It’s a problem we are all familiar with; you are a successful international business person travelling into the UK with some cash in connection with your next project. You are stopped at the border and a Border Force official finds the cash (e.g. currency, postal orders, cheques, bankers drafts or bearer bonds) and decides to seize it under section 294(1) of the Proceeds of Crime Act 2002 (“POCA”) because he or she has “reasonable grounds for suspecting it is recoverable property or intended … for use in unlawful conduct”.
The Court Process
You are then expected to attend the local Magistrates Court for a hearing within 48 hours of the initial seizure (section 295 POCA – weekends and bank holidays don’t count) where the Magistrates usually find that the “continued detention [of the cash] is justified while its intended use is further investigated or consideration is given to bringing proceedings against any person” (section 295(6)).
The matter is often then subject to other hearings, often over the course of several months or years, when the further or continued detention of the cash is allowed while the authorities conduct their investigations, until either they return the money (or such part of it as is determined not to be suspected of being recoverable property or intended for use in unlawful conduct (section 296(2) POCA)) or they make an application for the forfeiture of the cash (using the prescribed “Form G”) under section 298 POCA.
If consideration is being given to criminal proceedings (i.e. for money laundering offences) any cash forfeiture will usually be “stayed” or adjourned until the criminal case has been concluded. Even if the authorities decide not to prosecute (usually because there is insufficient evidence to give a reasonable prospect of a conviction), the civil forfeiture can still go ahead as those proceedings involve the lower “standard of proof”, i.e. the balance of probabilities rather than beyond reasonable doubt.
Preparation for Trial
The matter will be listed for hearing, initially for directions – setting a timetable for the exchange of evidence (witness statements and documents) and agreeing a “Trial Bundle” of relevant material and making arrangements, if necessary, for interpreters – and then for the final hearing when the Court is required to determine whether the cash is “recoverable property or intended for use by any person for use in unlawful conduct” (section 298(2) POCA).
The Contested Hearing
At the trial it is for the body asking for the money to be forfeit, usually the Border Force, NCA or Police (the “Applicant”), to show on the balance of probabilities, i.e. that it is more likely than not (section 240(1)(b) POCA), that the cash was “recoverable property or intended … for use in unlawful conduct”.
The Applicant must identify the particular type (or types) of criminal conduct alleged (Angus v UKBA (2011)), but the Court is entitled to consider any previous convictions of the individuals involved, and any inferences which can properly be drawn from the circumstances, e.g. that someone has a large sum of cash at an airport or port, the cash had unusually high levels of contamination with drugs, or is in high denomination notes (apparently the €500 note is so popular with criminal organisations that it is being phased out later this year), that the person lied or refused to give any explanation at the time of the initial interception or during the investigation or that the person’s financial circumstances do not “fit” with them having such a quantity of cash.
A final sting in the tail is that, if the Applicant is successful and the Court orders the forfeiture of the cash, the individual will be ordered to pay the Applicant’s costs of the proceedings which can be several £1,000s and cannot simply be taken from the forfeit cash!
However even if the Applicant is unable to show that the money is forfeit (i.e. the Court finds that the individual had a legitimate reason for having the money and the cash itself was not connected with criminal conduct), the Applicant is entitled to rely upon the case of Perinpanathan v Westminster Magistrates Court (2010) which says that, while the Court has a discretion to award costs, unless the Applicant has acted in bad faith (i.e. there were no grounds for reasonable suspicion for the initial seizure – a very low threshold in these circumstances) and the individual will suffer “financial prejudice” amounting to “substantial hardship”, the starting point and default position will be that there should be no order for costs (that is, each side will have to pay its own costs).
Of course, if you have just demonstrated that you have a business which legitimately requires the movement of large amounts of cash you are unlikely to be able to show that you will suffer “substantial hardship” by having to pay your own costs!
For more information on the topic of costs please see the excellent article by my colleague Samuel Davis at http://becket-chambers.co.uk/?s=perinpanathan.
In short, if you are planning to transport large quantities of cash (or even relatively small ones, as these provisions apply to any sum of £1,000) it is advisable:
- To declare it as soon as possible, ideally before you travel, and certainly don’t conceal it, e.g. in the spare wheel well, or in the panels of the vehicle.
- To give a full, complete and honest explanation to the officer when intercepted and during any subsequent investigations; if you later change your account, it inevitably makes you less credible (or, bluntly, a liar).
- To carry (or provide) documentary evidence of where the money came from and showing that that money is “legitimate” (e.g. if it’s a loan produce any relevant documentation and details of where the lender, if an individual rather than a bank, got the money in the first place) and what it was going to be used for – if you are intending to spend a large sum of money on expensive vehicles or equipment you are likely to have some information about the cars or machines you are interested in, where you are planning to buy them from and some idea of how you will get them back to your customers.
- To show the trip has been planned, e.g. if you are buying vehicles or equipment you would, presumably, have spoken to the seller, auction house or dealer to check whether they are able to take large cash payments and you would probably have made some prior arrangements for your accommodation and scheduled some viewings or meetings. Generally people do not decide to travel across Europe to spend several €10,000’s (or €100,000’s), especially in cash, on a whim.
- To have a sensible explanation as to why it’s better to travel with a large quantity of cash rather than effect a quick and transparent inter-bank transfer once any deal has been done (“the people I deal with prefer cash” hardly makes them, or you, sound like legitimate business people).
- Not to produce documents at court which show you to be a liar or dishonest or are forged (it has happened in one of my cases recently).
- To instruct lawyers who can demonstrate some experience in this field of work, and cooperate with them when they ask for information, documents or evidence to send to the investigating officer or during the court proceedings.
The POCA process for the seizure and forfeiture of cash is robust, if at time draconian (i.e. severe) and can take a considerable time to reach a conclusion, but if a legitimate, consistent and clear explanation is given and backed up with evidence the money will often be returned quite quickly (I dealt with a case recently when a professional gambler travelling between competitions had a significant sum in cash returned within a few weeks). Indeed the cash has to be returned as soon as the officer does not have reasonable grounds for suspicion, e.g. because they have been provided with full answers to their questions and their enquiries have confirmed the provenance and intended use of the cash, and there is a process to apply to the court for an order for the release of the cash in such circumstances.
However, when the individual fails to engage with the investigatory or court process, changes their story or doesn’t have a credible explanation, they inevitably make their situation worse.
Becket Chambers provide advice under the Direct Access Scheme, where members of the public can instruct experienced barristers with specialist knowledge; please contact the clerks at firstname.lastname@example.org for further information.