By Paul Onifade Partner, Crowther Solicitors London Maximising Recovery Opportunities: The Interplay between Civil and Criminal Remedies in the United Kingdom By Paul Onifade Partner, Crowther Solicitors London CROWTHER SOLICITORS

“The cross-border flow of the global proceeds from criminal activities, corruption, and tax evasion is estimated at between $1 trillion and $1.6 trillion per year. Corrupt money associated with bribes received by public officials from developing and transition countries is estimated at $20 billion to $40 billion per year-a figure equivalent to 20 to 40 per cent of flows of official development assistance. These estimates, while imprecise, give an idea of the large magnitude of the problem and the need for concerted action to address it.” - World Bank Stolen Assets Recovery (StAR) Initiative CROWTHER SOLICITORS

Recoverable Assets Proceeds of Crime Money Laundering Fraud Drugs 2. Debt recovery or fraud Loan Corporate Fraud Corporate Veil CROWTHER SOLICITORS

Proceeds of Crime Underpinning Legislation in the UK Proceeds Of Crime Act 2002 (POCA 2002) Serious Organised & Police Act 2005 Serious Crime Act 2007 UN Convention Against Corruption 2003 (UNCAC) CROWTHER SOLICITORS

POCA 2002 POCA 2002 Part 2 deals with “Criminal Remedy” Part 5 provides for civil recovery Part 8 provides investigatory Powers CROWTHER SOLICITORS

Cut the profits that are made from crime The Purpose of POCA POCA is designed to prevent the enjoyment of the proceeds of crime- Serious Organised Crime Agency v Perry[2012] UKSC35 Cut the profits that are made from crime The primary obligation of the Enforcement Authority is to prosecute crime and not just recovery of assets Guidance issued by the Sec of State SOCA v. Olden (2002) ARA v. He and Chen (2004) John Denham, Minister for Police, Courts and Drugs, introducing the second reading of the Proceeds of Crime Bill in the House of Commons, October 30, 2001. Guidance was issued in November 2009 So Collins J. in Director of the ARA v He and Chen [2004] EWHC 3021 (Admin) (a case prior to the abolition of the ARA) said: “Thus, the approach of the Director must be to let criminal proceedings take precedence, as it were, and only act if such proceedings are either not being taken, or for any reason may have failed if, notwithstanding their failure or the inability for whatever reason to take them, she takes the view that she can establish within the requirements of the Act that the property in question was unlawfully obtained...." CROWTHER SOLICITORS

POCA Part 2- CRIMINAL REMEDY Upon conviction of or pleading guilty to an ‘acquisitive’ crime (such as money laundering, theft, drugs or fraud), the Enforcement Authority may ask for a “Confiscation Order”. Offender must have benefitted from the crime. “Confiscation Order must proportionate and Must be compliant with AIPI of ECHR See the case of R v Waya [2012] UKSC 51 in the UKSC Read the Summary – R v Wayas CROWTHER SOLICITORS

Order could be to sell their possessions to pay up even if the possessions were untainted. There’s also a provision for deterring criminal lifestyle- in which case money made or property bought in the last 6 years could be confiscated. CROWTHER SOLICITORS

POCA Part 5- CIVIL REMEDY S. 240(2) “Powers conferred by this Part are exercisable in relation to any property whether or not any proceedings have been brought for an offence in connection with the property.” Civil Remedy Action may be brought whether or not there is conviction, provided: The property is obtained through “unlawful conduct”. Unlawful could mean theft, fraud, tax evasion etc. In Waya’s case, it was deception to obtain mortgage loan. Conduct of one’s self or conduct of another. s. 243- Recoverable property include Associated property. CROWTHER SOLICITORS

Extra-Territorial Cover of Part 5 Balfour Beatty MW Kellogg Langbar International Ltd v. Ryback & Others CROWTHER SOLICITORS

UN Convention Against Corruption (UNCAC) UK became a signatory to it on 9 December 2003 and ratified it on 9 February 2006. As of September 2013, 168 countries have become parties to the UNCAC. Art 51 Return of Assets is a fundamental principle of the Convention The overriding Objective. - Confiscation is not for the benefit of the Crown. CROWTHER SOLICITORS

Art 57 “Property confiscated by State Party shall be disposed of, including by returning it to its prior legitimate owners”. Does Art 57 apply to Civil Recovery? Since it refers specifically to “property confiscated”. CROWTHER SOLICITORS

Does Art 57 cover Part 2 or Part 5 of POCA? That wording “property confiscated” is unfortunate But Art 51 refers to “Return of Assets” whether confiscated or not. Therefore any assets recovered either through Part 2 or Part 5 of POCA should be returned to the legitimate owners CROWTHER SOLICITORS

Establishes the trigger for the return process i.e. “Make a request”. Art 55 Establishes the trigger for the return process i.e. “Make a request”. Since the Advent of POCA & UNCAC, the UK has prosecuted a number of high profile Nigerian cases. -Dariye -Alamieyeseigha -Waya -James Ibori CROWTHER SOLICITORS

The Million Dollar Question is; Is the Nigerian Government making these Requests? CROWTHER SOLICITORS

Part 2- General Civil Remedy Foreign judgment For example: where debtor has absconded from Nigeria Assets may be traced to the UK. Foreign judgment is not automatically enforceable. AJA (1920) -Registration of Judgment (commonwealth States and States with bilateral treaty with UK) - s. 9(2) Did the Foreign State have jurisdiction? - Contractual dispute- Provisions complied with? CROWTHER SOLICITORS

(2) Foreign Judgments (Reciprocal Enforcement) Act 1933 (the “FJA”) Provides for registration of foreign judgments where the foreign country has reciprocal arrangement with the UK (3) Judgments can still be enforced by bringing an action on that foreign judgment. Once judgment registered, it has same effect as judgment originally given by an English court. Enforcement Procedures include: Third Party Debt Orders (formerly Garnishee Order) Charging Orders CROWTHER SOLICITORS

Should Police or EFCC always be involved? - Higher Standard of Proof - Delay in Investigation - Investigation often thorough - Crime Criminal Sanction Should Lenders prosecute the debtors? - Standard of Proof - Balance of Probability - Obligation to shareholders - Faster - Where assets are traced, Rewarding CROWTHER SOLICITORS

PAUL ONIFADE PARTNER CROWTHER SOLICITORS 14 Greville Street London EC1N 8SB PHONE: +44 (0)20 7785 6944 EMAIL: paul@crowthersolicitors.co.uk WEBSITE: www.crowthersolicitors.co.uk CROWTHER SOLICITORS