Gary Pons wrote for Lexis PSL on the recent case of R v Moss. The full article can be read below:
In the case of R v Moss [2019] EWCA Crim 50, the Court of Appeal considered the requirements that need to be satisfied before a Crown Court issues a certificate under the Criminal Justice and Data Protection Regulations of 2014 (“2014 Regulations”), which allows for the recognition and enforcement of a confiscation order abroad. In particular, the Court of Appeal considered whether a certificate can be issued in respect of a confiscation order made before the 2014 Regulations came into force and whether it is necessary for the property in question to be the proceeds of an offence?
Background
The Crown Court made a confiscation order to the sum of £1,433,753.24 in March 2008. It determined that Mr Moss benefited from his general criminal conduct to the amount of £4,357,822; this was subsequently reduced by the Court of Appeal to £2,207,822.22. In making the confiscation order the Crown Court determined that a property in Spain was part of Mr Moss’ available amount. The Spanish property was included in the schedule of assets that formed part of the confiscation order; it did not, however, form part of the benefit figure.
Mr Moss paid a total of £741,730 towards the confiscation order, leaving £692,023.24. The Spanish property was not sold and remained available to be used to pay the confiscation order. The prosecution applied for a certificate which would allow for the recognition and enforcement in Spain, of the confiscation order in relation to the Spanish property. The Crown Court granted the certificate and Mr Moss appealed against that decision.
The Grounds of Appeal
There were two grounds of appeal, both focused on the language of reg 11 of the 2014 Regulations:
- reg 11 required the application for a certificate to be made during the confiscation proceedings and not retrospectively;
- reg 11 clearly required that the Spanish property was the proceeds of an offence, whereas it was not, it was clean property.
The 2014 Regulations 2014 and the 2006 Framework Decision
The 2006 Framework Decision provides for the application of the principle of mutual recognition to confiscation orders. Recital 1 stresses that the principle of mutual recognition should become the cornerstone of judicial cooperation in both civil and criminal matters within the Union.
The 2014 Regulations were made by exercise of the powers conferred by s 2(2) of the European Communities Act 1972, in order to give effect to the 2006 Framework Decision. They came into force on 3 December 2014.
Regulation 11 of the 2014 Regulations provides:
- If any of the property to which an application for a domestic confiscation order relates is property in a Member State other than the United Kingdom, the prosecutor may ask the Crown Court to make a certificate under this regulation.
- The Crown Court may make a certificate under this regulation if—
- it makes a domestic confiscation order in relation to property in the other Member State, and
- it is satisfied that there is a good arguable case that the property—
- was used or was intended to be used for the purposes of an offence, or
- is the proceeds of an offence.
Regulation 3(2) provides for the interpretation of terms used in the 2014 Regulations:
(b) property used for the purposes of an offence includes a reference to property part of which has been used for those purposes;
(c) the proceeds of an offence or criminal conduct includes a reference to—
(i) any property which wholly or partly, and directly or indirectly, represents the proceeds of an offence (including payments or other rewards in connection with the commission of an offence); and
(ii) any property which is the equivalent to the full value or part of the value of the property specified in paragraph (i).
What approach did the court take to its interpretation of the 2014 Regulations 2014 and the 2006 Framework Decision?
The 2014 Regulations were made in order to give effect to the 2006 Framework Decision. A court which is being asked to interpret the 2014 Regulations must do so in a way that seeks to fulfil the wording and purpose of the Framework Decision (see In Criminal Proceedings against Pupino, Case C-105/03, [2006] QB 83).
The court considered the following Conventions which relate to the Proceeds of Crime: 1988 Vienna Convention, 1990 Strasbourg Convention and 2005 Warsaw Convention. These Conventions recognise that there exist different methods and systems of confiscation across Member States. One of which is the value-based system which operates in the UK, another of which is a property-based system which orders the confiscation of property which is the proceeds of crime. The Conventions were designed to place the two systems on an equal footing, to allow the mutual recognition of both types of confiscation order.
In relation to the question of whether an application for a certificate needs to be made at the time a confiscation order is made, or whether it can be made retrospectively, the court accepted that the language was all in the present tense but determined that this was not crucial. The court relied on the following factors:
- The 2014 Regulations are not concerned with the circumstances in which the confiscation order was made. They are directed at its enforcement. Retrospectivity is based on fairness. It would not be unfair to enforce an order which itself was made before the Regulations.
- There are a number of practical reasons which point to a certificate being needed after the confiscation order is made, eg:
- where a confiscation order is varied, pursuant to the provisions of ss 21 or 22 of the Proceeds of Crime Act 2002 (POCA);
- where it is not thought that a certificate is needed at the time the confiscation order is made, because, for example, time to pay has been given to the defendant.
- Finally, reg 11 must be read in a way so as to give effect to the 2006 Framework Decision. This demands an interpretation that is consistent with allowing a court to grant a certificate after the confiscation order was made, even if it was made before 2 December 2014.
The second ground raised related to the fact that the Spanish property had not been determined by the Crown Court to be part of the benefit figure. It was accordingly, not the proceeds of an offence. Regulation 11(2)(b) required the Crown Court to be satisfied that there was a good arguable case that the Spanish property was the proceeds of an offence. This could only mean that the 2014 Regulations did not permit the recognition of a confiscation order that related to ‘clean property’.
The Court of Appeal relied on two strands of reasoning to reject this argument. Firstly, that the principle of mutual recognition applies equally to value-based confiscation orders as to property-based confiscation orders. The amount of a value-based confiscation orders will often be based upon the value of property that is not the proceeds of crime. That is plain from the definition of the available amount in s 9 of POCA. Accordingly, the 2006 Framework Decision intended to provide for the enforcement of confiscation orders in respect of clean property. The 2014 Regulations, and in particular regs 11 and 3, are to be given a similar meaning because they are seeking to give effect to the 2006 Framework Decision.
On a narrower basis the Court determined that the definition of proceeds of an offence contained within reg 3(2)(c) extended to clean property. Its reasoning was that the available amount may not exceed the value of the benefit figure and accordingly if property is included in the available amount it is equivalent to the value of property that has been obtained through criminal conduct. There is no need for the prosecution to engage in a tracing exercise demonstrate the particular properties link to crime.
What are the questions practitioners dealing with assets located on the continent should bear in mind for the purposes of confiscation proceedings?
It is now commonplace for all prosecutor’s statements in confiscation proceedings to include a reference to the 2014 Regulations. In many cases the prosecution will ask the court to make a certificate at the time of making the confiscation order. Practitioners dealing with cases where there are assets located in a Member State should be aware of these provisions. They should pay particular attention to the fact that reg 11 appears to be directed at particular items of property rather than at the confiscation order itself.
What are the practical implications arising from this judgment?
This will very much depend upon Brexit. The Withdrawal Agreement of 25 November 2018 which has been negotiated between the UK Government and the EU but not approved by Parliament, provides at Article 62 that the Council Framework Decision 2006/783/JHA (the 2006 Framework Decision) shall continue to apply in respect of confiscation orders received before the end of the transition period.
In the event of a ‘No Deal’ Brexit the Draft Law Enforcement and Security (Amendment) (EU Exit) Regulations 2019 which have not yet been made, presently propose that the Criminal Justice and Data Protection (Protocol No. 36) Regulations 2014, SI 2014/3141 (the 2014 Regulations) relating to the mutual recognition of confiscation orders will be revoked (reg 110).
In the event that the 2014 Regulations continue to apply, this decision will assist prosecuting authorities in enforcing confiscation orders abroad. In particular, it facilitates the recognition and enforcement of orders relating to property which the Crown Court has determined forms part of the defendant’s available amount.
Gary Pons was junior counsel for the appellant in the case of Moss. Gary is ranked in Chambers and Partners as a band 3 leader in the field of POCA and Asset Forfeiture work (all circuits) and is also ranked as a band 6 leader in the field of criminal law (London Bar).
Chambers and Partners 2018 says Gary: "handles serious confiscation cases and is an expert on cash forfeiture. He is praised for his fluency in Spanish, which comes in useful when he is handling multi-jurisdictional cases involving Spanish-speaking countries."
