The Proceeds of Crime Act 2002 (POCA) provides for a notoriously draconian regime for making confiscation orders against defendants who are convicted in criminal proceedings. Some of its harshest features arise from the fact that it often reads as if it had been written by Humpty Dumpty in Alice in Wonderland, who said of language that ‘when I use a word, it means just what I choose it to mean’.
As a fairly fundamental first point, it should be noted that ‘confiscation’ orders under POCA are not necessarily (and are usually not) about confiscating the proceeds of crime. Rather, the court makes an order against a convicted defendant in the lower of two values, namely the benefit he has obtained from his criminal conduct, and the amount he has available to pay. The effect is that defendants often have to use assets that were acquired perfectly legitimately to pay an order reflecting what the court thinks represents their benefit from crime.
‘Benefit’, however, also means something quite different in this context from what many would expect: it is emphatically not the profit someone has made from crime, but instead is defined as the value of property obtained by the defendant by or in connection with crime. The distinction is important because, for instance, someone who is arrested in possession of illegal drugs with a street value of £1m that he intended to sell on at a profit is held to have obtained a benefit of £1m, even though his profit margin would have been much smaller, and of course the drugs will by then have been seized and forfeited.
The situation is worse for people who are held to have had a ‘criminal lifestyle’, which again is defined by POCA in a very particular way, rather than by its literal meaning. Essentially anyone whose crime was of a certain type or committed over a certain period is subject to assumptions that absolutely everything he has owned, received or paid out in the six years prior to charge comes from crime, and the onus is on him to show that this is wrong or unfair.
The defendant also has the burden of showing that his ‘available amount’ is smaller than his ‘benefit’, which in many cases leads to unfairness (such as the drug dealer mentioned above, who is arbitrarily forced to prove that his assets are worth less than £1m); if he fails, the court can make a finding of ‘hidden assets’, though there may truthfully be nothing of the sort.
On top of that, the court takes into account the value of ‘tainted gifts’, which include any gifts or transfers at an under-value in the relevant period; they need not be actually ‘tainted’ either in the sense that they represent the proceeds of crime, or are made to a person who has any guilty knowledge; nor do they have to be ‘available’ to the defendant in the sense that he can get them back.
A little fairness seems at first glance to intervene at the end of the process, with the courts being unable to make orders unless they are ‘proportionate’ under Article 1, Protocol 1 (A1P1) of the European Convention on Human Rights (ECHR). Caution, however, is even necessary at this stage, as this does not mean that the amount of the order must be proportionate to what the defendant has actually made from crime; rather, the issue under the ECHR is balancing the aims of POCA against the defendant’s A1P1 property rights in each particular case, with results that are frankly often arbitrary and unpredictable.
Subject to that, the smaller of the two figures, ‘benefit’ and ‘available amount’, is then used as the amount of the confiscation order and referred to as the ‘recoverable amount’, although of course it may not actually be recoverable. The reality is that many confiscation orders are not satisfied and that defendants are often imprisoned in default, for failing to comply with an order that in truth may never have been possible, based on assets that may well not exist.
The rest of POCA has similar issues, with the police being empowered to seize cheques on the basis that they are ‘cash’, and ‘money laundering’ defined in such a way that it need involve neither money (the offences cover dealing with assets of any sort) nor laundering (even mere possession can be an offence), at least in the sense that most sensible people would define these terms. But the combination of surreally defined terms in the ‘confiscation’ regime, from ‘benefit’ and ‘criminal lifestyle’ to ‘available amount’, ‘tainted gifts’, ‘proportionality’ and ‘recoverable amount’, can be particularly hazardous for those who are unprepared for it.