Part 3: Other Measures to Prevent or Disrupt Serious and Other Crime
Chapter 1: Prevention of Fraud.Sharing information with anti-fraud organisations
Section 68: Disclosure of information to prevent fraud
234.Subsection (1) confers power on a public authority (defined in subsection (8)) to disclose information as a member of a specified anti-fraud organisation or otherwise in accordance with arrangements made by such an organisation (also defined in subsection (8)) for the purposes of preventing fraud. Subsection (2) provides that the information that may be so disclosed can be of any kind (subsection 2(a)) and identifies the persons to whom it can be disclosed (subsection (2)(b)). Subsection (3) provides that such disclosure does not breach any obligation of confidence owed by the public authority, or any other restrictions on the disclosure of the information. Subsection (4) provides that the section does not authorise any disclosure in breach of the Data Protection Act 1998 or which is prohibited by Part 1 of the Regulation of Investigatory Powers Act 2000 (which regulates the interception of communications). Subsection (5) provides that nothing in the section authorises disclosure by a relevant public authority of information which relates to matters devolved to Scotland. Subsection (6) defines ‘relevant public authority’ for this purpose by reference to the Scotland Act 1998. Subsection (7) provides that the section does not limit the circumstances in which information may be disclosed apart from the power in the section (for example, disclosure by virtue of the common law). Subsection (8) defines ‘an anti-fraud organisation’ (that is, one which enables or facilitates sharing of information to prevent fraud); ‘information’; ‘public authority’ (which means any public authority under section 6 of the Human Rights Act 1998) and ‘specified’ (which means specified by an order by the Secretary of State: see section 85 for further provision about such orders).
Section 69: Offence for certain further disclosures of information
235.Subsection (1) makes it an offence to further disclose protected information in the circumstances set out in that subsection. Subsection (2) provides exemptions from the offence. Subsection (3) excludes from the offence cases where the information has been disclosed by a relevant public authority and the subject matter of it is within the legislative competence of the Scottish Parliament. Subsection (4) provides a defence to the offence if the person reasonably believed the disclosure was lawful or that the information had already and lawfully been made public. Subsection (5) defines ‘protected information’ as ‘revenue and customs information’ which reveals the identity of the person to whom it relates and any ‘specified information’ disclosed by a ‘specified public authority’ (these expressions are defined in subsection (7)). Subsection (6) defines revenue and customs information for the purpose of this section. Subsection (7) defines ‘Commissioners of Revenue and Customs’; ‘enactment’; ‘public authority’ (by reference to the definition in section 68); ‘Revenue and Customs’; ‘specified anti-fraud organisation’ (by reference to the definition in section 68); ‘specified information’ (that is, information specified or described in an order made by the Secretary of State) and ‘specified public authority’ (that is, a public authority specified in an order made by the Secretary of State. See section 89 for further provisions about such orders.)
Section 70: Penalty and prosecution for offence under section 69
236.Subsection (1) provides that the maximum penalty for a person found guilty of the offence under section 69 is (a) on conviction on indictment, two years’ imprisonment, a fine, or both; or (b) on summary conviction, 12 months, a fine not exceeding the statutory maximum, or both. Under the transitional provision in paragraph 7 of Schedule 13, the period of 12 months is reduced to 6 months pending commencement in England and Wales and Scotland of provisions referred to in that paragraph. Subsection (2) provides that in England and Wales prosecutions for such an offence may only be begun with the consent of the Director of Public Prosecutors or, in the case of revenue and customs information disclosed by Revenue and Customs, by the Director of Revenue and Customs Prosecutions (established by section 34 of the Commissioners for Revenue and Customs Act 2005). Subsection (3) makes provision for prosecutions in Northern Ireland which are similar to those in England and Wales. Subsection (4) extends liability to certain officers of a body corporate and partners and senior officers of a partnership where the offence in section 69 is committed by a body corporate or a partnership (as the case may be). Subsection (5) reduces the maximum penalty for summary conviction of the offence in Northern Ireland from 12 months to 6 months. Subsection (6) defines terms used in the section.
Section 71: Code of practice for disclosure of information to prevent fraud
237.Subsection (1) requires the Secretary of State to prepare and keep under review a code of practice with respect to the disclosure, for the purpose of preventing fraud, of information by public authorities as members of specified anti-fraud organisations or otherwise in accordance with any arrangements made by such organisations. Subsection (2) requires the Secretary of State to consult any specified anti-fraud organisation, the Information Commissioner and other such persons as the Secretary of State considers appropriate when preparing or altering the code. Subsection (3) requires public authorities disclosing information for the purposes of preventing fraud, or a particular kind of fraud, as a member of a specified anti-fraud organisation to have regard to the code. Subsection (4) provides that nothing in this section applies in relation to any disclosure by a relevant public authority of information whose subject matter is a matter about which provision would be within the legislative competence of the Scottish Parliament if it were included in an Act of the Scottish Parliament. Subsection (5) requires the Secretary of State to lay a copy of the code and any alterations to it before Parliament and publish it. Subsection (6) explains that the definitions of ‘information’, ‘public authority’, ‘relevant public authority’ and ‘specified anti-fraud organisation’ have the same meaning as in section 68.
Section 72: Data protection rules
238.This section inserts a new paragraph in Schedule 3 to the Data Protection Act 1998 to allow processing of sensitive personal data through an anti-fraud organisation. The processing must be necessary for the purposes of preventing fraud. Schedule 3 to that Act sets out additional conditions, one of which must be satisfied where the personal data that is being processed is sensitive personal data (as defined by section 2 of that Act). That expression includes information as to the commission or alleged commission of an offence by the data subject. Sub-paragraph (2) defines “anti-fraud organisation” for the purposes of this paragraph. The new paragraph is not limited to sensitive personal data that is processed pursuant to section 68 and includes disclosure of information under common law or other powers. The anti-fraud organisation does not need to be specified under that section.
Section 73: Data matching and Schedule 7
239.This section gives effect to Schedule 7. Schedule 7 is divided into three Parts dealing with England, Wales and Northern Ireland. Paragraph 2 of Part 1 inserts a new Part 2A into the Audit Commission Act 1998.
240.Subsection (1) of new section 32A (as so inserted) provides for the Audit Commission to carry out data matching exercises or to arrange for another organisation to do this on its behalf. Subsection (2) defines what a data matching exercise is. It involves the comparison of sets of data. For example, taking two local authority payroll databases and matching them. Matches should not occur but if they do, fraudulent activity may be highlighted. Subsection (3) defines the purposes for which the powers in subsection (1) can be exercised. These purposes are assisting in the prevention and detection of fraud. Subsection (4) provides that such assistance may, but need not, form part of an audit. Subsection (5) provides that data matching may not be used to identify patterns and trends in an individual’s characteristics or behaviour which suggest nothing more than his potential to commit fraud in future. This is designed to prevent the Audit Commission from creating individual “profiles” of future fraudsters. Subsection (6) provides that in succeeding provisions of Part 2A, reference to a data matching exercise is to an exercise conducted or arranged to be conducted under section 32A.
241.Subsection (1) of new section 32B enables the Audit Commission to require the provision of information to conduct a data matching exercise. Paragraph (a) provides for any body as mentioned in subsection (2). Paragraph (b) provides for any officer or member of that body. Subsection (2) sets out which bodies may be required to provide data under subsection (1)(a). They are (a) those bodies subject to audit, (b) English best value authorities (not subject to audit). Subsection (3) creates an offence and accompanying penalty for non-compliance with subsection (1)(b). Subsection (4) provides for the Audit Commission to recover any expenses they incur in connection with proceedings for an offence under subsection (3) from the body concerned. Subsection (5) explains which bodies are covered by the term ‘English best value authority’.
242.Subsection (1) of new section 32C provides that where the Audit Commission think it appropriate, they may conduct a data matching exercise using data held by or on behalf of bodies not subject to new section 32B. It also provides that such a body may disclose data to the Audit Commission for those purposes. This could include central government departments and some private sector bodies such as mortgage providers. There is no compulsion on any of these bodies to take part in a data matching exercise. Subsection (2) provides that the disclosure of information does not breach (a) any obligation of confidence owed by a person making the disclosure or (b) any other restriction on the disclosure of information however imposed. Subsection (3) provides that nothing relating to voluntary provision of data authorises any disclosure which (a) contravenes the Data Protection Act 1998 or (b) is prohibited by Part 1 of RIPA 2000. Subsection (4) restricts disclosure under subsection (1) if the data comprise or include patient data. Subsection (5) provides a definition of patient data. Subsection (6) provides that this section does not limit the circumstances in which data may be disclosed apart from this section. Subsection (7) provides that data matching exercises may include data provided by a body or person outside England and Wales.
243.Subsection (1) of new section 32D explains which information this section applies to. That is, information obtained for a data matching exercise and the result of any such exercise. Subsections (2)-(4) provide the circumstances in which information may be disclosed by or on behalf of the Commission. Subsection (5) imposes restrictions on the disclosure of information if it includes patient data (as defined in subsection (6)). Subsection (7) places restrictions on the further disclosure of information disclosed under subsection (2). Subsection (8) creates an offence of disclosing information to which this section applies except as authorised by subsections (2) and (7) and sets out the penalty. Subsection (9) disapplies section 49 from information to which this section applies. Subsection (10) makes it clear that “body” will include office-holders for the purposes of section 32D.
244.Subsection (1) of new section 32E makes clear that the Audit Commission will be able to publish a report on its data matching exercises, notwithstanding the limits on disclosure under section 32D. Subsection (2) provides that a report that is published under section 32E may not include information relating to a particular body or person if (a) the body or person is the subject of any data included in the data matching exercise; and (b) the body or person can be identified from the information; and (c) the information is not otherwise in the public domain. Subsection (3) provides that the Audit Commission may publish a report in such a manner as the Audit Commission considers appropriate for bringing it to the attention of those members of the public who may be interested. Subsection (4) disapplies section 51 of the Audit Commission Act 1998 (which contains general powers for the Audit Commission to publish information). Subsection (5) preserves the existing powers of the appointed auditor to publish information under Part 2.
245.Subsection (1) of new section 32F sets out the duty on the Audit Commission to prescribe a scale (or scales) of fees in respect of the data matching exercises it conducts. Subsection (2) provides that bodies referred to in new section 32B(1) must pay the Audit Commission according to the scales in subsection (1). Subsection (3) provides for circumstances where the work involved in a data matching exercise is substantially more or less than the Audit Commission originally envisaged. The Audit Commission can charge the body a fee which can be larger or smaller than that referred to in subsection (2). Subsection (4) sets out requirements on the Audit Commission before they prescribe a scale of fees. This includes the Audit Commission consulting bodies mentioned in new section 32B(2). It also includes the Audit Commission consulting other bodies or persons as they think appropriate. Subsections (5) and (6) set out powers of the Secretary of State in relation to fee scales. Subsection (7) provides that the Audit Commission may charge a fee to other bodies providing information or receiving results for data matching (in addition to the power under subsection (2)) and the terms under which such a fee are payable. The Audit Commission will collect these fees to recover the costs of carrying out data matching exercises.
246.Subsection (1) of new section 32G provides that the Audit Commission must prepare and keep under review a code of data matching practice. Subsection (2) sets out that all those bodies and other persons involved in this process must have regard to the code of data matching practice. Subsection (3) requires the Audit Commission to consult all bodies identified in new section 32B(2), the Information Commissioner, and such other bodies as the Audit Commission thinks appropriate before preparing or altering the code of data matching. Subsection (4) places a duty on the Audit Commission: (a) to send a copy of the code (and any alterations made to it) to the Secretary of State, who must lay it before Parliament; and (b) to publish the code from time to time.
247.Subsection (1) of new section 32H provides for the Secretary of State to extend by order the purposes of data matching exercises (as set out in new section 32A(3)) beyond fraud and to modify the application of this Part accordingly. Subsection (2) defines those purposes. Subsection (3) provides for the Secretary of State to add public bodies to those listed in new section 32B(2) by order. The Secretary of State may also modify the application of Part 2A to any body so added, and may remove bodies from section 32B(2). Subsection (4) provides that any order made under section 32H can include any incidental, consequential, supplemental or transitional provision the Secretary of State may see fit. Subsection (5) defines the meaning of public body.
248.Paragraph 3 of Schedule 7 inserts new subsection (1A) into section 52 of the Audit Commission Act 1998. This provides that any orders made under section 32H must be approved by affirmative resolution of both Houses of Parliament.
249.Paragraph 4 of Schedule 7 inserts a new Part 3A into the Public Audit (Wales) Act 2004. This gives the Auditor General for Wales data matching functions corresponding to the functions given to the Audit Commission under new Part 2A of the Audit Commission Act 1998. The data matching functions of the Auditor General for Wales will apply in or with respect to Wales. The Secretary of State will have similar order-making powers to extend the purposes for which data matching may be carried out in Wales, and to add to the list of bodies which may be required to participate in data matching in Wales, subject to prior consultation with the Auditor General for Wales.
250.Paragraph 5 of Schedule 7 amends paragraph 9 of Schedule 8 to the Government of Wales Act 2006 to allow the Auditor General for Wales to retain income from data matching fees, rather than paying it into the Welsh Consolidated Fund. The income covered by the amendment is confined to fees charged to local government bodies in Wales.
251.Paragraph 6 of Schedule 7 inserts new articles into the Audit and Accountability (Northern Ireland) Order 2003. The new articles give the Comptroller and Auditor General for Northern Ireland data matching functions corresponding to the data matching functions of the Audit Commission and the Auditor General for Wales. The functions may be used, among other things, to assist the Comptroller and Auditor General for Northern Ireland and local government auditors in the exercise of their respective audit functions. The power to extend the purposes for which data matching may be carried out in Northern Ireland, and to add to the list of bodies which may be required to participate, will rest with the Department of Finance and Personnel in Northern Ireland.
252.Paragraph 7 of Schedule 7 inserts a reference to data matching in Article 6(5) of the Audit (Northern Ireland) Order 1987. This will ensure that any liability incurred by the Comptroller and Auditor General for Northern Ireland in relation to his data matching functions is charged on the Consolidated Fund of Northern Ireland.
Chapter 2: Proceeds of Crime.Assets Recovery Agency
Section 74: Abolition of Assets Recovery Agency and redistribution of functions etc.
253.On such day as an order under section 74(1) provides, the Assets Recovery Agency (which is established by section 1 of, and Schedule 1 to, the Proceeds of Crime Act 2002 (‘POCA’)), and the corporation sole that is its Director, will cease to exist. Such an order is to be made by statutory instrument but is not subject to any parliamentary procedure (see section 89). Section 74(2) introduces Schedule 8 and section 74(3) introduces Schedule 9.
Schedule 8: Abolition of Assets Recovery Agency and its Director
254.Schedule 8 amends POCA and other relevant legislation to repeal or transfer functions currently conferred on the Assets Recovery Agency (‘ARA’) and its Director.
255.Under Part 1 of the Schedule, the role of the Director of ARA under Parts 2 and 4 of POCA in respect of confiscation and restraint orders in England and Wales and Northern Ireland, respectively, is repealed. A confiscation order is an order made by the court following conviction for a defendant to pay the proceeds of his crimes. References to receivers of the Director under Parts 2 (for example sections 52 and 53) and 4 of POCA are also repealed. Part 1 of the Schedule also makes consequential amendments to Part 9 of POCA (which concerns the relationship between confiscation and insolvency).
256.Under Part 2 of Schedule 8, the powers of the Director of ARA under Chapter 2 of Part 5 of POCA to bring civil recovery proceedings in the High Court in England and Wales and Northern Ireland are transferred to the Serious Organised Crime Agency (“SOCA”). These powers are also transferred, as respects England and Wales, to the Director of Public Prosecutions, the Director of Revenue and Customs Prosecutions and the Director of the Serious Fraud Office and, as respects Northern Ireland, to the Director of Public Prosecutions for Northern Ireland and the Director of the Serious Fraud Office (see the amendment made by paragraph 91 of Schedule 8). The Directors will be able to delegate any of their new functions under POCA to a member of their staff or contract out these functions to a person providing services under an arrangement (see new section 2C at paragraph 124 of Schedule 8).
257.Under Part 3 of Schedule 8, the powers under Part 6 of POCA are transferred to SOCA. Part 6 enables the Director of ARA to serve on HM Revenue & Customs a notice that she intends to carry out certain Revenue functions. Paragraph 102 of Schedule 8 creates a power for the Secretary of State to repeal by order Part 6 of POCA (as amended by Schedule 8). Such an order is subject to the affirmative resolution procedure (see section 89(3)).
258.Under Part 4 of Schedule 8, powers under Part 8 of POCA are transferred from ARA to SOCA. Part 8 enables the Director of ARA to apply for various orders to investigate confiscation cases and civil recovery cases. Part 4 also provides the Directors of the main prosecution agencies with investigation powers in support of their new abilities to bring civil recovery proceedings and requires the Attorney General, in the case of the Director of Public Prosecutions, the Director of Revenue and Customs Prosecutions and the Director of the Serious Fraud Office, and the Advocate General for Northern Ireland, in the case of the Director of Public Prosecutions for Northern Ireland, to issue a Code of Practice to provide guidelines for the operation of these new prosecutor’s investigation powers. This mirrors the existing requirement in section 377 of POCA on the Secretary of State to produce a Code of Practice for the Director of ARA, the staff of ARA, accredited financial investigators, constables and customs officers. Section 377 is amended by paragraph 114 of Schedule 8 to refer to SOCA rather than ARA. Under section 377A(10) the reference to the Advocate General for Northern Ireland is to be read as a reference to the Attorney General for Northern Ireland until such time as section 27(1) of the Justice (Northern Ireland) Act 2002 comes into force.
259.Paragraph 118 of Schedule 8 inserts a new section 449A into POCA to allow staff of the prosecution agency Directors to operate under POCA using pseudonyms. This mirrors the existing provision in section 449 of POCA, which is amended by paragraph 140 of Schedule 8 to refer to SOCA.
260.In addition, Part 4 of Schedule 8 makes amendments to limit the ability to apply for a disclosure order in confiscation proceedings. A disclosure order is an order authorising the applicant for the order to give a notice in writing to any person the applicant considers to have information relevant to the investigation underway requiring that person to answer questions, provide information or produce documents. At the moment only the Director of ARA can apply for a disclosure order. Under paragraph 108 of Schedule 8 amendments are made to section 357 of POCA. In relation to civil recovery investigations, SOCA or one of the Directors of the prosecution agencies will be able to apply for an order. In relation to a confiscation investigation, a prosecutor will be able to make an application but only following a request from an appropriate officer. The identity of the prosecutor depends on the identity of the appropriate officer as set out in new subsection (8) of section 357 (see paragraph 108(7) of Schedule 8).
261.Under Part 5 of Schedule 8, the role of the ARA to train, accredit and monitor performance of financial investigators under section 3 of POCA is transferred to the National Policing Improvement Agency. This Agency was established under Part 1 of the Police and Justice Act 2006 with the function of training and developing police officers.
262.Part 6 of Schedule 8 makes other amendments to POCA. Under a new section (section 2A), which paragraph 124 of Schedule 8 inserts into POCA, SOCA and the Directors referred to in paragraph 256 above are required to exercise their functions under POCA in the way best calculated to contribute to the reduction of crime. In doing so they must have regard to guidance issued under section 2A; that guidance must in particular indicate that such reduction is in general best secured by means of criminal investigations and proceedings. Paragraphs 131-134 of Schedule 8 amend the provisions in sections 435-438 of POCA on the use and disclosure of information so as to effectively refer to some of the new bodies undertaking civil recovery, namely the Director of Public Prosecutions, the Director of the Serious Fraud Office and the Director of Public Prosecutions for Northern Ireland. These bodies do not have existing information gateways in their parent legislation: broadly equivalent provisions are included in respect of SOCA and the Director of Revenue and Customs Prosecutions in the provisions referred to in paragraph 263 below.
263.Part 7 of Schedule 8 makes amendments to other legislation. These include amendments to section 33 of the Serious Organised Crime and Police Act 2005 (disclosure of information by SOCA) by paragraph 172 of Schedule 8 to extend the circumstances when disclosure may be made to reflect types of disclosure which are authorised by section 438 of POCA but would otherwise not be authorised by section 33. Similar amendments are made to section 40 of the Commissioners for Revenue and Customs Act 2005 by paragraph 167 of Schedule 8 in relation to the disclosure of information by the Revenue and Customs Prosecutions Office.
Schedule 9: Transfers to SOCA or NPIA
264.Schedule 9 enables the Secretary of State to make a scheme to provide for the transfer of the Director and staff of the ARA together with its property, rights, liabilities and other matters to SOCA or the National Policing Improvement Agency (‘NPIA’) established by section 1 of the Police and Justice Act 2006.
Section 75: Use of production orders for detained cash investigations
265.This section enables the production order provisions under Part 8 of POCA to be used for investigating the provenance or intended destination of cash seized under Chapter 3 of Part 5 of POCA (which provides for the recovery of cash in summary proceedings). The amendments made by this section create a new type of investigation, namely a detained cash investigation. This is additional to the existing types of investigation, namely a confiscation investigation, civil recovery investigation and money laundering investigation. These new investigation powers will assist in the preparation of a case for forfeiting the cash before the magistrates’ court in England and Wales and Northern Ireland or the Sheriff in Scotland.
Section 76: Use of search warrants etc. for detained cash investigations
266.Similar to section 75, section 76 allows for the search and seizure provisions under Part 8 of POCA to be used for investigating the provenance or intended destination of cash seized under Chapter 3 of Part 5 of POCA (“a detained cash investigation”). The existing safeguards for warrants will apply equally to those sought for a detained cash investigation.
Section 77 and Schedule 10: Further provision about detained cash investigations
267.This section gives effect to Schedule 10 which makes further provision about the use of production orders and search and seizure warrants for detained cash investigations.
268.Schedule 10, in particular, makes amendments to POCA to add the new power of a detained cash investigation to relevant provisions and safeguards within Part 8 of that Act.
Sections 78 to 81 and Schedule 11: Extension of powers of accredited financial investigators
269.An accredited financial investigator is an investigator who has been trained and accredited under section 3 of the POCA to undertake certain investigation, restraint and search and seizure functions under the Act. The persons trained can be investigators who are not constables or officers of HMRC in respect of the cash forfeiture powers under Chapter 3 of Part 5 of POCA, the investigation powers under Part 8 and other search and seizure powers. Constables and officers of HMRC have access to these powers without the need for accreditation.
270.Section 78 amends section 45 of POCA (and section 194 which is the equivalent provision in Northern Ireland) to enable accredited financial investigators to exercise the powers conferred by those sections. Sections 45 and 194 currently allow a constable or officer of HMRC to seize any property subject to a restraint order to prevent its removal from England and Wales or Northern Ireland, respectively. Such an order is designed to freeze property to prevent its dissipation in advance of the making of a confiscation order. The amendments made by this section enable financial investigators to have this power of seizure if they fall within a description of investigator specified for this purpose by an order made by the Secretary of State under section 453 of POCA. Such an order is likely to relate to the training that the investigator has had to exercise powers of seizure.
271.Section 79 gives effect to Schedule 11 which makes provision for accredited financial investigators to seize and seek the forfeiture of cash under Chapter 3 of Part 5 of POCA. That Chapter already allows a constable or officer of HMRC to seize, detain and apply for the forfeiture of cash that is suspected of being the proceeds of unlawful conduct or intended for use in such conduct. These are civil proceedings against the cash; there is no prosecution or sanction against an individual. Schedule 11 extends these powers to those accredited financial investigators who have been accredited under the Act to perform these functions. The accredited financial investigator will be able to search for cash on a person or premises and seize such cash if he suspects that it is the proceeds of unlawful conduct or intended for use in such conduct. The accredited financial investigator will also be able to apply for the detention of the cash and apply for its forfeiture before the magistrates’ court. The safeguards which apply to constables and officers of HMRC will similarly apply to accredited financial investigators, namely safeguards attached to the search power regarding approval and reporting to an independent person. The code of practice under section 292 will be amended to apply to accredited financial investigators to provide guidelines on the operation of their search powers. Paragraph 13 of Schedule 11 inserts section 303A which provides that a reference to an accredited financial investigator under these provisions is a reference to one who falls within a description specified in an order made by the Secretary of State under section 453 of POCA.
272.Accredited financial investigators can currently apply for a search and seizure warrant under section 352 of POCA, but such warrants have to be executed by a constable or officer of HMRC. Section 80 amends sections 352 and 353 to allow an accredited financial investigator who falls within a description specified by order made by the Secretary of State to execute a warrant.
273.Section 453 of POCA enables the Secretary of State to specify by order a description of the type of accredited financial investigators who may exercise functions conferred on accredited financial investigators under POCA. Section 81(1) amends section 453 to provide expressly that the Secretary of State can by order require relevant accredited financial investigators to have been satisfactorily trained to perform the relevant functions. This adds to the current express power to specify that an investigator must be of a particular grade.
274.As accredited financial investigators will be undertaking invasive powers, offences of assaulting, resisting or wilfully obstructing them in the course of their duties are created by the new section inserted by section 81(2) into POCA. An accredited financial investigator will not have the power of arrest. A person found guilty of any of these offences will be liable to a term of imprisonment not exceeding 51 weeks or a fine or both. The maximum sentence in Northern Ireland is 6 months which is also the maximum in England and Wales pending commencement of section 281(5) of the Criminal Justice Act 2003.
Section 82: Powers of management receivers and enforcement receivers
275.Section 82 amends sections 49 and 51 of POCA to enable management and enforcement receivers who are appointed by the courts in England and Wales to be given powers to sell or otherwise dispose of assets which are perishable or which ought to be disposed of before their value diminishes, before a person having an interest in that property has had an opportunity to make representations. Section 82 also amends sections 197 and 199 of POCA to give management and enforcement receivers in Northern Ireland similar powers.
Section 83: Civil recovery management receivers
276.This section amends POCA to provide for a new type of receiver in civil recovery proceedings whose only function will be to manage property subject to a property freezing order. This is distinct from the current role of an interim receiver who has the additional roles of investigation of the property which he manages and reporting findings to the enforcement authority and the court. The new management receiver will have no investigation function and so will have no influence on the progress or final outcome of the case, accordingly the role does not need to be independent and therefore can be performed by a member of staff of the enforcement authority that is pursuing the civil recovery case.
Section 84: Powers for prosecutors to appear in cash recovery proceedings
277.This section amends POCA and the Commissioners for Revenue and Customs Act 2005 to enable the Director of Public Prosecutions or the Director of Public Prosecutions for Northern Ireland to act for constables and the Director of Revenue and Customs Prosecutions to act for officers of Revenue and Customs in cash recovery proceedings in the magistrates’ courts. In the case of the Director of Revenue and Customs Prosecutions, the Commissioners for Revenue and Customs Act 2005 is amended to allow designated staff who are not prosecutors and outside contractors to appear in these proceedings. The amendments made by this section are further amended by paragraph 12 of Schedule 11 to the Act to include accredited financial investigators in these new provisions. These amendments will only be needed when accredited financial investigators are given functions in relation to the recovery of cash in summary proceedings (see the commentary on section 77).
Section 85: Disclosure of information by Revenue and Customs
278.This section allows HMRC to disclose information for the purposes of civil recovery of the proceeds of crime. The purpose is to permit the disclosure of information that would otherwise be protected by the code of confidentiality in section 18(1) of the Commissioners for Revenue and Customs Act 2005. Subsection (1) states that the section applies to information held as mentioned in section 18(1) of the Commissioners for Revenue and Customs Act 2005. Subsection (2) sets out the circumstances in which information may be disclosed by or with the authority of the Commissioners. Subsection (2)(a) permits disclosure to the Criminal Assets Bureau in Ireland for the purpose of enabling or assisting it to exercise any of its functions in connection with any matter within subsection (3). Subsection (2)(b)(i) permits disclosure to a public authority specified in an order made by the Treasury for the purpose of enabling or assisting it to exercise functions in connection with any matter within subsection (3). Subsection (2)(b)(ii) provides that the order may specify or describe the matters within subsection (3) which apply.
279.The public authority may be in the United Kingdom or elsewhere. Subsection (3) sets out the matters which will permit disclosure, which are the identification of proceeds of crime, the bringing of civil proceedings for enforcement purposes in relation to proceeds of crime and the taking of other action in relation to proceeds of crime. Subsection (4) provides that information disclosed in accordance with subsection (2) must not be further disclosed except in the exercise of functions in connection with a matter within subsection (3) (or, in a subsection (2)(b)(ii) case, a matter within subsection (3) specified or described by order) and with the consent of the Commissioners or an authorised officer of HMRC. Subsection (5) provides that consent or authorisation under subsection (4) may be general or specific. Subsection (6) provides for the application of section 19 of the Commissioners for Revenue and Customs Act 2005 (offence of wrongful disclosure) if any person in the United Kingdom discloses information in contravention of subsection (4) relating to a person whose identity can be deduced from it. Section 19 will apply in relation to the disclosure as it applies to section 20(9) of the 2005 Act (prohibition on further disclosure without consent). Subsection (7) provides that a disclosure to the CAB or specified public authority is a reference to such persons as may be specified in relation to the CAB or authority. Subsection (8) provides that nothing under this section authorises the making of a disclosure which contravenes the Data Protection Act 1998, or Part 1 of the Regulation of Investigatory Powers Act 2000. Subsection (9) sets out definitions of terms used in this section.
Section 86: Use of force in executing search warrants: Scotland
280.This section makes it explicit that a proper person (as defined in section 412 of POCA) can use reasonable force to execute a search warrant under section 387 of POCA. This is a search warrant used in investigations under Part 8 of POCA. There is no need for an equivalent provision in respect of search and seizure warrants issued in England, Wales and Northern Ireland as the power to use reasonable force is implicit.
Chapter 3: Other measures
Section 87: Incidents involving serious violence: powers to stop and search
281.At present, an officer at least of the rank of inspector can give an authorisation in the circumstances set out in section 60 of the Criminal Justice and Public Order Act 1994, following which people and vehicles within the specified locality can be stopped and searched. These circumstances are where serious violent incidents are anticipated and it is expedient to give an authorisation to prevent their occurrence, or where the police suspect that persons are carrying dangerous instruments or offensive weapons in the locality without good reason.
282.The power to stop and search can be used whether or not the police have a reasonable suspicion that a person is carrying dangerous instruments or offensive weapons. This section extends the powers in section 60 of that Act to add a further circumstance in which they can be used; where a serious violent incident has occurred, and the police believe that the weapon used in the incident is being carried in the locality and it is expedient to give an authorisation to find the weapon. The purpose of this is to assist the police in locating the weapon used in the incident, and in apprehending the offender.
283.In this particular circumstance, the police would be able to make an authorisation orally in the first instance, to be followed in writing as soon as is practicable. In the existing two circumstances they will continue to need to make any authorisation in writing.
Section 88: Extension of investigatory powers of Revenue and Customs
284.This section gives effect to Schedule 12 which will make various criminal investigation powers apply consistently to all functions of Her Majesty’s Revenue and Customs (HMRC).
285.When the Commissioners for Revenue and Customs Act 2005 created the new department of HMRC it carried forward the statutory powers of the former Inland Revenue and former HM Customs and Excise (HMCE). But it ring-fenced them to constrain the use of the powers to their original purposes. The powers covered by this Schedule could be used only when dealing with former HMCE matters. The changes made by this Schedule make the powers available whether a former HMCE or former Inland Revenue matter is involved.
286.Paragraph 1 of Schedule 12 amends section 93 of the Police Act 1997 so that references to an officer of HMCE are changed to an officer of HMRC. Section 93 allows an ‘authorising officer’ to authorise action to interfere with property (for example, entering a property to place a listening device) or take action in respect of wireless telegraphy where he or she believes it to be necessary to tackle serious crime and to be proportionate to the intended results. Section 93(5)(h) provides that the authorising officers have to be designated for this purpose by the Commissioners for HMRC. Paragraph 1(c) requires that only senior officials within the meaning of the Regulation of Investigatory Powers Act 2000 can be so designated. Section 81(1) of that Act provides that “senior official” means “member of the Senior Civil Service”.
287.The effect of the changes made by paragraph 1 is to allow action to be authorised under section 93 when it relates to an ex-Revenue matter, at the moment the section only applies to ex-HMCE matters. There is no change to the tests that have to be passed before the authority can be given or to the role of the independent Office of Surveillance Commissioners who oversee the use of these powers and must approve certain authorisations.
288.Section 93(4) of the Police Act 1997 defines what is meant by ‘serious crime’. The subsection also restricts the authorisations which can be made by an officer of Revenue and Customs to those relating to ‘an assigned matter within the meaning of section 1(1) of the Customs and Excise Management Act 1979’. The reference to ‘an assigned matter’ is not amended by this Schedule as, following the amendments made to the definition by the Commissioners for Revenue and Customs Act 2005, it applies to all HMRC’s responsibilities, not just ex-HMCE ones.
289.Paragraph 2 of this Schedule makes a consequential amendment to section 94 of the Police Act 1997 which concerns authorisations in the absence of an authorising officer.
290.Paragraph 3 of this Schedule makes a consequential amendment to section 107 of the Police Act 1997 concerning matters that the Prime Minister may, after consultation with the Chief Commissioner and Scottish Ministers, exclude from the copy of the Chief Surveillance Commissioner’s annual report laid before each House of Parliament. The amendment provides that matters prejudicial to the discharge of the duties of the Commissioners for HMRC may be so excluded (section 107 currently refers to Commissioners of HMCE).
291.Paragraph 4 of this Schedule amends section 108 of the Police Act 1997 to remove the definition of ‘customs officer’ which is no longer necessary. The new phrase ‘officer of Revenue and Customs’ is defined by section 5 of and Schedule 1 to the Interpretation Act 1978 and does not need a separate definition in the Police Act 1997.
292.Paragraph 5 of this Schedule provides for the Regulation of Investigatory Powers Act 2000 (RIPA) to be amended. Any reference in this part of the notes to a numbered section is to that section of RIPA.
293.Paragraph 6 of this Schedule amends the list of persons who can apply for an interception warrant in section 6(2) to substitute a reference to the Commissioners for HMRC for a reference to the Commissioners of HMCE. An interception warrant can authorise certain conduct, including the interception of communications in the course of their transmission by means of a postal service or telecommunications system (section 5(1)). A warrant may be issued by the Home Secretary, or the First Minister in Scotland, or Secretary of State for Northern Ireland where he or she believes that the conduct authorised by the warrant is proportionate to the results intended and is necessary:
in the interests of national security,
for tackling serious crime,
for safeguarding the economic well-being of the UK, or
for the purpose of giving effect to any international mutual assistance agreement and tackling serious crime.
294.The effect of the amendment made by paragraph 6 is to allow the Commissioners for HMRC to apply for an interception warrant in connection with any of HMRC’s responsibilities. At the moment an application could only be made in respect of an ex-HMCE matter. There is no change to the conditions that have to be met before a warrant can be issued or the safeguards provided by RIPA in respect of the intercepted material.
295.Part I Chapter II of RIPA concerns the acquisition and disclosure of ‘communications data’ which is defined at section 21(4). The acquisition of this data is lawful where conducted by a person authorised or required to engage in that activity by an authorisation or notice granted or given under Chapter II of Part I and provided the conduct is in accordance with, or in pursuance of, the authorisation or requirement (section 21(2)). Where a ‘designated person’ believes it is necessary to obtain communications data and the relevant tests are passed he or she can:
grant an authorisation for persons in the same public authority to engage in the relevant conduct (section 22(3)), and
by notice require a postal or telecommunications operator to obtain the data and disclose it to the designated person (section 22(4)).
296.The ‘designated persons’ are individuals holding certain positions with ‘relevant public authorities’. The detail of who is a designated person, and the grounds on which they can obtain communications data, is set out in The Regulation of Investigatory Powers (Communications Data) Order 2003 (SI 2003/3172). The Commissioners of HMCE and the Commissioners of Inland Revenue were both ‘relevant public authorities’. For both ex-HMCE and ex-Revenue matters communications data can be obtained by HMRC where it is believed necessary for either tackling crime or preventing disorder, or assessing or collecting tax (section 22(2) and article 6 of SI 2003/3172). In addition communications data can only be sought where that is believed to be proportionate to the result sought (section 25(5)) and where the grounds are to assess or collect tax the only data that can be obtained is ‘subscriber data’ as defined at section 21(4)(c) (article 7 of SI 2003/3172).
297.The only difference at the moment between HMRC’s powers under Part I Chapter II of RIPA for ex-HMCE and ex-Inland Revenue matters concerns the data that can be obtained when action is believed necessary to tackle crime or prevent disorder. Where ‘traffic data’ (as defined at section 21(4)(a)) is sought on these grounds in relation to an ex-Inland Revenue matter only data relating to a postal service can be obtained, data relating to a telecommunications system cannot be sought. For ex-HMCE matters data relating to either a postal service or a telecommunications system can be sought. This restriction for ex-Inland Revenue matters is imposed by article 10 of SI 2003/3172, there is no difference in the treatment of ex-HMCE and ex-Revenue matters in RIPA itself. Because of this the changes being made by the Schedule do not of themselves change HMRC’s powers, they simply update references to the old departments. However, when SI 2003/3172 (The Regulation of Investigatory Powers (Communications Data) Order 2003) is amended the intention is to remove this restriction in article 10 relating to ex-Inland Revenue matters. Once that is done HMRC will be able to obtain traffic data relating to both postal services and telecommunications systems where that is believed necessary, and proportionate, for tackling crime or preventing disorder.
298.Paragraph 7 of this Schedule makes a consequential amendment to section 21(5) of RIPA to substitute a reference to ‘officers of Revenue and Customs’ for a reference to ‘customs officers’ when referring to Part III of the Police Act 1997. This is to reflect the changes being made to the Police Act 1997, as detailed above.
299.Paragraph 8 of this Schedule amends section 25(1) of RIPA to substitute a reference to HMRC for references to HMCE and the Inland Revenue in the definition of ‘relevant public authority’.
300.Part II of RIPA deals with directed surveillance, intrusive surveillance and the conduct and use of covert human intelligence sources. These three types of activity are defined at section 26(2) to (11). The Schedule makes no change to the RIPA procedures for authorising directed surveillance and the use of covert human intelligence sources. The changes being made in respect of intrusive surveillance are detailed below.
301.Paragraph 9 of this Schedule makes a consequential amendment to section 27(4) to substitute a reference to ‘officers of Revenue and Customs’ for a reference to ‘customs officers’ when referring to Part III of the Police Act 1997. This is to reflect the changes being made to the Police Act 1997, as detailed above.
302.Section 32 of RIPA deals with the authorisation of intrusive surveillance (such as using listening devices in residential premises). Intrusive surveillance can be authorised where it is believed to be proportionate to the intended results and is necessary:
in the interests of national security,
for tackling serious crime, or
in the interests of the economic well-being of the UK.
303.Usually authorisations for intrusive surveillance do not take effect until they have been approved by an independent Surveillance Commissioner (section 36). At the moment HMRC can use intrusive surveillance for ex-HMCE matters but not for ex-Revenue matters. The Schedule changes this, as detailed below, so that it can be used for ex-Revenue matters as well. The conditions that have to be met and authorisations granted are not altered.
304.Paragraph 10 of this Schedule amends the definition of ‘senior authorising officer’ at section 32(6). The reference to a customs officer is changed to an officer of Revenue and Customs designated for that purpose by the Commissioners for HMRC. The amendment provides that only senior officials can be so designated. Section 81(1) defines “senior official” as “a member of the Senior Civil Service”. The “senior authorising officer” is the officer who can authorise intrusive surveillance and this change will allow authorisations to be made in respect of all HMRC’s responsibilities, including ex-Inland Revenue ones not just ex-HMCE matters.
305.Paragraph 11 of this Schedule makes consequential amendments to section 33 (police and customs authorisations) to change references to HMCE and its officers to HMRC and its officers. The rule which prevents an officer granting an authorisation except on an application by another officer of the department is retained in an updated form.
306.Paragraphs 12 to 18 make consequential amendments to change references to HMCE and its officers to HMRC and its officers in the remainder of Part II of RIPA.
307.Part III deals with electronic data protected by encryption. Section 49 provides a power to enable persons with the ‘appropriate permission’ to serve notices on individuals or bodies requiring the disclosure of protected (for example encrypted) information which they lawfully hold, or are likely to, in an intelligible form. The power under section 49 can be used where the conditions set out at subsection (2) are met. The Schedule makes various amendments to Part III so it applies consistently to HMRC.
308.Section 49 of RIPA limits the information to which the power to serve notices applies by defining the various means by which the protected information in question has been, or is likely to be, obtained at subsection (1)(a) to (e). HMRC could already issue notices in respect of the information specified in subsections (1)(a) to (d) whether they related to ex-HMCE or ex-Inland Revenue matters. However, HMRC could issue a notice in respect of information it holds which falls within section 49(1)(e) only where it relates to an ex-HMCE matter and not where it relates to an ex-Inland Revenue matter. Subsection (1)(e) covers information that has come into (or is likely to come into) the possession of the customs and excise by any lawful means not involving the exercise of statutory powers and not covered by subsections (1)(a) to (d).
309.Paragraph 19 of this Schedule amends section 49(1)(e) so it applies to information which has come into the possession of HMRC, rather than HMCE. This allows HMRC to issue a notice under section 49 in respect of this information whether it relates to an ex-Inland Revenue or an ex-HMCE matter.
310.Paragraph 20 of this Schedule makes consequential amendments to section 51 to substitute references to HMRC for references to HMCE. This section sets out the extra tests to be fulfilled if a key (such as a password or decryption key – see definition at section 56(1)) is required to be disclosed rather than the disclosure of protected information in an intelligible form.
311.Paragraph 21 of this Schedule amends section 54 to substitute a reference to HMRC for a reference to HMCE. This section allows a section 49 notice to contain a provision requiring the recipient, or anybody else who becomes aware of it, to keep it secret. This can be done only where the protected information it relates to has been obtained by means which it is reasonable to keep secret from a particular person to maintain the effectiveness of any investigation or investigatory technique, or in the interests of any person’s safety or well-being. At the moment HMRC can only impose a requirement under section 54 in connection with ex-HMCE matters. Changing the reference to HMCE to HMRC will allow a requirement to be imposed whenever the conditions are met, whether an ex-HMCE or ex-Inland Revenue matter is involved.
312.Paragraph 22 of this Schedule amends section 55 to substitute a reference to HMRC for a reference to HMCE. This section places a duty on various people to safeguard the use of disclosed keys and describes the safeguards that must be in place. The change made by paragraph 22 ensures that these safeguards apply to all keys HMRC may obtain, not just to keys relating to ex-HMCE matters.
313.Paragraph 23 of this Schedule makes a consequential amendment to section 56 by removing the definition of ‘the customs and excise’.
314.Paragraphs 24 and 25 of this Schedule make consequential amendments to sections 65 and 71 (the Tribunal and Codes of Practice respectively) to substitute references to HMRC for references to HMCE.
315.Paragraphs 26 and 27 of this Schedule make consequential amendments to sections 76A and 81 (Foreign Surveillance Operations and General Interpretation respectively) to update a reference to a ‘customs officer’ and remove the definition of that term which is no longer necessary.
316.Paragraph 28 of this Schedule makes a consequential amendment to Part I of Schedule 1 to substitute a reference to HMRC for references to HMCE and the Inland Revenue. Part 1 defines relevant authorities for the purposes of sections 28 and 29 - authorisation of directed surveillance and covert human intelligence sources.
317.Only a person with the ‘appropriate permission’ under Schedule 2 may issue a notice under section 49 (section 49(2)) requiring the disclosure of protected (for example encrypted) information. At the moment where an ex-Inland Revenue matter is involved a judge’s permission (sheriff in Scotland) under paragraph 1 of Schedule 2 is always required before an officer can have the appropriate permission. In certain circumstances an officer of HMRC can have the appropriate permission in respect of an ex-HMCE matter without obtaining a judge’s permission. A judge’s permission is not required in relation to ex-HMCE matters in two circumstances, as detailed below:
Under paragraph 2 of Schedule 2 where certain protected information was obtained under a warrant issued by the Secretary of State, or a person holding judicial office, or an authorisation under Part III of the Police Act 1997 and the warrant or authorisation gave permission for the section 49 notice to be given. Alternatively, written permission could be obtained from the ‘relevant authority’ (as defined at paragraph 2(6) of Schedule 2) for the issue of the notice after the issue of the warrant or authorisation.
Under paragraph 4 of Schedule 2 where unintelligible information is, or is likely to be, obtained under statutory powers but without a warrant issued by the Secretary of State or a person holding judicial office, or an authorisation under Part III of the Police Act 1997.
318.For an officer of HMRC to have the appropriate permission in respect of an ex-HMCE matter the Commissioners for HMRC, or an officer of or above such level as they may designate for the purpose, must give permission for the section 49 notice to be issued in relation to that protected information (paragraph 6(4) of Schedule 2). This is not a requirement in respect of ex-Inland Revenue matters at the moment.
319.Paragraph 29 of this Schedule amends Schedule 2 to substitute references to HMRC for references to HMCE. The effect of this is to make Schedule 2 apply to HMRC as a whole in the same way it currently applies to ex-HMCE matters as explained above. The rules on who has the “appropriate permission” to issue a section 49 notice will apply in future to all information HMRC obtains in the way they currently apply to information relating to ex-HMCE matters.
320.Paragraph 30 amends Schedule 2 to the Commissioners for Revenue and Customs Act 2005 (CRCA) to provide that paragraphs 1 (in respect of the Wireless and Telegraphy Act 2006 (WTA)) and 11 (in respect of RIPA) shall cease to have effect. Those paragraphs prevent HMRC using the following powers in respect of ex-Revenue matters:
Paragraph 1 section 48 of WTA, and
Powers conferred by RIPA relating to interception, intrusive surveillance and certain of those for the investigation of electronic data protected by encryption.
321.The substantive changes being made to those powers are described above. Paragraph 30 removes the rule currently preventing the powers being used by HMRC for ex-Inland Revenue matters.
322.Paragraph 31 of this Schedule confirms that sections 6 and 7 CRCA do not restrict the functions in connection with which officers can exercise a power amended by this Schedule. Normally sections 6 and 7 CRCA would prevent a power or duty conferred on an officer of HMCE being exercised in connection with an ex-Inland Revenue matter and require a power conferred in connection with an ex-Inland Revenue matter to be used only for an ex-Inland Revenue matter.
