The Assets Recovery Agency (ARA) of the United Kingdom was established under the Proceeds of Crime Act 2002 (POCA) and became operational in February 2003. It is a Non-Ministerial Department. ARA's Director reports to the Home Secretary, but is operationally independent. ARA aims to disrupt organised criminal enterprises through the recovery of criminal assets, and also aims to promote the use of financial investigation as an integral part of criminal investigation.
The Agency's remit is to reduce crime by:
- supporting the Police, HM Revenue and Customs (HMRC), the Serious Organised Crime Agency (SOCA) and other agencies in financial investigations, by providing specialist training and advice;
- investigating cases leading to post-conviction confiscation orders and/or applying for such orders;
- enforcing certain confiscation orders;
- using a power of 'civil recovery' - suing in the High Court for the recovery of the proceeds of unlawful conduct;
- using powers of taxation where the Director has reasonable grounds to suspect that there is income, gains or profits that are chargeable to the relevant tax and which results from criminal conduct. The Director then carries out the tax functions that HMRC would ordinarily carry out. This is not just limited to the proceeds of criminal conduct but extends to all of the person's property. The only difference between the Director and the HMRC is that when the Director is carrying out his taxation functions the source of income does not need to be identified.
The Agency will normally take on cases only on the basis of referral from the Police, HMRC (Customs), SOCA and other law enforcement agencies according to agreed criteria.
In addition to the above roles the Agency's Financial Investigation Centre of Excellence provides for the training and accreditation of investigators who specialise in tracing criminal assets and other areas of financial investigation.
On 16 January 2007, the Government introduced the Serious Crime Bill to Parliament setting out Government proposals to merge the operational elements of the Assets Recovery Agency with the Serious Organised Crime Agency (SOCA) which was established in 2006, and the Agency's training and accreditation functions with the National Policing Improvement Agency (NPIA). It will also extend to certain prosecutors the power to launch civil recovery action under the Proceeds of Crime Act 2002. The merger is likely to be completed by April 2008. Until then ARA will continue to operate as before and use its powers to the full in proceeding to complete existing cases and adopt new cases for future action.
Enforcement
Under the Proceeds of Crime Act 2002 the Assets Recovery Agency was granted the powers to enforce its own cases, whether these be criminal, civil and tax. The Agency has adopted a mixed approach to enforcement, i.e. use of in-house and out-sourced resources, e.g. auctioneers, valuers, High Court Enforcement Officers etc. In some cases it will not be possible to enforce in-house and a receiver will need to be nominated to act as Trustee (civil) or Director's Receiver (criminal) on ARA’s behalf. This will mainly be in cases where there are significant overseas interests, business(es) to be managed, multiple tenanted properties etc.
If part of the recoverable property is cash this will be transferred directly into ARA’s recovered assets account. For assets consisting of property e.g. vehicles, houses, jewellery etc. they will generally be sold publicly.
Civil Recovery
The Agency works to recover assets which are, or represent, property obtained through unlawful conduct in England, Wales and Northern Ireland. This is done through the High Court. In Scotland, this power is exercised by the Civil Recovery Unit of the Crown Office.
If a case is to be considered for adoption for civil recovery, it must meet the following criteria:
- The case must normally be referred by a law enforcement agency or prosecution authority.
- Criminal prosecution must have been considered and either failed or proved impossible to complete.
- Recoverable property must have been identified and have an estimated valued of at least £10,000.
- Recoverable property must include property other than cash or negotiable instruments (although cash is recoverable if it is in addition to other property).
- There must be evidence of criminal conduct that is supported to the civil standard of proof, i.e. on the balance of probabilities.
In addition, the potential impact of successful civil recovery action in terms of crime reduction must be considered.
Taxation
The Agency also conducts tax investigations throughout the UK, according to the terms set out in the Proceeds of Crime Act 2002. In such cases the Director of the ARA must have reasonable grounds to suspect that an individual has income, gain or profit as a result of either their own criminal activity or that of another person. The Director then assumes the role of HM Revenue & Customs (HMRC) to carry out a full investigation. This role also extends to corporation tax where profits arise from a company’s or another person's criminal conduct.
