The Economic Crime and Corporate Transparency Act 2023 will Pave the Way for a Stronger Fight Against Economic Crime

Craig MacKenzie
Craig MacKenzie

Published: November 3rd, 2023

7 min read

The Economic Crime and Corporate Transparency Act 2023 has received Royal Assent and, when in force, will implement a large number of changes aimed at fighting economic crime and other illegal activity.

One major reform in the Act is in relation to Cryptoassets and how they can be seized under amendments to the Proceeds of Crime Act 2002.

What are Cryptoassets?

Cryptoassets, also known as cryptocurrencies, are digital or virtual assets that utalise cryptography for secure transactions and to control the creation of new units. They are decentralised and operate on a technology called blockchain, which can make them resistant to manipulation and fraud. Examples of popular cryptoasets include Bitcoin, Ethereum, and Litecoin. These assets have gained in popularity and can be used for financial transactions, investment opportunities, and as a store of value.

Cryptoassets serve as a pseudo-anonymous, low-cost, and relatively quick method to move funds globally. There are low barriers to entry, users merely need an internet-connected device to transact with cryptoassets.

Given these characteristics, it is little surprise that this technology is increasingly popular and law enforcement are already investigating terrorist financing cases where cryptoassets have been used.

The NCA's National Strategic Assessment noted a particular acceleration in the criminal use of these assets during the pandemic.

Further, cryptoassets are one of only a few accepted payment mechanisms most used by cyber criminals demanding payment following a ransomware attack. These attacks are increasingly common and are said to pose a significant threat to the UK public and businesses.

The ability to move property quickly, across borders, without the need for standard banking services, and often to hold it anonymously, can make these assets attractive to those engaged in economic crime and terrorist financing.

What measures are being put in place?

The measures in the Act will:

  1. Improve the criminal confiscation powers in Parts 2, 3 and 4 of POCA in relation to cryptoassets. These reforms will: enable officers to seize cryptoassets during the course of an investigation without first having arrested someone for an offence; enable officers to seize cryptoasset-related items; and enable the courts to better enforce unpaid confiscation orders against a defendant's cryptoassets.
  2. Bring cryptoassets within the scope of civil forfeiture powers in Part 5 of POCA 2002. These powers would be simple and user friendly for law enforcement agencies.
  3. Ensure that forfeiture powers are accompanied by supplementary investigative powers in Part 8 of POCA, similar to investigatory powers that exist to support the forfeiture of cash, listed assets and funds in certain accounts.
  4. Mirror the civil forfeiture related powers in Part 5 and Part 8 of POCA into counter-terrorism legislation (Schedule 1 to the Anti-Terrorism, Crime and Security Act 2001 and Schedule 6 to the Terrorism Act 2000) to provide sufficient flexibility to be able to suppress the risk that cryptoassets become increasingly used for terrorist purposes.

These new powers will be used alongside extensive new money laundering provisions. We will be carefully assessing the scope of these new powers and monitoring how police and prosecuting authorities propose to respond.

Our lawyers have an intimate understanding of confiscation powers and should be consulted as soon as possible if you are being investigated or prosecuted for any crime that might result in an application under the Proceeds of Crime Act 2002.

How can Forbes Solicitors help?

The criminal and civil law in relation to the alleged proceeds of crime is complex and difficult, that is why it requires specialist advice from the very start. At Forbes we have a Specialist Department, which deals exclusively with both Criminal and Civil cases.

Forbes Solicitors is different if not unique. We have an expert team that deals exclusively with financial claims made by the State and public agencies. Those claims may follow a prosecution or increasingly Civil proceedings against a client and often with little or no notice.

The department works with our Commercial, Business Crime, Crime and Regulatory departments, providing specialist advice to clients. We pride ourselves in our specialism and are regularly able to provide a comprehensive in-house service. Our reputation extends this service on a national basis. We act for and advise individuals, commercial organisations and limited companies "suspected", "accused" or "convicted", together with anyone caught up in somebody else's wrongdoing, to protect innocent people's property rights. Where necessary and appropriate, specialist Barristers and Forensic Accountants are instructed.

What can we do?

  • Account and Asset Freezing Orders, establishing why orders may have been made, how to remedy and challenge, to include the wide-ranging provisions under the Criminal Finances Act 2017 (worldwide orders and unexplained wealth)
  • Representation and advice in both Criminal interviews under caution and Civil interviews with investigating authorities.
  • Restraint Orders, the release of funds, challenges to necessity and the reasonable cause required to make such orders. Third party interest applications by partners, spouses and others.
  • Establishing an evidential audit trail of legitimate acquisition of property and assets as quickly as possible
  • Advice and Representation in Cash seizure and Forfeiture Applications. Preparation of mutual exchange bundles of civil evidence.
  • Preparation and Representation in POCA Confiscation proceedings. Factual determination of what happened, what was "obtained" if anything at all, that represents criminal property. Bases of Plea and their relevance. The capacity to "obtain" and profit/turnover arguments. Full restitution submissions. Legitimate business activity in breach of Regulatory compliance. The risks of Double Recovery and evidential Apportionment in multiple defendant cases. Dealing effectively with the Assumptions under POCA and how to challenge evidentially and legally. Expert valuation of assets and the use of comprehensive Legal Submissions to counter prosecution assertions. Dealing with allegations of "Tainted Gifts" and "Hidden Assets". Proving the existence of beneficial Trusts (Constructive and Resulting) to protect the property of innocent third parties, including matrimonial property adjustment rights. Establishing the Court's discretion to make such orders as opposed to its' mandatory requirement to do so. Intervening and representing Third Party clients in another's criminal case (owning or non-owning spouse or cohabitee, business partners, company directors, creditors and trustees).
  • Enforcement proceedings in the Magistrates Court for non-payment of POCA orders, challenges to default sentences of imprisonment. Applications to extend time to pay (s11), to reduce orders (s23) and challenge orders to increase the amount to pay (s22) in the Crown Court and where relevant the High Court. Dealing with the appointment of Enforcement Receivers.
  • Appeals to the Court of Appeal

If you would like to discuss any aspect of your case, please contact Craig MacKenzie, Partner and Head of the High-Profile & Private Crime Division.

For further information please contact Craig MacKenzie

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