Whilst every effort has been made to ensure the accuracy of this briefing, no responsibility can be accepted for errors and appropriate legal advice should be sought in all cases.
Enforcement authorities' ability to trace and seize the assets of counterfeiters offers an important legal remedy for IPR owners in the UK.
The ability to confiscate 'criminal benefits' from convicted offenders was introduced following the well-known drug-trafficking case in 1978.
Recovered assets of around £750,000 had to be released after the House of Lords held that then-current legislation could not be used to take all the profits resulting from the offences.
New laws were introduced in the '80s to cover proceeds from drug-trafficking, and were then extended for other specified offences.
Finally, the Proceeds of Crime Act 2002 (POCA) created both criminal and civil recovery measures for no-drug indictable offences and specific summary offences, including those under the Trade Marks Act 1994 - following energetic lobbying by rights organisations to include IP crimes in POCA's list of 'lifestyle offences'.
A single conviction for trade mark offences is sufficient to establish 'criminal lifestyle' and activate the process of tracing assets. Additionally, proceeds of counterfeiting can be seized whether or not the offence which triggered the procedure was trade mark related.
Also, civil recovery orders are obtainable without first prosecuting the offender provided that 'unlawful conduct' as defined in the Act could be proved.
In both kinds of proceedings, the standard of proof is that of the civil courts i.e. 'on the balance of probabilities' not the criminal standard of 'beyond reasonable doubt'.
The burden of proof is entirely on the defendant to establish that the assets traced are NOT the proceeds of criminal activity AND up to six year's worth of assets can be taken into consideration in calculating the confiscation order or civil recovery order unless the defendant can prove otherwise.
LACORS issued a vision for the use of POCA by trading standards services endorsed by the Assets Recovery Agency and the Society of Chief Trading Standards Officers. Local trading standards authorities should consider POCA activity because of:
Its contribution to local crime and disorder strategies and other corporate priorities
The need to consider post-conviction orders as part of the prosecution process
Its role in tackling ‘lifestyle criminals' such as counterfeiters, persistent rogue traders and loan-sharks
It can raise the profile of local trading standards services
It can ensure that crime doesn't pay and is seen not to pay
It helps meet the expectations of legitimate businesses and consumers; and It enables local authorities to access incentivisation funds
ARA'S POWERS NOW WITH SOCA
From 1 April 2008, by virtue of provisions in the Serious Crime Act 2007, the Serious Organised Crime Agency (SOCA) took on aspects of the assets recovery function previously managed by the Assets Recovery Agency (ARA).
SOCA has an explanation on its website and we will monitor this first stage of the change to see how it is working.
ARA's Centre of Excellence, which trains and accredits Financial Investigators, is moving to the new National Policing Improvement Agency.
SOCA has not inherited ARA's wide-ranging enforcement powers or its ability to bring, or closely support, criminal confiscation cases in court. SOCA's remit is limited to the conduct of investigations leading to criminal confiscation. It is thought that the Crown Prosecution Service will conduct the actual prosecutions.
SOCA will only provide end-to-end support to other agencies for existing 'legacy' cases, for which SOCA will retain ARA's full powers, to take these cases to their conclusion.
The power to launch civil recovery proceedings will be extended to prosecutors - it is claimed that this will broaden the range of cases where these powers are used - which in England and Wales are:
the Crown Prosecution Service (CPS) the Revenue and Customs Prosecutions Office (RCPO) the Serious Fraud Office (SFO)
It will also be extended to the Public Prosecution Service in Northern Ireland.
This reorganisation does not seem to fit with a recent EU Council decision (December 2007) to require each Member State to establish a National Asset Recovery Office e.g. in order to exchange intelligence etc Europe-wide. For further report.
Note also that the Home Office has issued a consultation on the Government's Asset Recovery Action Plan proposals for new powers to build on their efforts in the recovery of criminal assets, in the context of the changes introduced to enforcement of POCA by the Serious Crime Act 2007
The Government was seeking stakeholder views on proposals for new powers to build on existing efforts in the recovery of criminal assets.
The consultation was aimed at those with an interest in the recovery of criminal assets and criminal justice. The Alliance Against IP Theft made a submission,as did LACORS.
The government's response is still awaited, the consultation having closed last November.
Much of the plan is about delivering projects already in place but it also recognises the need to achieve more. The Government is committed to recovering criminal assets of £250 million by 2009-10 and £1billion a year in the longer term.
Of particular importance to TS is the review of the incentivisation schemean opportunity to lobby for an increased share for prosecutors and investigators, which both the Alliance and LACORS have highlighted.
PROCEEDS OF CRIME INCENTIVISATION SCHEME
ACG campaigned long and hard for resources to be made available to train TS officers as Financial Investigators, so that they could conduct their own investigations under POCA and apply for confiscation orders when prosecuting criminal IP cases.
We also campaigned for TS to be able to share in the POCA incentivisation scheme, which would enable them to recoup at least some of the considerable costs involved in bringing POCA proceedings.
Both these campaigns eventually bore fruit. Many trading standards departments now have officers who are accredited financial investigators for POCA purposes, and all those in England and Wales are also now included in the incentivisation scheme.
Along with other bodies involved in the investigation (police etc), TS can recoup some of the costs of a prosecution by being awarded a percentage of the eventual confiscation order.
For example, using a £90,000 POCA confiscation order:
50% goes to HM Treasury, with the other 50% is split into thirds
one third goes to the agency responsible for the collection of the monies (normally the Magistrates Courts)
one third goes to the Financial Investigator (the relevant local authority)
one third goes to the prosecuting authority (which can be the police, or the same authority as the investigator).
This allows trading standards in England and Wales to claim up to two-thirds of the second 50%.
Whilst every effort has been made to ensure the accuracy of this briefing, no responsibility can be accepted for errors and appropriate legal advice should be sought in all cases.
Its contribution to local crime and disorder strategies and other corporate priorities
