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Proceeds of Crime not Being Reclaimed Effectively

March 15, 2016 by Kelly No Comments »

A recent review by the National Audit Office (NAO) has said that the government is failing to reclaim much of the money that it could confiscate from offenders as proceeds of crime. According to the report, the system for reclaiming money that has been earned through criminal activities has “fundamental weaknesses,” which has led offenders now owing the government around £1.6 billion in unreclaimed assets.

Previously, in December 2013, the NAO reported that the government was only reclaiming 26p out of every £100 of assets that had been identified as being earned through criminal activity, or 0.26% of the total. While the watchdog recognises in its more recent report that there have been improvements to the system in the intervening period, it says that these simply “have not been enough” to reduce the debt owed to the state by offenders. On the contrary, the debt in question has increased since late 2013 by a total of £158 million, largely as a result of interest on existing debts, which accrues at an annual rate of 8% as long as that debt remains unpaid.

2014 saw the establishment of the Criminal Finances Improvement Plan, designed to facilitate the reclamation of assets from criminals. However, while the NAO’s recent progress report recognises that this has played some role in encouraging the improvement of enforcement orders, it also remains limited in its achievements. This is partly, the NAO says, down to the plan’s failure to provide clear goals or to set out specific metrics for success. Furthermore, enforcement and prosecution agencies have failed to increase their usage of early-action measures. Usage of orders to freeze criminal assets (restraint orders) has actually decreased, as has the number of professional financial investigators.

The NAO’s recent progress report did recognise some positives, however. It said that on an “operational” level, joint working between agencies and organisations had been improved. Information-sharing and the use of expertise from multiple departments has been improved, partly due to the decision that certain key teams should be based in the same location. The report also praised the government’s efforts to improve the recovery of criminal assets that have been earned in the UK through illegal activities and then transferred abroad.

Furthermore, the watchdog recognised improvements in the way that confiscation orders are administered, but said that the impact of this was limited. Justice agencies need to “address the deeper systemic problems” in this area, the report said, as well as “show more determination and urgency.”