POCA dealt a serious blow

Posted: 8th August 2012

EurosThe Supreme Court has dealt a major blow to law enforcement agencies seeking to recover criminal assets held abroad.

In a case decided in July, Mr Israel Perry, who was convicted of a serious fraud in Israel and had been sentenced to 12 years in prison, appealed against orders requiring him to disclose his assets and freezing them. He and his family were later discovered by the Serious and Organised Crime Agency (SOCA) to have more than £14 million in assets in London and more assets outside the UK. They were subsequently ordered to disclose their assets worldwide.

Under The Proceeds of Crime Act (POCA) the Police are empowered to seize assets 'wherever situated' which are believed to have been the result of criminal activity. The burden of proof in such cases is the civil (balance of probabilities) burden, not the 'beyond reasonable doubt' test that is applied in criminal cases.

Freezing orders were granted against the worldwide assets of the Perry family and these were appealed by them all the way to the Supreme Court. They argued that POCA only empowers an order to be made against assets held in England, Wales or Scotland.

The Supreme Court has accepted their argument, concluding by a majority that 'wherever situated' cannot apply extraterritorially given the way POCA is drafted.

It is clear that the POCA will need to be amended to rectify this. In the meantime, the worldwide disclosure and freezing of they Perry family's assets has been overturned and replaced by an order that only covers assets held in England,Scotland and Wales.