In the run-up to this election, one of the best sound bites of the last election – “tough on crime, tough on the causes of crime” – was coming under scrutiny as a potential embarrassment to the Government.
White-collar and other crime affecting the business community has not been a high priority, with no major legislative initiatives and resources devoted to its detection so low that many police forces have disbanded their fraud squads. Late into the last Parliament the Government appears to be changing its stance.
In particular, the draft Proceeds of Crime Bill, recently issued by the Home Office for consultation, seeks to give a respectable boost to the fight against all acquisitive crime, including those committed in a business context. The consultation document proposes radical changes that would stop crime from being as lucrative. The thrust of the proposed legislation is to promote
the confiscation of the proceeds of crime. Reforms are proposed to the arrangements for criminal confiscation, including increased resources and a dedicated agency for recovery: the Criminal Assets Recovery Agency (Cara).
A category of criminal confiscation is introduced, to cover all property held by people with a “criminal lifestyle” that they cannot prove to have acquired innocently. New arrangements for civil confiscation are proposed, which will allow confiscation where a criminal conviction has not been obtained, using the lower standard of proof appropriate to civil actions. If this does not result in the removal of unaccountable funds, the director of Cara will have the option of raising tax, including penalties, where gains are reasonably suspected to arise from criminal activities and tax has not yet been paid. Money laundering legislation is to be tidied up, to prevent the safe use of proceeds of crime more effectively.
Overall economic effects
Crime is not only unfair and unjust, it also distorts economic decisions and can stifle innovation and other forms of legitimate commerce.
The draft legislation goes a long way to correct the derisory levels of confiscation. The business community must lend its support. However, the draft legislation must still be examined with care. There are business-unfriendly elements, which must be challenged so that they can be amended.
To correct the adverse economic effects of acquisitive crime, it is necessary not only to remove the proceeds from the criminal, but also to return it to its rightful owner. Little provision is made for this in the proposals. The victims of crime can make a claim or join with the director of Cara in actions for confiscation, but the director has no obligation to seek out victims and ensure that they are compensated. Innocent third parties can claim to have their funds returned or released and their inconvenience minimised, but they have to be aware of their loss, of the existence of the action being taken and what they need to do about it.
Throughout the draft legislation it is assumed that the first call on confiscated assets is the public purse and everyone else adversely affected will need to work hard and be well informed to guard their interests.
