovery Agency”.

This agency is given the mandate to oversee confiscation of all proceeds from crime. The enactment of this law in 2003 marks the long struggle fro the country to acquire a body that is responsible for confiscation proceeds for crime.

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Story of the reforms

Introduction

The history of the world is awash with crime reports and this is not a new phenomenon. However the nature of crime has continued to evolve in many ways and the crime of yesterday is not the crime to today. In the recent past and since the end of Second World War, there have been marked emergences of new forms of crimes which have taken an international dimension. The issues of drug trafficking and money laundering is not new but the dimension it has taken is what worries us. In the 1980s there was marked increase in trafficking of drugs and money laundering in the UK which saw the emergence of wealth drug lords. It was persuaded the proceeding from these crimes could have been responsible for financing of other crimes. Hence the issue of money laundering and drug trafficking in the UK was one of the main reasons which led to the enactment of acts supporting the confiscation of proceeds from crime.

For a long time money laundering and drug trafficking were not regarded as crimes. But we can understand since by then the world was loosely organized and it was easy to transport drugs from one area to another. Although we understood the effects the drugs had on the people there was little effort by the community to report those who were convicted of having been involved with the activities. Hence the first step that the law could have taken was to instill a sense of responsibility on the people in order to ensure that they assumed more responsibility. This was achieved through the enactment to the Drug Trafficking Offence Act of 1986. This act served many purposes. One, it created a potential criminal liability for not reporting suspicions of drug trafficking activities. In a way, this was aimed at instilling a sense of responsibility to the community to make it more responsible for what was happening in the surroundings. This was an important provision since the community was wholly responsible for what was happening. The government realized that it cannot step up a fight against these vices alone and hence there was need to collaborate with the community.

This act also made the first step towards creating a confiscation for drug trafficking. The

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authority had realized that it would still be difficult to fight drug trafficking if it did not find ways of confiscation the proceeds of these criminal activities. This was perhaps the first step the UK had made in confiscation of proceeds from criminal activities. But drug trafficking had grown to be an international business and hence this act alone was not sufficient to put up an effectful fight against drug trafficking.

The United Nations made a bold move an in 1988 came up with United Nations Convention against Illicit Traffic in Narcotics which was convened in Vienna. This was the first international effort to try and act on the issue of drug trafficking. This convention was ratified by 125 countries including the UK. It had many provisions that were supposed to be fulfilled by the countries which signed the convention. It required member counties to put in place provisions which made it an offence to be knowingly invade in drug related property. This was already providing in the above mentioned Act in the UK. The convention also required all the relevant bodies to be able to make it possible for countries to review bank details of those who were suspected of having committed drug trafficking offence. This was a great move in light of the existing bank secrecy laws. These laws were considered by the courts as one of the big stumble in the effort of confiscating proceeds from crime. It also required member countries to make it possible to confiscate the proceeds from drug trafficking. Although the UK had such provision in the Drug Trafficking Offence Act of 1986, it required to be given more power to make it easy to confiscate proceeding from crime.

Hence we can say that the pressure from the international community was another force that led to the enactment of strict laws on confiscation of proceeds of crime. The fact that UK became signed to the provision of the UN’s Vienna convention on illicit drugs put more pressure on the law makers to ensure that they put in place stricter laws to deal with the issue of drug trafficking. There was need for the UK to play a role in the international community to ensure that the issue of drug trafficking was dealt with properly. (Rider, 1999)

The UK had put in place laws which provided for the above provisions. However there was need for the country to put more power on confiscation laws. In 1988 The Criminal Justice Act (CJA 1988) was enacted. This act gave the judiciary more power on confiscation as it went on to include proceeds from other non-drug related offences. This was the first time in the history to the UK when the court was given authority to confiscate properties and assets which were proved to be acquired unlawfully but not from drug trafficking. In this regard acts like money

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laundering which were very rampant during this time were also covered. This act gave more power to the customs officer and constables in that they had the power to “detain any cash which is being imported from the United Kingdom”. Customs officers were given the power to seize the cash if it is suspected of having originated from an act of crime. This act had an effect in that it made it possible for the authority to intercept and confiscate the proceeds of crime and not only proceeds from drug related activities.

But the fight for establishment of an effective way to curb criminal activities was stepped up further with the enactment of The Prevention of Terrorism Act 1989. This act was put in place due to the increasing incident of crime in the UK and in other countries of the world. It was presumed that the proceeds from these crimes were being used to fund terrorisms activities and hence there was need to put strict laws on funding of terrorism activity. The enactment of this law was meant to track down the way in which proceeds from crime activities was dealt with. This act made it an offence of someone to provide assistance to terrorism. There was a possibility that most of the drug lords could have used terrorism activities in order to diverge the attention of the authority from their activities. Hence this legislation was aimed at helping the authority to track down the way in which proceeds of crime were being used. This act also had a more world appeal in a bid curb all terrorist activities committed not only in the UK but also in other parts of the world. There was need for the UK to come up with such a legislation to be used in the issue of drug trafficking had become an international issue. This act provided means for the authority to look into the way proceeds of crime could be used to fund terrorist activities.

Although there were much efforts aimed at fighting crimes, there was still an increase in the number of crimes. This stimulated the government to come up with more strict rules which could help the country to deal with criminal activities especially in confiscating proceeds from crime. In 1990, there was The Council of Europe Convention on Laundering, Search, Seizure and Confiscation from the Proceeds of Crime. For along time Switzerland which is considered as the hub of banking for illegal money in the world was brought under the Vienna convention during this Council of Europe convention. This convention worked up to tighten the aspect of the Vienna convention in that it brought more countries to the convention and provided strict requirement for members who signed to this convention. This convention required the state to create a criminal offense of internal money laundering from the proceeds of drugs and other crimes. This convention was also instrumental in setting up measures which led to increased cooperation and assistance between member countries who had signed to the convention.

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In 1993, the UK enacted The Criminal Justice Act. This act shaped the modern money laundering offence. It defined the act of money laundering in a broader manner and also enhanced the provisions for confiscations from the proceeds of crime. This act also created the obligation for the public to report a person who was suspected of having committed a money laundering offense. This act gave more power to the authority to act on money laundering which was also a rising crime at that time. It also made broad provisions in the application of confiscation law since it included money laundering which was not a part of during trafficking unlike the earlier legislation which had focused more on drug trafficking. (Stead, 2003)

However The Drug Trafficking Act of 1994 consolidated the drug provisions. It expounded more on these provisions of drugs and at the same time removed mandatory confiscation of drug activities. This provision also included a number of new money laundering provisions. This act also closed all loopholes which had been identified on organized cries. (OPSI, 1993, 1994)

However the first real act on proceeds of crime came in 1995 with the enactment of Proceeds for Crime Act. This act aligned all the crime confiscation provision with the Drug Trafficking act of 1994. This was important because it brought cohesion on the manner in which the law could be applied in confiscation of proceeds from any crime. The authority had realized that it was having a rough ride in prosecution of criminal and hence for the first time, it introduced the concept of use of assumptions in criminal lifestyle case. (OPSI, 1995)

The enactment of the Proceeds from Crime 2002 and the Asset Recovery Agency

These are some of the legislations that have been put in place in the UK to curb the issue confiscation of proceeds of crime. They are seen as the prerequisite legislations that led to the enactment of The Proceeds for Crime Act 2002 which is seen as the hall mark in the effort to put in place coordinated legal framework for confiscation of proceeds of crime. This act created a set of general offences which required the authority to confiscate the proceeds of crime. In order to put in place collaboration of the community, the act also made it an offense for failure to report anyone who is suspected o money laundering or anyone who is suspected of having

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benefited from the proceeds of crime. The act also put in place more profound provisions regarding the act of benefiting from the proceeds of crime. (OPSI, 2002; Stessens, 2000)

This act can be said to have been the hallmark in giving the authority power to confiscate the proceeds of crime. This act provided for the setting up of an Asset Recovery Agency (ARA). Under this provision, the act provided for setting up of the agency and appointment of its director. This agency is mandated with the duty of role of recovering all proceeds from those who are convicted of crime. But that act should act in line with the provision of the acts on Proceeds of crime since there must be a legal way of determining if really the proceeds are from criminal activities. The ARA is given the mandate for criminal restraint and confiscation of proceeds. It is also supposed to work in line with other investigators and to train financial investigators. It is concerned with civil forfeiture for proceeds of crime. The director is also given the mandate to exercise revenue powers in place of civil forfeitures. (The Crown Prosecution Service, 2006b)

Part 2 of the Act gives the court the power to make confiscation and related proceeding for any offense that was committed after 23rd March 2003. However the recent changes make in the act in 2006 has limited the power of the magistrate go confiscate to 10,000 pounds for simple cases but higher confiscation is given to the Crown Court. Part 5 of the act provide a scheme in which civil seizures can be carried out. It provides for civil seizure of cash which is related to any unlawful conduct in the inland unlike other provision which provided for it to be applied in ports. (The Crown Prosecution Service, 2006a; The Times, 2007b)

Evaluation of the reforms

Having looked closely at the reforms that have been carried out in the area of we can make some form of analysis on the success or failure of the reforms. From out review it is evident the earlier reforms were mainly aimed at addressing issues of drug trafficking and how the government could recover proceeds from these crimes as a way of curbing the offense. But the efforts of the government were not enough and there was a need to enact more strict rules to help in curbing the offence. (Steel, 2006)

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We can see a trend in which these laws kept on changing to suit the evolving world crime. With an initial target on the drug trafficking, there was a change on the approach and there was also the need to address proceeds that were coming from money laundering and other crime. Faced with increasing incidences of terrorism, there was need for the government to come up with new policies to curb terrorism. There was a link between activate of drug trafficking and money laundering and incidence of crime. Hence the enactment of a law on terrorism was aimed at diverting the use of fund from crimes for theism activities. (Daily Telegraph, 2008; Fabre, 2003)

Partly we can say these early laws were effectively on the recovery of proceeds from crime. However we should understand that law changes with time and there is need for any country to evolve with the way the world of crime evolves. Although they may not have fully achieved the intention of the lawmakers, we can see a record of improvement. For one, they were able to provide bases for enactment of a comprehensive act of 2002 which fully addressed the issue of need to have a legal framework to confiscate proceeds of crimes. (The Guardian, 2007)

The setting up of ARA may have worked well and it has lived well to its mandate. Since its inception it has played a major role and the government has been able to recover many assets. We are hopeful that there will be more legislation that will be put in place to streamline the process of confiscation. But as it stands now we can say the authority had succeeded. (The Times, 2007a; Naylor, 2002)

Conclusion

The above review gives us an indication of the process that our legal system has followed in the effort to have a legal framework to confiscate proceeds of crimes. The legal system has evolved with various legislations put in place. This legislation has evolved with time to address the real issue. The earlier efforts to confiscate proceeds of crime came from the efforts to fight drug trafficking and money laundering. With the enactment of Proceeds from Crime Act 2002 and the

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subsequent formation of ARA, we are hopeful that there will be more efforts directed towards confiscation of proceeds from crime.

References

Andelman, D. (1999). The Drug Money Maze. Foreign Affairs, Vol. 5(4): 3-9

Daily Telegraph, (2008). Drug dealers to have asset seized on arrest. February 2008

Fabre, G. (2003). Criminal Prosperity: Drug Trafficking and money laundering. London; Routledge

http://www.england-legislation.hmso.gov.uk/acts/acts1995/Ukpga_19950011_en_1

Jonathan, P. (2002). Prevention of E-money laundering. Suffolk Transnational Law Review, Vol. 25, p. 6

Naylor, T. (2002). Wage of Crime: confiscation. Ithacan: Cornell University

Office of Public Sector Information (OPSI) (1988). Criminal Justice Act 1988. Available at http:/ /www.opsi.gov.uk/acts/acts1988/Ukpga_19880033_en_1.htm

Office of Public Sector Information (OPSI) (1993). Criminal Justice Act (c. 36). Available at htt p://www.opsi.gov.uk/acts/acts1993/ukpga_19930036_en_1

Office of Public Sector Information (OPSI) (1990). Criminal Justice (International Co-operation) Act 1990 (c. 5). Available at http://www.opsi.gov.uk/Acts/acts1990/Ukpga_19900005_en_1.ht m

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Office of Public Sector Information (OPSI) (1994). Drug Trafficking Act 1994. Available at http:// www.opsi.gov.uk/acts/acts1994/Ukpga_19940037_en_1.htm

Office of Public Sector Information (OPSI) (1995). Proceeds of Crime Act (c. 11). Available at

Office of Public Sector Information (OPSI) (2002). Proceeds of Crime Act 2002. available at htt p://www.opsi.gov.uk/acts/acts2002/ukpga_20020029_en_1

Proceed or crime update, (2005). Inter- Agency Cooperation. Issue 59, September 2005

Richards, J. (1999). Transnational Criminal Organization. Handbook of Law Enforcement, 1999

Rider, B. A. (1999). Anti money Laundering Guide. Bicester

Stead, S. (2003). UK Money Laundering Regulation. A paper from SECOR Consulting.

Steel, B. (2006). Money Laundering Legislation. Billy’s Money Laundering Information review, 2006

Stessens, G. (2000). Money Laundering. New York: Cambridge University.

The Crown Prosecution Service, (2006a). Confiscation and Ancillary Orders – Pre POCA. CPS, 2006

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The Crown Prosecution Service, (2006b). Proceed of Crime Guidance. CPS, 2006

The Guardian, (2007). Record 125 million Pounds in asses recovered from criminals. May 2007

The Times, (2007a). Court order jailed financier to surrender 41 million pounds. November 2007

The Times, (2007b). Impoverished fraudster accused of hiding 33 million Pounds. September 2007

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