23 Nov 2018
Centre for Financial Crime and Security Studies, UK
The British government claims to be focussing on its ability to seize the proceeds of organised crime, but the response remains piecemeal, underfunded and poorly coordinated
As a seasoned follower of the UK’s progress (or lack thereof) in removing wealth from criminals, it is easy for the author to be cynical about the launch of yet another government strategy – in this case the new Serious and Organised Crime Strategy – which claims to put asset confiscation at the heart of the government’s response.
The previous iteration of the strategy made a raft of commitments, but with asset confiscation rates flatlining in recent years, the UK’s place as the ‘traveller’s choice’ destination for shady asset sequestration has proved impervious to a response that is grounded in rhetoric rather than action.
However, viewing the strategy with a less jaded eye offers some cause for optimism. Firstly, the strategy places asset confiscation at the heart of the ‘pursue’ strand of the response, rather than as an adjunct or niche capability.
Recognition, at a political level, that asset recovery is one of the most powerful tools available to disrupt and deter serious and organised criminality may go some way to promoting investment in the discipline throughout UK policing.
Secondly, as highlighted by RUSI research in 2017, financial investigation techniques remain underused in the fight against serious and organised crime, including as a route to asset confiscation.
News that the government will be reviewing the quality of financial investigation training, promoting its use throughout all levels of policing, and ensuring that police are held to account by HM Inspectorate of Constabulary on their use of the tools offers a step in the right direction.
Thirdly, the strategy recognises that there is a role for the private sector in bolstering the efforts to seize and confiscate criminal assets. A cynic might view this as political proclivity rather than a considered policy choice.
Be that as it may, this is an operational exigency given both the scale of the problem and the swingeing cuts to police budgets since 2010.
A particular area of focus for this engagement with the private sector should be exploring their ability to bolster the use of non-conviction-based asset forfeiture; a tool too often left in its box.
Fourthly, it is rare to see policymaking based on learning from past mistakes, but the government can be commended for an increase in central funding for the highly successful Asset Confiscation Enforcement teams (ACE).
While similar initiatives in the mid-noughties were disbanded after a period of success (a misguided assessment of ‘job done’), moves to increase funding will hopefully cement their place as a permanent feature of the asset confiscation landscape.
Finally, whereas in the wake of the popular attention given to financial crime following the BBC serialisation of Misha Glenny’s McMafia, the focus has been on the creation of complex legal structures used to move criminal wealth through the UK, the role of cold, hard cash has been neglected.
Given that the majority of organised crime still operates in a parallel cash-based economy, it is therefore heartening to see that the UK has recognised the extent to which it had taken its eye off the ball in relation to cross-border cash movements. Seed funding for a border cash intelligence cell may go some way to stemming the flow of physical fiat cash movements.
However, a cynic viewing this strategy might be tempted to say that the approach reads more like a school report than a strategy, with the British government listing out the various legislative and funding commitments it has made over the past three years, rather than setting out a concerted programme to strike fear into the heart of the criminal fraternity.
Firstly, at a policy level, it is remarkable that the government trumpets its intention to ‘publish an action plan on asset recovery’. Asset recovery watchers, like the author, have grown weary waiting for the publication of the asset recovery action plan promised to the Home Affairs Select Committee inquiry on proceeds of crime in 2016.
The government’s laundering of its own delayed policy response as a new and innovative initiative is certainly hubristic.
Secondly, from a funding perspective, while the fore-mentioned uplift in funding for ACE teams is laudable, the overall £7.5 million funding pot to boost the asset recovery response is paltry compared to the estimated tens of billions of criminal assets the UK’s long-suffering financial investigators are charged with capturing.
Thirdly, as regards the growing suite of asset confiscation tools available to law enforcement, the government continues to dine out on its implementation of the new Unexplained Wealth Order provisions.
These are certainly an innovative tool, but, as previous RUSI research concluded, they risk being the paper tiger masking wider problems in the UK’s criminal finance response. Due to their already litigious nature, it is unlikely that they will be used in all but the most serious cases.
The much-anticipated ‘Asset Recovery Action Plan’ would do well to put in place a plan to support local forces and the Crown Prosecution Service in ensuring their use is broadened from the overseas politically exposed person to the middle-tier organised criminal, against which their contribution is potentially the most impactful.
Finally, while the strategy specifically applauds the asset recovery efforts of the National Crime Agency and sets out the role of asset confiscation in tackling the proceeds of overseas corruption and criminality, it pays minimal heed to the efforts of the Regional Asset Recovery Teams within the Regional Organised Crime Unit (ROCU) structures who have been quietly and humbly plugging away at the assets of our own home-grown criminal fraternity.
That the strategy remains silent about a plan to better harness their capabilities and mainstream them into the ROCU operating model is to its detriment.
Whether the cynic or the optimist wins out in this debate is a moot point.
What matters is the impact of the strategy in practice. While the optimist recognises a role for the strategy in acting as a deterrent to those considering where to sequester their unlawfully obtained assets, the cynic’s retort is that a deterrent effect is dependent in the longer term, on visible and robust action.
Will the proof be in the pudding? With a long list of ingredients but no recipe, this author remains unconvinced.
This article was first published by RUSI.org. The views expressed are the author’s, and do not necessarily represent those of RUSI or any other institution.
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