The Proceeds of Crime Act (POCA) is a vital piece of UK legislation that allows Trading Standards authorities (and other law enforcement agencies) to tackle criminal activity by recovering money and assets obtained through illegal means. The Act has been in place since 2003 and local authorities have had powers under it since 2006. In 2023-24, local authorities collectively recovered £12.5m of criminal finances and imposed confiscation and forfeiture orders totalling £33m.
The diverse work of Trading Standards provides rich opportunities to apply financial investigation powers and techniques. Whether in relation to doorstep crime, intellectual property, illicit tobacco or even weights and measures investigations, POCA can be applied.
Given the evidential importance of a suspect or defendant’s finances in proving offences in court, it’s never been more important for a modern Trading Standards service to have financial investigation capabilities. Accredited Financial Investigators (AFIs) and intelligence officers (AFIOs) can bring a lot to the table when developing an investigation; for example, they are entitled to obtain Suspicious Activity Reports from regulated organisations such as banks and building societies, which are compelled to submit them under POCA rules. These reports can assist investigators with identifying victims of crime, discovering previously unknown suspects and new offending, and finding accounts, money and other assets that may be seized to pay compensation later.
Furthermore, other tools include the ability to obtain financial material from a plethora of organisations using various court orders. For example, obtaining a suspect’s bank statements, conveyancing files and accountants’ records can be extremely useful when trying to prove the predicate Trading Standards offence. It can also identify money laundering which can be charged concurrently to the index offences. The value of charging these offences is that the penalties are often far greater than summary-only or even either-way regulatory offences. In addition to this, a conviction for money laundering is an automatic qualifying offence for criminal lifestyle provisions when it comes to Confiscation proceedings.
Alternative enforcement options
The POCA contains a suite of civil recovery powers. Therefore it has a useful part to play when considering disruption strategies as an alternative to criminal prosecution. One example is cash seizure/forfeiture powers can be used when conducting inspections or executing warrants where cash is found and it is thought that the cash has derived from an unlawful act, or there is suspicion it will be used to commit an unlawful act. The scenario of finding a bundle of cash in a draw when Trading Standards seizes illicit tobacco and vapes would be sufficient to form a reasonable suspicion that the money has derived from the sale of illicit tobacco, rendering it liable to seizure, as long as it is over £1,000.
Once assets are seized, the AFI will seek and obtain a Detention Order from the magistrates’ court for up to two years. This is to allow for an investigation into the derivation of the cash to take place. The major advantage of this route, compared to traditional enforcement is the lower (civil) standard of proof and the fact the burden is on the ‘interested party’ (i.e. the person from whom you seized the cash) to prove it is legitimate. Orders for forfeiture are subsequently made to the courts and 50% of funds flow back to Trading Standards.
Another noteworthy civil recovery power is Account Freezing Orders (AFOs). A useful Trading Standards scenario is a doorstep crime complaint is picked up. Following a review it’s a single complaint; the trader (or criminal) took the £2,500 deposit for roof repairs but then never returned to conduct the work. This is a scenario that will be familiar to most if not all Trading Standards Officers. It most likely won’t cross your departmental threshold for criminal investigation and prosecution so the victim may be left with a county court route to redress. The use of AFOs provides an alternative; the AFI can make enquiries with the victim’s bank if a cheque or transfer was used, and trace the payment to the bank account of the suspect. If it was a cash payment, then the suspect’s bank can be identified through other means.
The AFI can very quicky, often over the phone or email, identify whether the victim’s money – or any other money – exists in the suspect’s bank account. This is all done covertly and if funds are identified, similar to cash detention above, an application can be made to the magistrates’ court to freeze that money in the suspect’s bank account to allow further investigation. If it is confirmed, then a Forfeiture Order is made, and provisions are available to reunite the victim with their lost funds.
Similar civil recovery powers exist for ‘listed assets’ which include precious metals and precious stones, watches, artistic works, face-value vouchers and postage stamps, and cryptocurrency and crypto assets.
Top tips
Always engage a financial investigator at the earliest opportunity. Too often investigation teams and prosecutors wait until the investigation is advanced or even after proceedings have concluded before they think to engage an AFI. Delays can mean fewer opportunities exist for the AFI to have an impact. Once the suspect is aware of your investigation, they may dissipate or hide their assets; an AFI who has been engaged early will be able to trace and quantify assets, and seek Restraint Orders to prevent dissipation. This can be done at the pre- and
post-charge phase.
To maximise the benefits of having an AFI, include their objectives in the charging decision. It is not uncommon for this to be overlooked when it comes to drafting summons. For instance, in scenarios where there isn’t a qualifying offence ( POCA schedule 2), ensure that a charge sheet has sufficient charges (facts allowing of course) to trigger criminal lifestyle provisions (s.75). Commonly this is achieved by including a continuing offence of a minimum of six months and minimum value of £5,000, or four or more ‘single day’ offences with a minimum aggregate value of £5,000. After a conviction and POCA confiscation, with criminal lifestyle condition met, the AFI can include assets obtained or transferred for a period of six years prior to the date summons were issued – not just the benefit associated with the offences the criminal was convicted of.
Sometimes you will convict a defendant who has benefited hugely from their criminal conduct but doesn’t have any assets to show for it. In the current climate you could be forgiven for declining to spend more departmental resource in the courts pursuing a £1.00 Nominal Order. However, the advantage of sticking to the road and obtaining the £1.00 Order is that in doing so the court will also certify the defendant’s ‘benefit from crime’. If in the future the defendant comes into new assets, they are liable to have their Nominal Order increased to reflect this.
Visit tradingstandards.uk/cppdtest to complete the question and answer section of this module.
