On 13 October 2016 the Criminal Finances Bill (the “Bill”) had its first reading in the House of Commons. In addition to introducing Unexplained Wealth Orders (described in our blog below), the Bill sets out a number of new anti-money laundering powers. The Bill will:
- enable the seizure and forfeiture of the proceeds of crime that are stored in the UK, extending the current provisions to include value stored in bank accounts and high-value property, such as precious metals and jewels;
- enable the sharing of information between regulated companies, helping to ensure that they provide the best possible intelligence for law enforcement agencies to investigate;
- create new powers to assist investigations, including a power to extend the moratorium period in which Suspicious Activity Reports (SARs) can be investigated (originally 31 days) with extensions of 31 days (with a cap of six extensions equating to 186 additional days) and giving the National Crime Agency new powers to request information from regulated companies; and
- permit disclosure orders for money laundering investigations, requiring someone suspected of possessing information relevant to an investigation to provide information (bringing disclosure powers in money laundering investigations in line with corruption and fraud investigations).
The introduction of the Bill progresses the legal changes outlined in the UK Government’s Action Plan for Anti-Money Laundering and Counter-Terrorist Finance that was published in April this year and its Response to the Consultation on the Legislative Proposals, published on 13 October 2016. The Bill shows that, despite the change of prime minister and much of the cabinet, the Government remains determined to tackle financial crime.
This tip-sheet gives a summary of proprietary claims. This type of claim arises where a state’s property has been stolen, or wrongfully transferred away, such as property sold below market value as a result of bribery. It is a claim for a specific asset or sum of money, which can be contrasted with a compensatory claim for damages. So, for example, a victim state can claim the return of a stolen asset, including any increase in its value, in priority to other creditors. We explain how and when this type of claim can be used and the advantages a proprietary claim has over a claim for compensation in our tip-sheet here.
Civil proceedings brought by the state are one mechanism to recover the proceeds of crime, or to claim compensation for corrupt acts: as discussed in our previous post Recovering the proceeds of corruption: an overview.
Typically, substantial corruption cases are international in scope and the proceeds of a corrupt transaction are often laundered through and to countries other than the victim state. This international context means that (1) there are a number of countries in which civil claims can be made; and (2) corrupt assets may be located in multiple countries. It is normally inefficient and costly to bring proceedings in each of those jurisdictions. Instead it is often preferable to make a single claim leading to a judgment which can successfully be enforced in each country where assets are located.
The English courts are an attractive jurisdiction for civil asset recovery cases, as they offer judgments which are enforceable and respected in many foreign countries. Cooley’s briefing “International enforcement of English asset recovery judgments” outlines and discusses the various routes to enforcement of an English judgment abroad. It is available here.