Proceeds of crime

For use alongside criminal proceedings under the Trade Marks Act 1994, the Proceeds of Crime Act 2002 (POCA) is an extremely powerful weapon against counterfeiters, for offences committed after 23 March 2003.

POCA is designed to take the profit out of crime, to crack down on money laundering and to recycle confiscated criminal assets for the benefit of the community. Thanks to effective lobbying by ACG and other rights organisations while it was being drafted, IP crime is one of the ‘lifestyle offences’ so just one conviction for counterfeiting will open the door to criminal confiscation proceedings under POCA.

The Crown Prosecution Service has an excellent POCA guidance section on its website.

In these separate confiscation proceedings, a counterfeiter's assets can be traced back up to six years, and will be confiscated unless they can prove that those assets are NOT the proceeds of a criminal lifestyle. These proceedings can be through the criminal or civil courts:

• proceeds of counterfeiting can be seized whether or not the offence which triggered the procedure was trade mark related
• civil recovery orders are obtainable without first prosecuting the offender provided that ‘unlawful conduct’ as defined in the Act can 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
• law enforcement can share in the recovered assets, to cover costs
• trading standards officers are trained as accredited Financial Investigators, able to conduct their own investigations and confiscation proceedings under POCA when also prosecuting criminal IP cases
• the assets recovered from criminals in this way can also be taxed retrospectively

Regional Asset Recovery Teams

Currently five Regional Asset Recovery Teams have been established in England & Wales, to maximise asset recovery under POCA. The teams are made up of officers and staff seconded from various police forces, HM Revenue & Customs, the former Assets Recovery Agency, CPS and the Serious Organised Crime Agency.

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 all law enforcement agencies 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%.

This is a brief introduction to a complex subject, but here are some recent cases to illustrate how POCA works in practice.