The Proceeds of Crime Act 2002 (External Investigations) Order 2013

EXPLANATORY NOTE

(This note is not part of the Order)

This Order makes provision to assist an external investigation, within the meaning of section 447(3) of the Proceeds of Crime Act 2002 (c. 29) (“the 2002 Act”), by obtaining orders and warrants from the court. The provisions correspond (subject to specified modifications) to the civil recovery investigation provisions in Part 8 of the 2002 Act. Overseas requests to investigate that are criminal in nature will continue to be dealt with through the provisions in the Crime (International Co-operation) Act 2003 (c. 32). This Order extends to England and Wales, Scotland and Northern Ireland.

Articles 3 and 4 provide that the Secretary of State may refer a request in relation to an external investigation to the Director General of NCA or a relevant Director to provide assistance. The external investigation will concern property only where a criminal investigation in connection with the property has not begun, or a criminal investigation in connection with the property has begun but it is unlikely criminal proceedings will be brought, or criminal proceedings brought in connection with the property have been concluded without an order having been made in relation to the property.

Article 5 provides for offences of prejudicing an external investigation. This broadly corresponds to section 342 of the 2002 Act. The article makes it an offence to prejudice an external investigation by making a disclosure about it or by tampering with evidence relevant to the external investigation.

Articles 6 and 7 provide for production orders. These broadly correspond to sections 345 and 346 of the 2002 Act. An application for a production order may be made by an appropriate officer; article 2(1) provides the meaning for an appropriate officer.

Article 8 provides for an order to grant entry. This broadly corresponds to section 347 of the 2002 Act. This power might be used, for example, to enable an appropriate officer to be granted entry to a building in circumstances where a production order had been made in respect of material in a particular office in that building.

Article 11 extends the scope of a production order to cover material held by an authorised government department. This broadly corresponds to section 350 of the 2002 Act.

Article 12 provides that an application for a production order or an order to grant entry may be made without notice to the other party. This broadly corresponds to section 351 of the 2002 Act.

Article 13 provides for search and seizure warrants. This broadly corresponds to section 352 of the 2002 Act. As in articles 6 and 7 an application for a warrant may be made by an appropriate officer. A warrant may be issued if a production order has been made and not complied with and there are reasonable grounds for believing that the material specified in the warrant is on the premises, or the requirements of article 14 are met.

Article 14 refers to two sets of conditions for issuing a warrant in the absence of a production order. This broadly corresponds to section 353 of the 2002 Act. The first set of conditions might be satisfied, for example, where the person who owns the material is abroad and therefore it is not possible to communicate with that person. In such circumstances, it is clear that a production order in respect of that person would have no effect. The second set of conditions might be satisfied where it is impossible to describe the material for the purposes of a production order and access will not be gained without a warrant.

Article 15 sets out provisions regarding how and when a warrant issued by a High Court judge may be exercised. This broadly corresponds to sections 354 and 356 of the 2002 Act. A High Court judge may make the warrant subject to such conditions as the judge sees fit.

Article 16 provides for disclosure orders. This broadly corresponds to section 357 of the 2002 Act. Unlike the other orders covered by this Order, which have to be applied for separately on each occasion, once a disclosure order has been made there is a continuing power of investigation. A person may require that evidence of the authority to exercise disclosure powers is provided. Where this happens, it is envisaged that a copy of the disclosure order will be given to the person.

Article 17 provides for the requirements for the making of a disclosure order. This broadly corresponds to section 358 of the 2002 Act. Owing to the necessarily invasive nature of the disclosure order, it is not anticipated that disclosure orders will be sought unless other powers, such as production orders, have already been sought or would demonstrably not suffice to enable the required information to be obtained.

Article 18 provides for offences in relation to disclosure orders. This broadly corresponds to section 359 of the 2002 Act. As the disclosure order obliges a person to comply with certain requirements, sanctions to compel such compliance are required. There is a maximum penalty of six months imprisonment and/or a level 5 fine for non-compliance and two years imprisonment and/or an unlimited fine for knowingly or recklessly making a false or misleading statement.

Article 19 provides for statements in response to a disclosure order. This broadly corresponds to section 360 of the 2002 Act. The article prevents a statement obtained under compulsion from a person from being used to incriminate them in this jurisdiction (subject to exceptions).

Articles 20 and 21 set out further provisions regarding disclosure orders. These broadly correspond to sections 361 and 362 of the 2002 Act.

Article 22 provides for customer information orders. This broadly corresponds to section 363 of the 2002 Act. A customer information order requires all (or a targeted sample of) banks and other financial institutions to provide details of any accounts held by a person who appears to hold property that is subject to an external investigation. Article 28(6) requires in certain circumstances the prior authorisation of a senior appropriate officer before an appropriate officer can make an initial or variation application for a customer information order. An appropriate officer who is also a senior appropriate officer can apply for the order and variations themselves without requiring further and separate authorisation. As with disclosure orders, a person may require the person serving a notice given under the order to demonstrate that they have the authority they claim. Again, it is envisaged that a copy of the original customer information order will be provided.

Articles 23 and 24 set out the definition of “customer information” for individuals and for companies and partnerships and the requirements for the making of such an order. These broadly correspond to sections 364 and 365 of the 2002 Act.

Article 25 provides for offences in relation to customer information orders. This broadly corresponds to section 366 of the 2002 Act. As with the disclosure order, there are two offences connected with customer information orders. As the sanctions are directed at non-complaint institutions rather than an individual they are solely financial. The maximum penalties are a level 5 fine for non-compliance and an unlimited fine for knowingly or recklessly making a false or misleading statement.

Article 26 provides for statements in response to a customer information order. This broadly corresponds to section 367 of the 2002 Act. Like the disclosure order, a customer information order requires an institution to divulge information. This article sets out the standard conditions on the use of such information to prevent information obtained under compulsion from being used in this jurisdiction against the financial institution in criminal proceedings against it (subject to certain exceptions).

Articles 27 and 28 set out further provisions in relation to customer information orders. These broadly correspond to sections 368 and 369 of the 2002 Act.

Article 29 provides for account monitoring orders. This broadly corresponds to section 370 of the 2002 Act. An account monitoring order requires a financial institution to provide specified information in relation to an account (for example, details of all transactions passing through the account) during a specified period up to a maximum of 90 days. The information would normally be provided in the form of a bank statement.

Article 30 sets out the requirements for the making of an account monitoring order. This broadly corresponds to section 371 of the 2002 Act. It is anticipated that it will need to be shown that an account monitoring order lasting over a period of time (rather than a one-off production order) is necessary.

Article 31 provides for statements in response to an account monitoring order. This broadly corresponds to section 372 of the 2002 Act. As with the disclosure order and customer information order, an account monitoring order compels an institution to divulge information. Similar to the provisions for disclosure orders and customer information orders, this article sets out the standard conditions on the use of such information to prevent self-incriminatory information being used as evidence in criminal proceedings in this jurisdiction against the financial institution (subject to certain exceptions).

Articles 32 to 34 set out further provisions relating to account monitoring orders. These broadly correspond to sections 373 to 375 of the 2002 Act.

Articles 36 to 69 make equivalent provision for Scotland to that in articles 2 to 35 for England and Wales and Northern Ireland.

Article 70 sets out the functions that seconded constables in Scotland cannot exercise on behalf of Scottish Ministers. This corresponds to section 411 of the 2002 Act.