A combination of the prevailing UK legislation and generally accepted practices dictate that in the vast majority of confiscation cases, assets seized under PACE or POCA, even those seized utilising the powers given under Section 47 of POCA, are often held in storage for extended periods of time, suffering unnecessary depreciation. Assets seized under Section 47 of POCA are also seized and Therefore, if the defendant refuses permission or the court orders the sale, thousands of depreciating assets across the UK continue to haemorrhage value which results in frustrated law enforcement staff watching on, powerless to stop the rot.
It is often quoted that that you can’t sell assets at the beginning of an investigation as the owner hasn’t even been charged, but how fair is it to an acquitted defendant, who had a 1-year old Audi seized, to then later receive the same car back but it has now halved in value? Does the current model serve to protect the best interests of all parties concerned or is there a better way of doing things that protects the defendants’ rights and also maximises the return to the Home Office and victims?
Other countries such as Belgium and The Netherlands (to name a few) utilise a model whereby particular seized assets (subject to a set of conditions) are often sold in a matter of weeks to maximise the return and capture the value. Once the asset is sold, the proceeds are held in an interest-bearing account pending the result of the case. It’s worth noting that the strict conditions result in most depreciating assets (excluding assets of sentimental value etc.) can be sold expeditiously thus capturing the value for the defendant (if acquitted) and for the state (if convicted). This model has run very successfully and continues to do so, therefore, why wouldn’t the UK adopt a similar approach? Some forces partner with private sector companies to try and store assets as professionally as possible but no one can stop the steady downward march of depreciation.
Fig 1(right) - Depreciation of an Audi RS4 using industry valuation figures – the vehicle was seized under PACE and stored for 21 months until permission to sell was achieved
In this example there is an effective loss of £20,000.00, or 40%, to the public purse because of the delay in bringing the asset to market. Extrapolating this across the vast number of seized assets results in millions of pounds being lost as well as the opportunity for agencies or particular units to become self-funding.
If the UK were to adopt the new model, the following benefits could be seen:
1. Increased funding for future law enforcement activity via ARIS
2. Greater compensation for victims
3. Increase in asset recovery effectiveness (one could also assume that future FATF reviews would reflect this positive change too)
4. Lower risk of litigation – acquitted defendants receive full value for their assets
A common UK practice used in some regions includes obtaining a restraint order and leaving the assets in the custody of the defendant. In our experience this is often ineffective and at worst contradictory, particularly when concerning high value vehicles. How can an agency or force, execute a warrant, seize assets but entrust the high value (usually more complicated) asset to the care of the very person they are alleging of a criminal offence? The restraint order is sought from the court to “prevent the dissipation of assets” and yet we’ve seen countless examples of restrained assets, in the defendants custody, reported lost or stolen due to a “burglary” and the asset has gone from the jurisdiction forever.
There is no doubt that excellent work is being carried out across the country with dedicated units, such as the Asset Confiscation Enforcement (ACE) teams, obtaining permission to sell seized assets but they are usually instructed to act many years after the initial seizure and the depreciation has already occurred. What changes could be implemented that would increase Home Office receipts that would also benefit both the defendant, prosecution and taxpayer alike? What more can be done to fundamentally change the UK approach to seized assets and deal with them at a much earlier stage thus stemming the flow of millions of pounds being lost every year?
A change to adopt some internationally accepted best practice in asset management would certainly be a step in the right direction and go a long way to making crime pay.