Sponsored feature Enforcing Confiscation Orders Confiscation Orders are the primary tool to strip criminals of their assets, recover their criminal proceeds and disrupt and deter criminality. It is encouraging to see that local authorities are proactively seeking the recovery of the proceeds of crime; statistics show that the number of 1 Confiscation Orders, obtained by local authorities, has grown year on year since 2009 . Collection rate of Confiscation Orders Whilst successfully obtaining a Confiscation Order can be a challenge in itself, it may only be half the battle. The recovery process does not stop at the confiscation stage. According to the National Audit Offices December 2013 report, the overall collection rate for Confiscation Orders was 41%. However, whilst orders under 1,000 see a collection rate of almost 90%, recoveries drop significantly in higher value cases, with only 18% of orders over 1 million being collected2. With the NAO estimating a cumulative figure of 1.46 billion outstanding from Confiscation Orders as of September 2013, there is still some way to go to ensure that crime does not pay. Appointing a Receiver can benefit enforcement action in the following ways: it reduces the reliance on the defendant; an Enforcement Receiver can be empowered to execute documents on behalf of the defendant; a Receiver will have resources available to speedily safeguard assets and market them for sale; a Receiver will be experienced in litigating spurious ownership claims by third parties; and a Receiver will arrange appropriate insurance cover; the defendants cover is likely to be unreliable if a criminal conviction has not been disclosed or property care/security is ignored. The Proceeds of Crime Act 2002 Local authorities The Proceeds of Crime Act 2002 (POCA) allows for the appointment of an Enforcement Receiver to enforce asset recovery. Receivers can benefit cases where offenders are uncooperative or when there are valuable assets and value could be lost. Local authorities have had to endure budget cuts since 2010 and with further cuts on the horizon an Enforcement Receiver can remove the recovery burden whilst assisting with the return of monies to your area. Your local authority may have an outstanding Compensation Order which will only be settled following recovery action. Local authorities benefit via the Asset Recovery Incentivisation Scheme whereby monies recovered (after payment of compensation and Receivership costs) are divided between the agencies involved. 50% is allocated to the Home Office, 18.75% to the prosecuting body, 18.75% to the investigating unit and 12.5% to HM Courts & Tribunals Service ( HMC&TS ). Hence in some cases a local authority may expect to receive more than a third of the net funds paid to HMC&TS where it investigates and prosecutes a crime. Under section 50 of POCA, an Enforcement Receiver can be appointed if (i) a Confiscation Order has been made, (ii) the Confiscation Order remains unpaid and (iii) the Confiscation Order is not subject to an appeal. An Enforcement Receiver is an officer of the Court appointed on the application of the prosecutor to realise a defendants assets to satisfy his or her Confiscation Order. Acting independently of the prosecution and the defendant, the Enforcement Receiver is granted sufficient powers to sell the assets of the offender. Private sector Receivers, usually Insolvency Practitioners, bring specialist skills and experience that may not be generally available in the public sector. Although an Enforcement Receiver is appointed on the application of the prosecutor, their costs are not borne directly by the prosecuting body but are paid out of realisations passed to HMC&TS. Sarah Hewitt Assistant Manager T +44 (0)207 728 2516 E sarah.l.hewitt@uk.gt.com Sarah is an Assistant Manager in the Proceeds of Crime Team at Grant Thornton UK LLP with over 9 years experience of asset recovery matters. 1 David Ingram Partner T +44 (0)207 865 2367 E david.ingram@uk.gt.com David heads Grant Thornton UK LLPs Proceeds of Crime Team and has over 15 years experience in this sector. David is a panel member for Receivership appointments requested by the CPS, NCA and SFO. Based on information obtained from HMC&TS in response to a Freedom of Information Act request. 2Figures from the National Audit O ces December 2013 report. 2015 Grant Thornton UK LLP. All rights reserved. Grant Thornton means Grant Thornton UK LLP, a limited liability partnership. Grant Thornton UK LLP is a member firm within Grant Thornton International Ltd (Grant Thornton International). Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered by the member firms independently. This publication has been prepared only as a guide. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material in this publication. grant-thornton.co.uk