A short UK history of confiscating criminal assets

Taking the goodies away from the baddies

In the olden days, by which I mean before 2003, the criminals kept all the money. The Proceeds of Crime Act, 2002, was revolutionary. It defined ‘being a criminal’ and offered five different ways to do asset recovery and, most importantly, it worked in practice. Tens of thousands of criminals have lost billions of pounds. Asset recovery, by the way, is a general term for the confiscation or forfeiture of assets connected to crime. The POCA (UK) was based on a similar law, with the same title, passed in Ireland in 1997.

Modern confiscation in the UK can be divided into three main periods lasting about 15 years each. From 1971 to 1986 (instrumentalities only), 1986 to 2002 (direct proceeds), 2003 to 2018 (direct, indirect and criminal lifestyle proceeds).

The modern era started with the Misuse of Drugs Act, 1971 which allowed for drugs and drug paraphernalia to be forfeit. The equivalent power in non-drugs cases to forfeit the instruments used to commit crime was the 1973 Power of Criminal Courts Act 1973. Items of value were forfeit to the police, this included cash.

This era came to an end with Operation Julie, the first major case against illegal drug manufacture in the UK. Arrests in 1977 led to a failed attempt in 1981 to confiscate about a £1m - the proceeds of crime. Sir Derek Hodgson's Committee recommended better law and the result was the Drug Trafficking Offences Act 1986, and the Criminal Justice Act 1988. These laws resulted in the first professional police financial investigation teams (first called Drug Desks) and commensurate training, equipment and skills.

For the next fifteen years considerable efforts were made to try and make the law work, in particular the focus moved from the mere instrumentalities to the proceeds of crime. The law was tweaked using the Proceeds of Crime Act 1993, the Drug Trafficking Act 1994, and the Criminal Justice Acts of 1993 and 1996. None of it worked, the average annual receipts of all UK agencies combined (not including Scotland) were just £15m per year according to the UK Home Office.

A rise in reported crime throughout the 1980s and 1990s meant that crime was high on the agenda of the new government elected in 1997. This coincided, importantly, with the passing of the Proceeds of Crime Act in Ireland, which provided a model for the UK. The result was the Prime Minister's Performance and Innovation Unit report in 2000, which presaged the Proceeds of Crime Act, 2002. Over the next ten years the average annual receipts leapt to £130m. Tens of thousands of criminals lost their assets and a true profession of statutorily ‘Accredited’ Financial Investigators was born. Specialist prosecutors in the UK and at British overseas missions created a global capacity to ‘follow the money’ and confiscate it.

Asset recovery continued to rise until 2018, but it now appears to be reaching a plateau if not falling. Criminal justice agencies have been among the worst affected by ruthless cuts to public services in the UK. It is too early to say for sure, but we appear to be entering a different era, where the constant rise in value of confiscated assets cannot be assumed and crime is being allowed to pay again.