The National Strategic Assessment 2019 highlighted the harm to the UK’s national security, economy and institutions posed by:

  • Money Laundering
  • Fraud / Other Economic Crime
  • International Bribery, Corruption & Sanctions Contravention
  • Cyber Crime

UK authorities such as the NCA target economic crime using civil court proceedings, as well as criminal. Civil proceedings have a number of important differences to criminal proceedings. For example:

  • The standard of evidence required to be successful in a civil case is lower. A party only needs to prove their case on a balance of probabilities.  In criminal proceedings, on the other hand, the Crown must prove beyond a reasonable doubt that the accused is guilty.
  • Individuals are not punished in civil proceedings, but the courts have the power to give judgment in favour of one party or another.
  • Parties may (and indeed often are encouraged to) settle civil proceedings without coming to court. Generally, parties have a wide degree of freedom as to the terms on which they settle such disputes, including terms which keep certain aspects of the settlement confidential between the parties, the NCA’s approach is to be as transparent as possible and keep any confidentiality to a minimum.
  • There is a general principle that a party that loses a civil case will pay the other party’s costs. Civil litigants therefore need to exercise caution in deciding which cases to take to court. 

Graeme Biggar, the Director General of the NECC, provides an insight into the work behind the response:

“The economic crime threat is becoming ever more complex and global in its nature. We are fortunate that, through the  operation of the Suspicious Activity Reports (SARs) regime and innovations like the Joint Money Laundering Intelligence Taskforce (a partnership with the private sector), UK law enforcement has a substantial amount of financial intelligence available to act upon.

“Where we suspect criminal finances are present in the UK, we have some powerful, and new, powers available to intervene and recover those funds such as Account Freezing Orders, Account Forfeiture Orders and Unexplained Wealth Orders. We will always use our civil powers in the way which it is best calculated to contribute to the reduction of crime. In doing so we will make sure that asset recovery and financial investigation are considered at an early stage in every case, including civil powers of forfeiture, recovery and taxation.

“Ultimately our goal is to tackle the harm to the UK’s economy and institutions – and ensure a more effective response for those who are victims of it. Partnership work with the financial services sector, prosecutions of those involved in financial and economic crime, and civil recovery of assets all play their part in this.”

Andy Lewis, Head of Asset Denial at the NCA, picks up the theme:

“Recovering criminal assets when you’re dealing with serious organised crime is rarely straightforward. Whenever we use our civil recovery powers we’ve got to be sure we can provide evidence to persuade the Court, to the civil standard, that the assets, which the respondents claim are legitimately theirs, are derived from criminality. We need to be adaptable and ready to consider a range of possible outcomes: no two asset recovery cases are ever quite the same. This kind of work is painstaking, time consuming and can be challenging for the investigators and lawyers involved – especially where the case encompasses sophisticated techniques for hiding criminal assets across multiple jurisdictions. For that reason I am delighted that one of my investigators has just won the Keith Hughes award for excellence in financial investigation, in connection with our use of Unexplained Wealth Orders (UWOs) (see note below).”

The Agency’s use of the civil UWO power has been extensively reported upon in the media, although sometimes the implications of its use are not widely understood. Andy Lewis again:

“Unexplained Wealth Orders are a helpful tool, but far from simple. They are designed to be targeted against those involved in serious crime or Politically Exposed Persons (PEPs) outside the EEA with assets that do not match their income. UWOs require a person to provide an explanation for their wealth. Failing to respond can result in the immediate forfeiture of the property – however the reality is that when dealing with high net worth targets and those involved in serious crime, you can expect a fight. When we’re seeking to recover the property of foreign PEPs in particular, we find ourselves up against individuals who have the incentive and the means to challenge all of our actions before the property is finally forfeited.  Over time I believe we’ll see that UWOs are  almost invariably going to be a gateway into a longer, adversarial, processes of civil asset recovery played out in court. Nevertheless, UWOs remain a really important tool in enabling us to start investigations and progress cases that we may otherwise not be able to take forward.”

Tackling the threat to the UK posed by corrupt foreign PEPs is a key part of the work of the NCA’s International Corruption Unit, which was also shortlisted for a Keith Hughes Award.

Head of ICU Andy Devine notes:

“Although our primary focus will always be on criminal justice outcomes, we frequently find ourselves in situations where a criminal disposal is not possible.  Yet we can’t ignore the way in which many corrupt elites seek to launder their illicit wealth in or through the UK; especially given the UK’s commitments under the UN Convention Against Corruption to trace and return stolen assets to the countries from which they have been stolen. These are often amongst the poorest developing countries in the world.

“In the most extreme scenarios our targets are still in positions of power in the countries they are exploiting, or have used their leverage to avoid serious sanction in their home jurisdiction.

“Working with overseas jurisdictions and seeking restraint of monies within a tight timeframe historically meant that requests could not always be serviced and acted upon within the legal timeframe. The ability to apply for, and seek moratorium extensions (another civil power introduced by the Criminal Finances Act 2017) has allowed us to work with overseas jurisdictions who, in the past, may have struggled to send a valid request for mutual legal assistance within the prescribed timescale. With the ability to extend the moratorium period by up to 186 days, we can now work with jurisdictions and overseas law enforcement where it has previously been difficult to do so.

“In January 2017, the NCA obtained the UK's first ever moratorium which helped prevent USD 500 million which had been embezzled from Angola being dissipated further. The money was subsequently returned to the Banco Nacional de Angola (BNA, the Angolan Central Bank, equivalent of the Bank of England).

“The international dimension of our work often makes it challenging to take steps such as evidence collection overseas or extradition of suspects to the UK. In the past, where we’ve become aware of money held in the UK by such people, our options to do anything about it have been really limited. However, the power in the Criminal Finances Act to forfeit funds held in bank accounts on a civil basis has really unlocked our ability to tackle this kind of issue. At their best, these account freezing and forfeiture orders (AFOs) not only give us a tool to claw back the proceeds of corruption but also I think will have a deterrent effect on corrupt elites who think they can stash their cash in the UK with impunity.”

An example of the NCA’s successful use of the AFO power was the son of the former prime minister of Moldova against whom the Court, having ordered the funds be frozen, made an Account Forfeiture Order for £466,000 following a corruption investigation. Andy Devine anticipates more of these orders to come in the near future.

Paul Cypher, Deputy Director NCA Legal:

“It is often very difficult to prove some of our cases to the criminal standard of ‘beyond reasonable doubt’ for all the reasons set out by my colleagues.

“The power to apply to the Magistrates’ Court in order to freeze and then, if appropriate, forfeit funds held in bank accounts on a civil basis was the one of the most important changes arising from the Criminal Finances Act 2017.

“The then Minister for Security and Economic Crime, Ben Wallace, during the committee stages of the Criminal Finances Bill in November 2016 stated ‘civil recovery is a powerful tool, because it can be used where a criminal prosecution followed by a confiscation order is impossible, perhaps because a person is abroad and cannot be extradited or there is not specific evidence linking an individual to a crime, but there is enough evidence to show that the property is linked to wealth generated from a crime’.

“The views of the Security Minister were reinforced by the  Guidance issued in January 2018 under Section 2A of The Proceeds Of Crime Act 2002. This guidance stated that ‘the reduction of crime is best secured through conviction’ however it recognised that this may not always be possible. In particular it identified that civil recovery may be appropriate where:

  • The only known criminality is overseas, and there is no extra-territorial jurisdiction to pursue a criminal case in the Courts of England and Wales, Scotland or Northern Ireland.
  • There is no identifiable living suspect who is within the jurisdiction or realistically capable of being brought within the jurisdiction.
  • Proceeds of crime can be identified or have come to the attention of law enforcement but cannot be linked (immediately) to any individual suspect or offence.
  • Cash or other property can be identified and seized or frozen in an effective and immediate manner.
  • A law enforcement authority considers that an investigation could not generate sufficient evidence to create a realistic prospect of conviction.

“Many of the points above are relevant to our investigations involving overseas jurisdictions and particularly to those involving high level political corruption.

“The guidance also recognises that there will be circumstances in which a conviction is feasible but use of the non-conviction based powers might better serve the overall public interest, for example through representing a better deployment of resources to target someone with significant property which cannot be explained by legitimate income.

“The key is that civil recovery powers allow us to freeze and then, where appropriate, forfeit funds where the Courts agree that there are reasonable grounds to suspect that they represent the proceeds of crime or may be used in crime. It is well documented that many criminals are willing to serve time in prison, what really hurts them is the denial and removal of their assets.”

In conclusion, Graeme Biggar notes:

“Tackling criminal assets, using all the powers available to us, is a key priority for the National Crime Agency, the National Economic Centre and across law enforcement. Since January 2018, over 1,000 Account Freezing Orders have been obtained relating to funds in excess of £245 million.

In the NECC we will continue to build on this work to ensure that the UK is not a safe haven for dirty money.”

The Keith Hughes Awards

The Keith Hughes Awards took place on Friday 15 November at Welford Road stadium, the home of the Leicester Tigers. Three nominees from the NCA were up for awards, open to representatives of any UK government agency operating in the field of financial investigation and asset recovery.

The awards were set up in memory of Detective Constable Keith Hughes, a financial investigator with the former National Crime Squad who died from cancer in July 2003. It promotes the values Keith’s work and life inspired, through recognising the achievements of those who have made an outstanding contribution within UK financial investigation and law enforcement.