Capital suggestion: Criminal Finances Act

On July 24, 2002, Elizabeth Alexandra Mary, the queen of England, gave royal assent to the Proceeds of Crime Bill 2002 (POCA), thereby making the bill an act of parliament. POCA “provides for the confiscation or civil recovery of the proceeds from crime and contains the principal money-laundering legislation in the UK”.

On April 27, 2017, Elizabeth Alexandra Mary gave royal assent to the Criminal Finances Act 2017, thereby making the bill an act of parliament. According to Roger Sahota, a criminal law specialist, the Criminal Finances Act 2017 “represents a radical overhaul of the Proceeds of Crime Act 2002 anti-money laundering and confiscation regime”.

In April 2016, the International Consortium of Investigative Journalists (ICIJ) leaked 11.5 million files “from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca”. In the aftermath of the Panama leaks, writes Sahota, “the [UK] government gave law-enforcement agencies new powers to seize suspected criminal property without bringing a prosecution. Two groups of individuals – politically exposed persons (PEPs) or those involved or associated with serious crime can be made subject to an unexplained wealth order (UWO)”.

Under the Criminal Finances Act 2017, in the case of politically-exposed persons, “no proof of a link to criminal behaviour is required. Orders for disclosure of the nature and extent of their interest in property and an explanation as to how they obtained it can be made by the high court where there are reasonable grounds for suspecting that a person holds assets disproportionate to their known income. Failing to comply with an order can mean that the property is deemed to be ‘recoverable’ for the purposes of the civil recovery provisions of Part 5 of POCA.”

On July 10, 2017, the Joint Investigation Team (JIT), which was set up by the Supreme Court to investigate corruption allegations on the family of PM Nawaz Sharif, submitted its final report. The report states: “…the JIT also investigated the acquired assets of the respondents and their interest therein [is] disproportionate to their known sources of income…”

The report, under the ‘conclusions’ section, states: “As per the afore-state detailed analysis, significant gap/disparity amongst the known and declared sources of income and the wealth accumulated by the respondent No 1, 6, 7 and 8 have been observed.” Volume X of the JIT report, pertaining to ‘Mutual Legal Assistance Requests’, has not been made public. There is evidence that international institutions – including the UK Central Authority and the International Criminality Unit of the Home Office – are closely monitoring the Panama leaks-related proceedings of the Supreme Court and the court-appointed JIT. According to the National Crime Agency (NCA), the UK’s national law-enforcement agency, “up to GBP 100 billion of tainted cash could be passing through the UK each year. Much of it ends up in real estate”. As part of the Criminal Finances Act 2017, there’s a provision for UWOs under which an individual or an offshore company “will have to explain the origin of assets that appear to be disproportionate to their known income” (note the similarity in the selection of words between UK’s Criminal Finances Act and the JIT report).

Under the UK law, the UWO “could also be applied to foreign politicians, or officials, or their associates. It would allow the authorities to take legal action against Russian oligarchs linked to Vladimir Putin who use London to ‘hide’ their money, and African dictators who invest millions outside their own countries”.

The writer is a columnist based in Islamabad. Email: farrukh15@hotmail.com. Twitter: @saleemfarrukh