Corporate Crime analysis: What is the significance of the provisions in the Serious Crime Act 2015 that address organised crime? Kim Potts, solicitor at Corker Binning, considers the structure of the provisions and the practical challenges they present.
What are the main objectives of the provisions relating to organised crime?
The main objectives are to tackle those individuals that benefit from organised crime, but currently face very little risk of being prosecuted. The new offence will now enable prosecutors to prosecute people taking part in activities that they know to be, or reasonably suspect are, criminal activities of an organised crime group. The new offence will be used to target both those who lead criminal organisations and other members of the group who participate in activities, such as the provision of infrastructure and services that contribute to the overall criminal capability of the organised crime group. It has been estimated that organised crime costs the UK £24bn each year and the aim of the new provisions is to reduce the level of serious and organised crime affecting the UK.
What will the ‘offence of participating in activities of organised crime group’ entail? Have any concerns been raised about this new offence?
The new participation offence will be committed if an individual takes part in any activities that they know or reasonably suspect are criminal activities of an organised crime group, or that the person knows or reasonably suspects will help an organised crime group to carry on criminal activities. An ‘organised crime group’ is defined as ‘three or more people who act or agree to act together to further the pursuit of criminal activities’. The suspicion must be ‘reasonable’, so consequently the offence will not capture those individuals who genuinely did not suspect that they were helping an organised crime group. The prosecution will also have to show that the group was committing serious offences, attracting a sentence of more than seven years–so fraud, drug and human trafficking and child sexual exploitation will all be included, for example.
During the drafting phases of the legislation, concerns were raised about how widely the offence was drafted. This led to lobbying by the Law Society’s Money Laundering Task Force. The mens rea of the offence was initially ‘reasonable cause to suspect’, but was then narrowed to ‘reasonably suspects’. This means that the test will now be subjective, rather than objective. It is hoped that this will stop those who unwittingly become involved in the activities of organised crime groups from being caught by the offence. However, it has been argued that the offence is still too wide and proposals were made last year to amend the mens rea element further to ‘reasonably believe’. However, this was not implemented.
What are the main amendments being made to serious crime prevention orders (SCPOs) and what are they meant to achieve?
The main amendments achieve the following in relation to SCPOs:
- add offences to the list of trigger offences for imposing an SCPO (offences relating to firearms, cybercrime and the cultivation of cannabis plants are now included)
- enable the court to impose a new SCPO where the subject of a previous order has breached it
- if the subject of an SCPO has been charged with a serious offence or a breach offence, the court can extend the terms of the SCPO until the proceedings have concluded (this includes going beyond the five-year limit)
- extend SCPOs to Scotland, and
- consolidate financial reporting orders (FROs) into the SCPO–by consolidating the FRO into SCPOs, non-compliance becomes an indictable offence (previously, a breach of an FRO was only triable summarily)
The aim is to strengthen the effectiveness of SCPOs in preventing people engaging in serious and organised crime, and to strengthen the response to breaches of SCPOs.
What is the objective behind the new gang injunctions and what do they entail?
The amendments to the existing provisions dealing with gang injunctions widen the scope of the injunctions. The range of activities in respect of which a gang injunction may be granted now include any involvement in gang-related drug dealing activity. Previously, the scope of gang injunctions was limited to involvement in gang-related violence.
In my view, injunctions like these are always challenging to enforce, as their enforcement is often resource-intensive. They also, to some extent, require breaches to be brought to the attention of the authorities that may not always happen.
How do these provisions fit in with other legal developments in this area?
Lawyers in the regulated sector already conduct due diligence on transactions to avoid becoming concerned in money laundering. Therefore, to a degree, controls will already be in place. However, the overall process of due diligence may need to be conducted earlier to avoid participation in a predicate offence, rather than focusing on the usual issue of whether criminal property has actually been created. For lawyers overall, with the new participation offence now in force, it would be prudent for all firms to revisit their due diligence and money laundering controls.
For all lawyers, the implications of the new participation offence are such that a lawyer could be asked to do an entirely legitimate activity, but if they suspect that the legitimate activity is being used for an illegitimate purpose, the lawyer would be caught by the new participation offence. The offence will make it much easier to prosecute lawyers who find themselves in this situation, when previously a prosecutor would have had to prosecute the offending as a conspiracy, which is much harder to do as the prosecution would have had to show that the parties had reached an agreement to carry out a criminal act.
See the original article, published on Lexis PSL on 17th March 2015, here.