The Serious Crime Act 2015 (SCA) fits into the government’s Serious and Organised Crime Strategy, and the changes to the Proceeds of Crime Act 2002 (POCA) are designed to ensure that law enforcement agencies have the powers they need to pursue, disrupt and bring to justice those engaged in organised crime. The amendments came into force on 1 June 2015, and apply to any confiscation order made after that date. The most significant changes are set out below. 1. Exercise of restraint powers Under the old regime, assets could only be restrained where there was reasonable cause to believe that an alleged offender had benefited from criminal conduct. This often delayed applications for restraint until a suspect was ready to be charged. The threshold has been lowered to reasonable grounds to suspect (s.40(2)(b) POCA), bringing the test in line with that required for arrest. To persuade a court to grant a restraint order, the prosecution will still need to show that there is a genuine risk of dissipation of assets. However, as we all know, with great power comes great responsibility. So while the prosecution may apply for a restraint order at an earlier stage, there is an enhanced duty on investigators to ensure that the case progresses expeditiously. The court’s power to discharge a restraint order, if proceedings for the offence are not started within a reasonable time, has been stiffened (s.41(7B)). In addition, a court may now require the applicant to update the court on the progress of the investigation. 2. Third-party interests Determination at first instance Under s.10A of POCA, a court considering making a confiscation order may now determine the extent of a third party’s interest in property held by the defendant – ‘likely’ to be realised to satisfy the order – at the time it makes a confiscation order. This represents something of a departure from the previous regime, under which third parties had no locus to make such representations until the enforcement stage. The court may make a determination only if it thinks it appropriate to do so. The Explanatory Note suggests two factors that may inform the question of whether such a determination would be appropriate: l First, it is envisaged that the crown court would only make such determinations in relatively straightforward cases l Second, the judge should consider their own experience, including in respect of property law, taking into account the nature of the property, and the likely number and complexity of any third-party interests If adopted by the courts, this guidance is likely to restrict the impact of the new provision. Nonetheless, proper use of s.10A should simplify matters at the enforcement stage in many of the more straightforward cases. A number of other sections of POCA have been amended or introduced to deal with the mechanics of this new exercise. They include s.16(6A), which requires the prosecutor’s s.16 statement include information relevant to the questions of (a) whether the court should make a s.10A determination and (b) what such determination should be. This is a real opportunity for the prosecutor to persuade the court to exercise its powers under section 10A. The more detailed the information set out in the s.16 statement, the more likely it is that the court will feel able to make a s.10A determination. The court can require further information from the prosecution. It is in the prosecutor’s interests, therefore, to front-load this work to avoid unnecessary delays. There are similar powers for the court to require the defendant – or a third party – to provide information it needs to make a s.10A determination (s.18A). This is an important tool to ensure that defendants, seeking to insulate assets from the confiscation regime through family or associates, do not abuse the determination procedure. The court may, for example, require further information from a third party to verify a defendant’s claim that they have an interest in property held by him. Non-compliance with such an order may cause adverse inferences to be drawn by the court. Finality of determination A court must not make a s.10A determination unless a party that hold(s), or may hold, an interest in the property has had a reasonable opportunity to make representations (s.10A(2)). This is particularly important, as an s.10A determination is conclusive of that issue in any proceedings taken to secure the realisation or transfer of the property to satisfy the order, subject to two limited exceptions: l Where a receiver has been appointed and the party in question has not previously been given a reasonable opportunity to make representations; and l Where it appears to the court that there would be a serious risk of injustice. The use of the exceptions is likely to be limited to circumstances where the party’s interest in the property only came to light after the court made its original determination 3. Compliance orders When making a confiscation order, the court must now consider whether to make a compliance order. In this regard, s.13A empowers a court to impose such order as it believes is appropriate, including against third parties, with no statutory limit as to duration or scope. The court is enjoined to consider, in particular, whether to impose any restriction on the defendant travelling abroad. The likely benefit of these orders is open to question, not least because POCA already includes a number of sanctions for non- compliance with the court’s order: the accrual of interest; the forced realisation of property; and, ultimately, the activation of a term of imprisonment in default. Further, an order prohibiting overseas travel, particularly if imposed indefinitely, seems highly likely to be challenged as a disproportionate interference with a defendant’s Article 5 right to liberty and his Article 8 right to respect for private and family life. 4. Time for payment S.11 of POCA reduces the maximum term for satisfaction of a confiscation order from 12 to six months, including extensions. Further, the court can now either set a deadline for satisfaction of the entire order – or specify individual periods – each of which relates to a quantified amount. Time for payment after the making of the order should be granted only where it is necessary to realise funds from a specific asset. 5. Default sentences The previous 12 tiers are reduced to four broad categories, as set out in the table below: These changes are intended to remove the incentives for defendants to choose to serve the default term, rather than satisfy the order. Further, defendants serving a default sentence for an order in excess of £10m will now no longer be released automatically at the halfway point. overview While we wait for the effectiveness of the new provisions to be seen, the intention behind them is clear. It is a toughening of the confiscation regime, which the government no doubt hopes will lead to an improvement in the rate of recovery of the proceeds of criminal conduct, both in terms of total amounts recovered and the time – and, hence, cost – taken to recover them.