The Proceeds of Crime Act 2002 (POCA) was brought in to galvanise law enforcement’s efforts to undermine the criminal business model and to remove one of the major drivers of organised and acquisitive crime – financial gain. Despite the recent legislative changes[i], has this initial policy aim been forgotten?
Based on the premise that ‘crime shouldn’t pay’, in 2000 the Cabinet Office paper ‘Recovering the Proceeds of Crime’ marked a turning point in the standing of asset confiscation as a tool to tackle and undermine acquisitive criminality. Backed by the consensus view of law enforcement practitioners and policy makers that traditional measures of arrest and commodity seizure were having a limited impact on more organised, hierarchical crime networks, this paper sought to put asset confiscation at the heart of the fight against organised and acquisitive crime.
A Legislative Turning Point - POCA
The paper ushered in the Proceeds of Crime Act 2002 (POCA), which became operational in 2003. POCA was significant in a number of ways; although criminal asset confiscation powers had existed under previous legislation[ii] these tools were previously limited to specific crimes. POCA introduced the concept of ‘lifestyle offences’[iii] to a wider range of crimes and perhaps most controversially, introduced legislative provisions to confiscate assets, on the civil standard of proof[iv], in the absence of a criminal conviction (so-called ‘civil recovery’). This non-conviction based regime was primarily aimed at tackling notorious crime-group heads who limit their involvement in the day-to-day logistics of their criminal empires (making them difficult to convict), but who benefit from the proceeds thereof.
Heralded at the time as a panacea to the problem of seemingly intractable organised criminal groups, POCA has now been in operation for over a decade. The policy and legislative focus has led to a continual rise in the levels of assets removed from the hands of criminals. For example the Home Office Serious and Organised Crime Strategy 2013 states that POCA powers are used to recover over £150 million a year and to deny access to a further £500 million. These statistics are impressive when compared with £4m of drugs proceeds being confiscated in 1999/2000 prior to this policy step-change[v]. In fact annual confiscated amounts quadrupled in the first five years of POCA from £25 million in 2002/3 to £104 million by 2007/8[vi].
A Drop in the Ocean
However, this growth has plateaued since 2007 as the law enforcement system has reached capacity and when juxtaposed with the estimated £3.7 billion annual size of the UK illicit drug economy alone[vii], even the Home Office admits these figures seem like a drop in the ocean[viii]. Furthermore, the system has been dogged by media and Parliamentary criticism aimed at the perceived inadequate enforcement of Criminal Confiscation Orders, including an unfavourable National Audit Office report in 2013 which examined the ‘value for money’ of the Confiscation Orders process on purely a ‘cash in – cash out’ basis[ix].
Revenue vs Retribution
But to consider POCA’s success purely in balance sheet terms is to miss the point. No other part of the criminal justice system has to explain its worth in purely financial terms. If it costs £1 million to take £1 million out of the hands of criminals then arguably this fulfils the original policy imperative of POCA – that crime shouldn’t pay. To balance this debate, the question we should perhaps pose is what impact these powers have had on the criminal economy since their inception, rather than looking at this area through an accountant’s eyes.
Whilst the government focus has been on legislative amendments, most recently under the Serious Crime Act 2015, the absence of credible alternative performance metrics in the field of asset confiscation has hampered governments efforts to seize the narrative in relation to POCA’s utility. Furthermore, the notable policy impediment set for the now defunct Assets Recovery Agency (ARA)[x] of being ‘self-financing’ three years after its set up imprudently introduced a ‘revenue generation’ principle into a policy that had been based on a ‘harm reduction’ model. Both of these factors have continued to detract from the wider debate as to whether the legislation and its enforcement has delivered on the original policy intention of undermining criminal networks and preventing criminal networks from financing further criminality.
As the Whitehall austerity years prevail and with law enforcement budgets being put under increasing pressure, this revenue generation ‘vs’ retribution debate looks set to continue. In an effort to balance the books, there is a risk that cases will be selected on a revenue model, rather than on the basis of criminal impact. This heightens the risk of the guiding principle of the policy losing out to the ‘bottom line’ and highlights the need for the government to put a more qualitative value on asset confiscation work, as difficult as this may be.
[i] POCA was amended by the Serious Crime Act 2015. The legislative changes came into effect on 1st June 2015.
[ii] For example, the Drug Trafficking Act 1994 and Criminal Justice Act 1988
[iii] This concept had previously only applied to drug trafficking confiscation cases and allows, under a certain schedule of offences, to it to be inferred that all income over the previous six years is criminal.
[iv] ‘Balance of probabilities’ – civil standard.
[v] Cabinet Office Performance and Innovation Unit Report 2000 - “Tackling the Proceeds of Crime” – pg 7.
[vi] NAO report on Confiscation Orders 2013; pg 10: http://www.nao.org.uk/wpcontent/uploads/2013/12/10318-001-Confiscation-Book.pdf
[vii] Home Office “Understanding Organised Crime: estimating the scale and social and economic costs 2013” https://www.gov.uk/government/publications/understanding-organised-crime-estimating-the-scale-and-the-social-and-economic-costs
[viii] “But these sums are still small when compared to the scale and cost of serious and organised crime to the UK economy” https://www.gov.uk/government/collections/serious-and-organised-crime-strategy pg 34
[ix] 2013 NAO Confiscation Orders report. http://www.nao.org.uk/report/confiscation-orders-2/
[x] The Asset Recovery Agency was disbanded in 2007 and a number of its functions transferred to the Serious Organised Crime Agency, which in turn was folded into the National Crime Agency in 2013.