1. 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
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2. “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
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3. Recoverable Assets Proceeds of Crime Money Laundering Fraud Drugs
2. Debt recovery or fraud
Loan
Corporate Fraud
Corporate Veil
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4. 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 (UNCAC)
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5. POCA 2002 POCA 2002 Part 2 deals with “Criminal Remedy”
Part 5 provides for civil recovery
Part 8 provides investigatory Powers
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6. 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...."
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7. 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
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8. 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.
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9. 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 Recoverable property include Associated property.
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10. Extra-Territorial Cover of Part 5
Balfour Beatty
MW Kellogg
Langbar International Ltd v. Ryback & Others
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11. UN Convention Against Corruption (UNCAC)
UK became a signatory to it on 9 December 2003 and ratified it on 9 February 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.
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12. 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”.
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13. 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
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14. 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
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15. The Million Dollar Question is; Is the Nigerian Government making these Requests?
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16. 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?
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17. (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
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18. 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
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19. PAUL ONIFADE PARTNER CROWTHER SOLICITORS 14 Greville Street London EC1N 8SB PHONE: +44 (0) WEBSITE:
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