Brexit: Proposed Regulations Regarding Financial Crime
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What Is a Confiscation Order?
Following a Restraint Order and a Criminal Investigation, the court may issue a Confiscation Order under The Proceeds of Crime Act 2002.
What is a Confiscation Order?
A Confiscation Order enables British authorities to confiscate any property of the defendant that is the proceeds of criminal activity – for example, money laundering or organised crime. They are issued by the Crime Court only – they cannot be issued by the Magistrates Court.
Why Are Confiscation Orders Issued?
These orders are put in place to take the profit out of crime. These types of court orders are often used in serious fraud, theft, money laundering and drug trafficking cases.
The reason why the courts do this is that it is fundamentally against the spirit of the law for a person to have benefited from a criminal lifestyle – meaning that a person shouldn’t be able to keep the proceeds of criminal activity.
The courts will take careful steps to preserve any defendant’s assets that they believe may be the proceeds of a crime. This could be through freezing bank accounts or seizing property held, for example.
Who Are Confiscation Orders Issued Against?
It is a common misconception that assets only be frozen belonging to those who have been arrested and charged with taking part in a crime. This is not true.
Anyone who is involved in an ongoing criminal investigation, regardless of whether or not they have been legally charged with a criminal offence, can have restraint proceedings instigated against them.
This means that their assets can be effectively frozen. As referenced in our article of the same name, these orders are referred to as a ‘Restraint Order’. As a result, it is possible (perhaps even likely) that the full amount of these assets will be confiscated by the government.
When do the Confiscation Proceedings begin?
Confiscation Orders can only be given by the Crown Court, and so the proceedings can only begin once the defendant has been convicted of an offence and sentenced.
Regardless of the specific circumstances in which the Confiscation Order is issued, it comes about as a request of the prosecution, or it may be handed down to the defendant by the court itself, depending upon the circumstances of the case and alleged offence.
What Happens If The Defendant Is Found Not Guilty?
If the defendant is found not guilty in a confiscation case, the order cannot be instigated. As a result, any restraint order that is in place should be rendered void immediately after the trial.
Repayment of assets
A Confiscation Order also enables the court to demand the repayment of any financial gain that the defendant has as a result of their general criminal conduct.
However, the court understands that it may be impossible for you to repay these assets straight away. As a result, there is usually a three-month grace period in which the court will expect you to pay a confiscation order. In certain circumstances, this grace period can be extended to six months.
If you do not comply with the forfeiture order in full within the allocated time, you will be sent to prison. There are standard default prison sentences that have been set out by the Powers of Criminal Courts Act 2000, which we have detailed in the table below:
| Amount still to be repaid | Default custodial sentence |
|---|---|
| Up to £200 | 7 days |
| £201 - £500 | 14 days |
| £501 - £1,000 | 28 days |
| £1,501 - £2,500 | 45 days |
| £2,501 - £5,000 | 3 months |
| £5,001 - £10,000 | 6 months |
| £10,001 - £20,000 | 12 months |
| £20,001 - £50,000 | 18 months |
| £50,001 - £100,000 | 2 years |
| £100, 001 - £250,000 | 3 years |
| £250,001 - £1 million | 5 years |
| Over £1 million | 10 years |
Confiscation Order: Frequently Asked Questions
How Long Do Confiscation Orders Last?
From the initial issue of a restraint order, a restraint order usually lasts for about 2 years.
Who Can Be Made Subject of a Confiscation Order?
Based upon a reading of the Proceeds of Crime Act 2002, an ‘absconder convicted of, or charged with, any crime’ can be given a Confiscation Order. This Confiscation Order can only be followed if the defendant has pled guilty or been convicted of a crime.
Can a Confiscation Order Be Made in the Absence of a Defendant?
Yes. The Proceeds of Crime Act 2002 does not require the defendant to be physically present for a confiscation order to be made. Furthermore, Sections 27 and 28 of the act provide for the possibility of making a Confiscation Order against an absconded defendant.
What Assets Can Be Confiscated?
As previously stated, Confiscation Orders are issued under the legal premise that it is wrong for a person to have benefited from a crime. As a result, the assets that can be confiscated are not restrained to realisable assets or tainted gifts. Assets that can be confiscated include:
- Assets that were stolen
- Instruments that were used to commit a crime
- Assets that exist as a result of the crime (meaning the proceeds of the crime)
What should I do if I’m facing, or have been issued, a Confiscation Order?
In these cases, it’s vital to seek professional legal advice as soon as possible, even if a Confiscation Order is just a possibility at this point. If you’re facing, or have been issued with a Confiscation Order, DPP Business & Tax can help.
For over 30 years, we’ve been working with businesses and individuals to ensure that justice is served. Our experienced solicitors and paralegals will help you through this process.
To discuss your next steps and learn how we can help you, get in contact with us today.