UK: Asset Recovery Comparative Guide

1 Civil

1.1 Civil proceedings: (a) What remedies for asset recovery are available in your jurisdiction? (b) What type of assistance will be provided to those seeking substantive relief in your jurisdiction when faced with the dissipation of assets? (c) Can civil proceedings run in parallel to criminal proceedings relating to the same matter or does one take precedence over the other? (d) Can evidence gathered in criminal proceedings be used in civil proceedings? (e) Are foreign freezing orders/injunctions enforceable in your jurisdiction and what are the limitations to registration/enforcement of such foreign orders? (f) What other considerations should be borne in mind in relation to civil asset recovery proceedings in your jurisdiction?

(a) What remedies for asset recovery are available in your jurisdiction?

Claims can result in the recovery of money or property lost due to fraud, and in some cases additional damages for harm caused by the fraud. They can be pursued individually or in combination, depending on the circumstances of the case. These remedies are subject to various requirements and defences, and their availability and effectiveness can depend on many factors, including:

• the specifics of the fraud;
• the evidence available; and
• the solvency of the fraudster and any third parties involved.

The wide-ranging actions can result in a variety of remedies, in particular:

• restitution of benefits gained by the defendants;
• charging orders over property, shares or intellectual property;
• garnishee orders;
• return of the assets through asset tracing/declarations of constructive trusts over traceable property in benefit for the claimant;
• compensatory damages for the loss caused;
• account of profits for breach of fiduciary duty or confidence;
• accounts of property or assets held in fiduciary capacity; and
• final injunctions and orders for specific performance.

In addition, there are claims available under the Insolvency Act 1986 (eg, defrauding creditors) and additional causes of action are available to insolvency office holders such as setting aside transactions.

Enforcement authorities also have the power to apply for a civil recovery order.

(b) What type of assistance will be provided to those seeking substantive relief in your jurisdiction when faced with the dissipation of assets?

In England and Wales, the courts provide several types of assistance to those seeking substantive relief when faced with the dissipation of assets including:

• Freezing injunctions (Mareva injunctions): These are orders that prevent a defendant from disposing of or dealing with its assets, to assist enforcement of an existing or potential future judgment. They are often granted without notice to the defendant (ex parte) and can be domestic, in that they apply to assets located in the jurisdiction; or if appropriate, a worldwide order can be granted. Freezing orders can be granted against persons unknown where, for example, a recipient bank account of a fraudulent transaction is known but the legal or beneficial owner of the account is not. Freezing orders are also available against third parties that hold the defendant's assets even if there is no underlying claim made against that third party. In certain circumstances, freezing orders may also be granted:
• • in proceedings to enforce a foreign judgment or an arbitration award in England; and
  • in support of foreign proceedings.
• Disclosure orders: These can cover a variety of subject matter, such as:
• • the disclosure of passwords and encryption keys; and
  • information about assets and their location.
• An obligation to provide asset disclosure affidavits is commonly part and parcel of a freezing order and in some circumstances, the court may order the cross-examination of defendants on their assets where there are serious questions over the accuracy and credibility of the disclosure provided.
• Bankers Trust and Norwich Pharmacal orders: These are third-party disclosure orders used by claimants to obtain disclosure of confidential documents/information. A Bankers Trust order can be used to obtain confidential banking information from a bank within the jurisdiction (although in some cases it may be possible to serve a witness summons on a foreign bank with a branch within the jurisdiction). Norwich Pharmacal orders are orders requiring a third party (ie not a defendant or possible defendant) which has been innocently caught up in a wrongdoing to provide disclosure. In certain limited circumstances, Norwich Pharmacal orders may also be used in respect of information from third parties located abroad.
• Search and seizure orders (Anton Piller orders): These are orders that allows a party to enter the defendant's premises (or a likely party's premises against which a cause of action exists) and search for and remove evidence that otherwise may be destroyed or concealed. They are granted ex parte and are regarded as a very intrusive and exceptional remedy. An imaging order is a broadly similar order which applies where the information which the applicant wishes to preserve is in electronic form.
• Proprietary injunctions: These are orders act similarly to a freezing order but instead prevent a defendant from dealing with specific property that belongs to the claimant or in which the claimant has a beneficial interest. They are often used to preserve the proceeds of fraud that have been transferred to third parties.
• Receivership orders: The court has the power to appoint a receiver over the defendant's assets where appropriate – for example, where the assets are structured through a complex system of companies and it is feared that the defendant will dissipate the assets notwithstanding the existence of a freezing order.

These measures can be used to:

• prevent the dissipation of assets and preserve them until a judgment can be obtained and enforced; or
• identify assets for future asset recovery.

They are powerful tools in the hands of a claimant, but they are also subject to stringent requirements and safeguards to protect the rights of defendants/third parties.

(c) Can civil proceedings run in parallel to criminal proceedings relating to the same matter or does one take precedence over the other?

Civil proceedings can run in parallel to criminal proceedings relating to the same matter. They may both be brought by the same party through private prosecution; or the criminal proceedings can be brought by the relevant authorities. Factors that may affect this include the following:

• Stay of civil proceedings: The court has the discretion to stay civil proceedings if they would prejudice the fairness of any related criminal proceedings.
• Disclosure and privilege: The parties in civil proceedings have a duty to disclose relevant documents, which may include evidence that could be used in criminal proceedings. Privilege against self-incrimination may also come into play.

(d) Can evidence gathered in criminal proceedings be used in civil proceedings?

For evidence to be admissible in civil proceedings:

• it must be relevant to the issues in dispute; and
• it must not be excluded by virtue of any rules

The court has discretion as to whether material obtained in criminal proceedings may be admissible in civil proceedings. There is no implied undertaking given to the court either by a regulatory body that obtains documents/information pursuant to its compulsory powers or a recipient of such documents/information as to its use – that is, such documents may, in principle, be relied upon in subsequent civil proceedings (see Standard Life Assurance Ltd v Topland Co Ltd [2010] EWHC 1781 (Ch)).

Many factors will need to be taken into account to ascertain whether evidence obtained in criminal proceedings may in fact be used in civil proceedings including, but not limited to:

• the status of the criminal proceedings;
• the nature of the evidence sought to be relied upon (eg, witness evidence, seized property or evidence obtained from foreign bodies through mutual assistance procedures); and
• how the evidence was obtained.

Broadly speaking – but dependent on the facts of the case at hand – evidence obtained in criminal proceedings may be used in civil proceedings once the criminal proceedings have concluded and the evidence is highly relevant to the issues in the civil proceedings. An eye will also need to be had on duties of confidentiality owed by the recipient authority to the disclosure of information and public interest. In some cases, it may also be necessary for permission to be obtained before evidence from criminal proceedings can be used in civil proceedings.

(e) Are foreign freezing orders/injunctions enforceable in your jurisdiction and what are the limitations to registration/enforcement of such foreign orders?

Interim freezing orders are dealt with differently from final judgments and there is no automatic recognition of foreign freezing orders/injunctions. Interim injunctions must be sought from the court; an interim foreign injunction cannot merely be recognised and enforced in England. The court will consider all the facts and whether the tests have been met when considering whether to grant an injunction to mirror or on similar terms to the foreign interim injunction.

The ability to register and enforce foreign final injunctions depends – among other things – on the country of origin the treaty or conventions in place with that country. The type of injunction sought to be enforced is also an important consideration.

If the injunction is from a non-treaty or convention country, the English court will permit recognition or enforcement only if it is satisfied that:

• the foreign court has jurisdiction to have granted the order; and
• there is a connection with England or a party has to seek summary judgment.

There is no one rule fits all insofar as the enforcement of foreign injunctions in England is concerned.

(f) What other considerations should be borne in mind in relation to civil asset recovery proceedings in your jurisdiction?

Proceedings will be dependent on the facts of each case and the causes of action, and remedies will need be chosen with those facts in mind.

The potential costs of pursuing recovery against the value of the assets should be considered alongside the likelihood of recovering those costs. Timing is important, particularly when dealing with digital assets, in addition to the ability to enforce any orders and judgments granted by the court. Any cross-border issues should also be considered. Service of orders is another important issue to keep in mind.

1.2 Asset freezing: (a) What provisional/interim measures to secure assets are available in your jurisdiction? (b) What are the evidentiary and procedural requirements for obtaining provisional/interim measures? (c) Are any alternatives to provisional measures available in your jurisdiction? (d) Once the assets have been secured, how are they generally managed? What specific considerations and concerns should be borne in mind in this regard? (e) What other considerations and concerns should be borne in mind at this stage of the process?

(a) What provisional/interim measures to secure assets are available in your jurisdiction?

Freezing injunctions: The main interim measure to secure assets is the freezing injunction (also known as a Mareva injunction). Freezing injunctions have significant implications for defendants and as such, the legal requirements are more onerous than those for other types of interim injunctions. Breach constitutes contempt of court with sanctions of up to two years' imprisonment.

Once a freezing injunction has been granted, it prevents the respondent from removing assets from the jurisdiction and/or dealing with their assets. The purpose of the injunction is to preserve the assets until judgment. The court has discretion as to the scope of the freezing, order which can apply domestically and less commonly worldwide (known as a worldwide freezing order), in addition to ancillary orders to support the freezing order.

Often freezing injunctions are used hand in hand with disclosure orders or other ancillary orders. Examples of ancillary orders include:

• travel restrictions/passport seizure orders; and
• orders for the appointment of a receiver.

Travel restrictions/passport orders compel the respondent to remain within the jurisdiction and/or surrender his or her passport. Receivership orders allow the court to appoint a receiver over the defendant's assets and are often used where faced with complex holding structures. Receivers can obtain control of top-co shares and to preserve the assets without intervening with the day-to-day operation of the businesses themselves.

Disclosure orders can take many forms:

• They can be directed at the defendant or a third party (eg, banks, crypto exchanges, trustees, individuals or companies); and
• They can require the disclosure of a plethora of types of information/documents.

For example, they can require the disclosure of:

• assets;
• the location of assets;
• information as to the identity of an individual; or
• passwords to accounts/digital assets.

Freezing injunctions against third parties: The court can grant a freezing injunction against a third party under the Chabra jurisdiction even if no claim is asserted against that third party where it can be established that that third party holds the assets for the defendant.

Proprietary (freezing) injunctions: Proprietary injunctions are a less intrusive remedy than freezing injunctions as they attach only to specific assets and prevent a party from dealing with it.

Search and seizure orders: These allows a party to enter the defendant's premises (or a likely party's premises against which a cause of action exists) and search for and remove evidence that otherwise may be destroyed or concealed. They are granted ex parte and are regarded as a very intrusive and exceptional remedy. An imaging order is a broadly similar order which applies where the information which the applicant wishes to preserve is in electronic form.

Notification injunctions: A notification injunction is a modified version of a freezing injunction and compels a defendant to notify a claimant's solicitors in writing of any proposed dealing or disposal of assets prior to it taking place. This then enables the claimant to take steps to prevent a disposal as necessary/ appropriate.

Interim delivery up orders for preservation of property: This is an extension to a freezing order requiring interim delivery up of the defendant's held assets pending judgment in certain circumstances to prevent dissipation of assets. The order should specify as clearly as possible what chattels or classes of chattels are to be delivered up and delivery up should ideally be made to a receiver appointed by the court. Additional rules/guidelines apply to chattels in the possession or control of third parties.

(b) What are the evidentiary and procedural requirements for obtaining provisional/interim measures?

Freezing injunctions: A party can apply for a freezing injunction prior to commencement and at any stage of the proceedings. The application will usually be without notice (ex parte) and, if so, the applicant:

• is subject to a duty to make full and frank disclosure of all relevant information to the application; and
• must provide an explanation as to why notice was not given.

The application must be support by an affidavit rather than a witness statement and the applicant will most likely be required to provide cross-undertakings (eg, in damages) or a form of security if the injunction is to be granted. The hearing will take place without the respondent present; and if granted, the order will need to be served on the defendant (or any third party as necessary/applicable). There will be a return date hearing, which all parties to the application will attend. At the hearing, the court can hear arguments from both sides on whether the freezing injunction should remain or be discharged.

Freezing injunctions are a serious matter for a defendant and can have significant consequences for the defendant's personal and professional life or reputation. Therefore, the courts approach the granting of freezing injunctions with caution. An applicant must demonstrate:

• a good arguable case;
• that assets are available; and
• a risk of dissipation of assets the moveable nature of the assets.

The court may also take into account various other factors, such as:

• the overall strength of the case;
• any delays in seeking the order (any undue delay may result in the refusal of an injunction);
• any issues with disclosure;
• the conduct of the applicant;
• the rights of any third parties affected by the grant of the injunction; and
• whether the injunction would cause a legitimate hardship for the defendant.

This list is not exhaustive and the factors to be considered will depend on the facts and circumstances of each case. Ultimately, the court will evaluate these factors and determine where the balance of justice lies in deciding whether to grant a freezing injunction.

An application for a worldwide freezing order will usually require an undertaking not to enforce it abroad without the permission of the English court to do so. The applicant also needs to consider whether an English freezing order will be enforced by the local courts.

Norwich Pharmacal orders: Broadly speaking, the applicant will be required to demonstrate the following:

• The respondent is likely to have the relevant documents/information;
• There is a good, arguable case that there has been a wrongdoing by the defendant/likely defendant;
• The respondent is involved in the wrongdoing but not guilty/accused of any wrongdoing; and
• The order is necessary in the interests of justice/not sought for any improper purpose and there is no alternative appropriate relief available.

The applicant will be under a duty of full and frank disclosure in making the application and will usually have to pay the respondent's costs in compliance with the order. The respondent may oppose the order on the basis of confidentiality. Often third parties (in particular banks) will voluntarily agree to provide disclosure but to protect their own interests will require a court order before provision of information.

Search and seizure orders: The applicant will need to show:

• an extremely strong prima facie case (although the court may show some flexibility in this respect depending on the circumstances);
• there must have been very serious actual or potential damage unless the order is granted; and
• there must be clear evidence that the information/ documents are in the respondent's possession and a real risk of destruction.

(c) Are any alternatives to provisional measures available in your jurisdiction?

N/A

(d) Once the assets have been secured, how are they generally managed? What specific considerations and concerns should be borne in mind in this regard?

• Interim measures are not equivalent to enforcement or actual recovery and are put in place to preserve assets until judgment can be obtained.
• Breaches of injunctions are generally enforced by bringing committal proceedings for contempt of court. In serious cases of non-compliance, a claimant can apply for permission to issue a writ of sequestration.
• Banks and exchanges should be notified if funds or crypto is involved
• Where injunctions are imposed over assets, the respondent cannot deal with the same as set out in the order.
• A requirement for the provision of bank statements should be considered, to ensure that assets are not dissipated.
• If assets are held by a receiver, the claimant cannot deal with the assets until judgment is obtained.
• Depending on which assets are secured and how, the following considerations should also be borne in mind:
• • Are the goods perishable?
  • Is storage/insurance required? If so, what are the costs?
  • Is the asset susceptible to value change (eg digital assets, shares)?
  • What risk is there of liability for any losses under the cross-undertaking and preventing the defendant from dealing with the assets?

(e) What other considerations and concerns should be borne in mind at this stage of the process?

Parties should be mindful of the costs of bringing proceedings and applications for interim remedies against the value and recoverability of the assets. The various cross-undertakings required in the grant of interim remedies and their value should be considered, together with the potential risk of substantial damages where injunctions are granted incorrectly. Cross-border issues should also be kept in mind at this stage of the proceedings.

1.3 International cooperation: (a) What is the process for requesting assistance in asset recovery investigations? What specific considerations and concerns should be borne in mind at each stage of the process (tracing; freezing; confiscation; disclosure)? (b) What types of international assistance can be obtained in civil asset recovery proceedings? (c) With what level of detail and specificity should the documents to be obtained from other jurisdictions be described (eg, is a generic description or category of documents permissible, or is the exact date and name required)? (d) How will the courts in your jurisdiction respond to a foreign request for assistance? What specific considerations and concerns should be borne in mind in this regard?

(a) What is the process for requesting assistance in asset recovery investigations? What specific considerations and concerns should be borne in mind at each stage of the process (tracing; freezing; confiscation; disclosure)?

In civil cases, parties cannot rely on international mutual assistance for criminal cases. They have to seek assistance through the civil regime.

The English courts can issue letters of request/letters rogatory to courts in other jurisdictions:

• to obtain information and documents; and
• to compel a witness located abroad to attend for examination to assist in ongoing English civil proceedings.

A letter of request is addressed to the court in the foreign jurisdiction and is required because the English court has no jurisdiction over individuals outside England and Wales.

Depending on the applicable rules (ie, the Hague Convention, bilateral conventions or no conventions), a request for a letter of request is made to the senior master and accompanied by a witness statement and a draft of the requests.

The procedure and requirements will also differ between:

• document requests; and
• where witnesses are to be cross-examined.

There are also steps that can be taken in some countries to compel document production to assist in asset tracing (eg United States Code Section 1782 proceedings in the United States).

Where assistance from other jurisdictions is being sought, local law advice as to the relevant applicable rules will need to be sought, as the procedure and what is needed will depend on this. For example, there may be translation requirements or a need for deposit payments.

It is also important to keep in mind confidentiality aspects and what measures can be put in place in this respect.

(b) What types of international assistance can be obtained in civil asset recovery proceedings?

International assistance may include:

• assistance with disclosure examination of witnesses in aid of foreign proceedings (eg, the letter of request route or Section 1782 applications in the United States);
• registration enforcement of foreign orders/judgments; and
• various forms of mutual assistance from foreign enforcement bodies may be available depending on the type of international assistance required.

(c) With what level of detail and specificity should the documents to be obtained from other jurisdictions be described (eg, is a generic description or category of documents permissible, or is the exact date and name required)?

This will depend on the local rules and the applicable rules that provide the basis for the request (eg, convention or bilateral treaty).

From an English perspective, the rule is that document requests are to be limited to specific documents that could otherwise be obtained under an English court order.

It is for the lawyers in the receiving country to advise on the level of specificity; but, for example, if a document request is made in certain countries in the European Union, it must be exceptionally specific identifying precisely the date(s) of the documents and an accurate description – it cannot merely be a request for a category of documents within a date range. However, in certain common law countries, document requests can be wider and with reference to types of documents within a date range or topics.

(d) How will the courts in your jurisdiction respond to a foreign request for assistance? What specific considerations and concerns should be borne in mind in this regard?

The English court will consider the request and grant it if appropriate. It does not have to amend the request if it is drafted too widely but can simply reject the entire request. Care therefore must be taken to ensure that the documents requested are clear and are proportionate to search for. The English court is amenable to incoming letters of request (if compliant) in the interest of comity. Orders can be challenged by the respondent if the scope is too broad.

The procedure will differ depending on whether documents are sought or examination of a witness is requested.

The following should be borne in mind:

• Incoming letters of request are available only where the evidence is required for trial (ie, it is not a pre-action disclosure route). The English court will need to be satisfied in this respect and an explanation as to why the documents are needed must generally be provided.
• The request must not be a fishing exercise and the documents that are to be disclosed must be easily identifiable by the recipient. Generic document descriptions will not suffice and the level of specificity required will be assessed on a case-by-case basis. For example, document requests that require disclosure of documents ‘relating to' a particular issue will most likely be too wide.
• The English court has no obligation to amend a non-compliant letter of request so as to make it compliant.
• The requested documents must exist. The burden is on the applicant to establish this and some evidence in this respect must be provided.
• The request must be directed to a person with actual possession/custody of the document.
• The requests must not be too wide and limited to what is reasonably necessary for the fair disposal of trial.

1.4 Cryptocurrencies: (a) Do cryptocurrencies constitute ‘property' for interim remedy/enforcement purposes? (b) Does your jurisdiction have experience with investigations, interim remedies or enforcement actions in respect of cryptocurrencies? (c) How will the question of governing law and jurisdiction be determined in respect of cryptocurrencies? (d) Are there any other considerations that should be borne in mind in this regard?

(a) Do cryptocurrencies constitute ‘property' for interim remedy/enforcement purposes?

In England and Wales, the term ‘assets' includes intangible assets, and the English judiciary has:

• treated cryptocurrencies and other digital assets such as non-fungible tokens as ‘property'; and
• ranted interim remedies such as proprietary injunctions and freezing orders.

(b) Does your jurisdiction have experience with investigations, interim remedies or enforcement actions in respect of cryptocurrencies?

The English courts are at the forefront of asset recovery in the crypto/digital asset space. They have been proactive in adapting procedures and have granted orders to allow for the nuances of digital assets.

The English courts have shown themselves willing to assist victims of fraud in the crypto/digital asset sphere where possible and have:

• granted injunctions against persons unknown;
• permitted service via the blockchain; and
• ordered disclosure by exchanges.

Ultimately, disputes involving cryptocurrencies and digital assets are mainly approached in the same way as disputes involving traditional types of property.

Further regulatory and legislative changes are likely to be introduced to tackle the issues presented by cryptocurrencies in fraud and money laundering to build out the legal framework established by the courts in recent years. See, for example, the recently enacted Economic Crime and Corporate Transparency Act 2023, which gives expanded powers to authorities regarding crypto assets linked to criminal activities.

(c) How will the question of governing law and jurisdiction be determined in respect of cryptocurrencies?

Where a contract exists between the counterparty, the issues of governing law and jurisdiction will be determined with reference to that agreement. A contractual arrangement is likely to exist where one party is a crypto exchange.

Jurisdiction: Where no such contract exists, the question of jurisdiction is more complicated (particularly when dealing with ‘persons unknown') and will depend on the facts of the case at hand. The English courts have been creative and shown willing to assist victims of fraud which is reflected in the decisions as to jurisdiction.

In Ion Sciences vs Persons Unknown, the English court determined the issue of jurisdiction with reference to the following factors:

• There is a serious issue to be tried;
• There is a good arguable case and there is a jurisdictional gateway available; and
• England and Wales is the most appropriate forum to determine the dispute.

It was held that the crypto asset is located where the owner of the asset is domiciled (unless the location of the asset is clear). This was an interim decision, however, and was not contested.

The introduction of new gateways also provides a basis for claims to be initiated in England and served out of the jurisdiction where the claim is to obtain information to establish the true identity of a defendant/potential defendant or to trace assets.

Governing law: The applicable law will be determined by any agreement between the parties setting out a choice of law. It the absence of such agreement, the usual English conflict of law rules will apply. However, these rules are more difficult to apply to crypto assets given their nature.

Cases decided to date in England and Wales have shown that the English courts will determine the governing law with reference to:

• where the crypto asset is situated; and/or
• where the relevant damage occurred.

(d) Are there any other considerations that should be borne in mind in this regard?

• Where and how proceedings relating to crypto/digital assets can be served;
• The likelihood of compliance with any orders and how non-compliance can be enforced/sanctioned;
• In practical terms, whether it will be possible to trace the assets and ultimately enforce (in particular, whether any freezing order will be effective in circumstances where there may well have been cross-chaining/mixing or a bona fide purchaser for value);
• Who owns the assets in a wallet and what type of wallet is in issue; and
• The speed with which digital assets can be moved and the time it takes to obtain orders

2 Investigations

2.1 Who identifies the assets in civil and criminal asset recovery proceedings?

In civil proceedings, the claimant will be responsible for evidence gathering and investigation into assets and asset tracing. This is usually done through:

• the use of investigators and experts such as forensic accountants; and
• the use of public resources.

In addition, various orders can be granted by the court to assist in obtaining evidence. For example, third-party disclosure orders to obtain information on where the funds have gone or who has received them or assisted in transmitting them can be made.

In criminal proceedings, the relevant authority will be responsible for investigating and identifying the assets. Investigations can involve the use of powers such as:

• the power to arrest and conduct interviews with a person suspected of a criminal offence;
• the power to search and seize individuals and property; and
• the power to conduct surveillance and intercept communications.

2.2 How are the targets of the investigation identified?

It is often the case – especially in cases involving cyber fraud – that it may not be immediately clear who is responsible and who to take action against. The court can grant orders for disclosure of information to assist in the identification of the defendants and/or assets. The court can also grant freezing injunctions against ‘persons unknown' in situations where there is information about the transfer of funds between an applicant's and recipient's bank accounts but no knowledge of the legal or beneficial owner of the recipient account.

In some cases, the targets of the investigation are obvious; whereas in more sophisticated cases of wrongdoing/concealment, investigation may well take a considerable time and expense and involve an ever-increasing list of potential targets.

2.3 What role (if any) may regulatory/law enforcement bodies play in locating assets in aid of civil proceedings?

The main source of asset tracing in civil proceedings does not stem from regulatory/law enforcement bodies. However, under certain limited circumstances, information may be obtained by private individuals from regulatory bodies/law enforcement for use in civil proceedings. However, they are unlikely to assist if their own investigations are still ongoing.

2.4 Will regulatory/law enforcement bodies share evidence to be used in civil asset recovery/tracing proceedings?

Evidence can be requested from law enforcement and regulatory agencies for use in civil proceedings. It is generally at the discretion of the relevant authority whether to comply with such a request and in practice they rarely comply. In very exceptional circumstances, the court may grant an order that compels a public authority to provide information. For example, in Various Claimants v News Group Newspapers [2013] EWHC 2119 (Ch), the court ordered the Metropolitan Police in London to disclose information obtained in phone-hacking investigations to claimants in related civil proceedings.

2.5 Are there restrictions on the use of documents/ information obtained as part of civil or criminal proceedings in either local proceedings or foreign proceedings?

Civil proceedings are subject to a collateral use restriction. This means that documents disclosed as part of civil proceedings in England must be used only for these particular proceedings unless they were referred to/read out in open court, unless:

• an order is in place that requires any such documents to be treated as still being subject to the collateral use restriction regardless of this; or
• the court has given permission.

These rules will be applied strictly and, for example, it is generally not possible to use the information derived from documents disclosed in English civil proceedings to use this in other proceedings.

In respect of documents obtained in criminal proceedings, there is no implied undertaking given to the court by either a regulatory body that obtains documents/information pursuant to its compulsory powers or a recipient of such documents/information as to its use – that is, such documents may, in principle, be relied upon in subsequent civil proceedings (see Standard Life Assurance Ltd v Topland Co Ltd [2010] EWHC 1781 (Ch)).

2.6 What different sources of information can be drawn upon in an asset recovery investigation (eg, public information; government agency information; company information); and what restrictions and requirements apply in this regard?

Examples of publicly available documents are as follows:

• Companies House: Companies House operates a database of all UK-registered companies and limited liability partnerships. Information available includes details of:
• • shareholders;
  • directors;
  • persons with significant control;
  • registered charges; and
  • company accounts.
• Driver and Vehicle Licencing Agency (DVLA): The DVLA has a database of the registered keeper of all taxed vehicles in the United Kingdom.
• Land Registry: The Land Registry maintains a database of English and Welsh properties that can be searched if the property details are known. It clarifies what charges may be over a property, such as whether a property is mortgaged.
• Publicly listed companies: Public companies have an obligation to publish accounts on their website and file various information with the relevant stock exchange.
• Other public registers: Public registers of certain other assets are also available, such as aircraft and ships.

As to whether evidence obtained is admissible, this will need to be considered on the facts and with regard to where the information has been obtained from.

2.7 Under what circumstances will a criminal asset recovery investigation be initiated in your jurisdiction?

It is at the discretion of the enforcement authorities to decide whether to commence investigations to identify, trace and freeze proceeds of crime.

2.8 What specific considerations and concerns should be borne in mind in cross-border investigations?

The starting point should be to consider the following questions:

• What is the end goal?
• Why is the investigation being conducted?
• Who are you dealing with?
• What is the geographical location?

Key cross-border considerations in internal investigations are include the following:

• any privilege that applies to an internal investigation and steps to take to protect it;
• the implementation of communication protocols;
• what might trigger mandatory reporting obligations and the associated impact;
• data protection concerns;
• the location of data/information and how susceptible it is to disclosure applications;
• the steps that should be taken to prevent loss of data/information when culprits/suspects become aware of an investigation;
• any changes to access/firewalls to be implemented;
• whether third-party advisers may become a target for disclosure applications; and
• any need for gagging orders.

In respect of external investigations, the following should be borne in mind:

• preservation/interim measures – where to apply, how to enforce and how to accelerate the process;
• local law rules on what is and is not permissible (eg, whether the taking of evidence abroad without the court's permission is a criminal offence under local law);
• available powers/remedies, what can be done with the fruits of any investigation and how they interact;
• the applicable law;
• information to be obtained and the best jurisdiction to do this in;
• depending on the jurisdiction, whether the matter is criminal or civil;
• whether it is necessary to involve experts (eg, forensic accountants or forensic IT teams for example);
• factors to consider regarding witnesses (eg, there is no property in a witness under English law, so be careful what you tell them); and
• whether recordings are illegal.

3 Criminal

3.1 Asset tracing: (a) What different sources of information can be drawn upon in an asset recovery investigation (eg, public information; government agency information; company information); and what restrictions and requirements apply in this regard? (b) What investigative techniques can be used to gather evidence in your jurisdiction; and what restrictions and requirements apply in this regard? (c) What other considerations and concerns should be borne in mind at this stage of the process?

(a) What different sources of information can be drawn upon in an asset recovery investigation (eg, public information, government agency information, company information), and what restrictions and requirements apply in this regard?

The main agencies responsible for investigating, tracing, and confiscating the proceeds of crime are:

• the Crown Prosecutions Service (CPS);
• the Serious Fraud Office (SFO); and
• the National Crime Agency (NCA).

There are, however, broad powers for most regulatory agencies which have a criminal prosecution function to carry out associated criminal confiscation proceedings. The gathering of information – in particular, financial information – in relation to such proceedings must be carried out by an accredited financial investigator. Prosecuting authorities which do not have their own dedicated financial investigators often work with other organisations which do and share the relevant resource.

In an asset recovery investigation in the United Kingdom, several sources of information can be used depending on the circumstances of an investigation. These include the following:

• Publicly available sources: These include:
• • online resources;
  • public databases; and
  • data from public entities such as Companies House and the Land Registry, or census data.
• Government agencies: Agencies such as the NCA and SFO can and often do work together, and there are statutory ‘gateways' allowing information to be shared.
• Financial institutions and professional firms: Laws such as anti-money laundering regulations oblige financial institutions and some non-financial professions (eg, lawyers and accountants) to file reports on suspicious transactions and activities. Audits are often useful in identifying discrepancies in business transactions. Accredited financial investigators have the power to obtain banking records in relation to individuals under investigation.
• Civil litigation, divorce and probate proceedings: These are likely to involved detailed financial information.
• Patent and trademark applications:These sources can provide details of assets and intellectual property.
• Tax filings: Can provide details of assets and financial liabilities.
• Trust and company service providers: These entities can provide asset ownership and control details.
• Real estate agents and art dealers: These sources can provide information about high-value transactions.
• Insurance companies: These companies can provide information about insured assets.
• Business competitors: They may have information about a target's business dealings.
• Travel and other reward programmes: These sources can provide information about a target's movements and spending habits.
• Businesses, relatives, employees and associates of the targets: These can provide information about assets held by others on their behalf.

The scope of enforcement authority of the different prosecuting authorities is determined by the various statutory provisions governing each agency. In relation to criminal confiscation investigations, there will generally need to be a conviction for a qualifying criminal offence, but the process and rules governing how those investigations are conducted will be the same for each agency as they all rely on the provisions of the Proceeds of Crime Act 2002 (POCA 2002). It is generally up to the discretion of each authority when to commence investigations related to confiscation, which will depend on:

• the nature of the criminal proceedings involved; and
• whether it appears necessary to apply for an order seeking pre-conviction restraint of assets.

(b) What investigative techniques can be used to gather evidence in your jurisdiction, and what restrictions and requirements apply in this regard?

Depending on the circumstances, authorities have powers to issue notices compelling a person:

• to answer questions relating to an investigation; or
• to provide information and documents.

Failure to comply with these notices is an offence. Generally, these notices can be given where there are reasonable grounds to suspect that:

• wrongdoing has occurred; and
• the recipient is in possession of relevant information or documents.

In addition, financial investigators have direct access to banking institutions and information held in suspicious activity reports. They also routinely collect financial information through production orders and requests for disclosure of personal information. Available relevant financial information held by financial institutions can reveal the lifestyle of a person and help to assess whether any of their income or assets can be deemed to be the proceeds of crime. This includes information from:

• bank accounts;
• credit and debit slips;
• supplementary information such as managers' written notes;
• identity documents used to open accounts;
• account opening forms;
• bank statements;
• direct debits;
• standing orders;
• deposits;
• withdrawals;
• safety deposit boxes;
• copies of ledgers of business;
• credit and charge card accounts;
• credit and charge card statements;
• pensions;
• insurance schemes;
• mortgages;
• loan applications; and
• other previously unidentified accounts.

In the various criminal investigations related to asset recovery, the main powers of investigators can be found under POCA 2002 and include the following:

• Search and seizure warrants: Agencies have powers to obtain search and seizure warrants.
• Production orders: Authorities can apply for an order to obtain material relating to an investigation to grant an office access to that material.
• Disclosure orders: A disclosure order is a request for relevant information whose recipient is obliged to answer questions, provide information or produce documents to comply for the purposes of an investigation.
• Account monitoring orders: These allow investigators to monitor the activity of a particular account held at a financial institution for up to 90 days.
• Customer information orders: These require financial institutions to provide details of any accounts held by persons under investigation.

The above powers can be used in investigations such as:

• money laundering investigations;
• confiscation investigations; and
• civil recovery investigations.

However, their availability is dependent on the type of investigation ongoing.

Authorities are not generally entitled to any documents, answers or information covered by legal professional privilege, subject to limited exceptions.

The early stages of investigations may involve covert techniques for the gathering of information and evidence before alerting an individual or business that an investigation has commenced. Covert investigative techniques may include the following:

• Using human sources and intrusive surveillance: This includes monitoring, observing and listening to people, and is governed by the Regulation of Investigatory Powers Act 2000.
• Obtaining communications data: ‘Communications data' is data held by a telecommunications operator about an entity and is distinct from the contents of the communication. The gathering of communications data is regulated by the Investigatory Powers Act 2016. As this is a less intrusive power, it is available to a wider number of authorities and can be authorised at a lower level.
• Intercepting communications and computer penetration: These powers are more intrusive and as such require warrants before their use. Further, intercepted communications are not admissible as evidence in criminal or regulatory proceedings in the United Kingdom.

c) What other considerations and concerns should be borne in mind at this stage of the process?

During the criminal asset tracing process, several considerations and concerns should be kept in mind:

• Cross-border issues: Asset tracing often crosses multiple jurisdictions, especially in international fraud or money laundering cases. In complex investigations, foreign assistance may be required and a joint investigation or agency taskforce could be considered. Mutual legal assistance requests (MLATs) are formal requests that can be used to obtain assistance from other jurisdictions and are subject to international treaties and a jurisdiction's domestic law. The MLAT process is often slow and cumbersome and can take a significant amount of time to yield results. More generally, obtaining financial information from foreign jurisdictions can be difficult and time consuming, meaning that such cross-border investigations may take a long time to be brought to court until sufficient evidence can be gathered.
• Uncovering hidden assets: Criminals often go to great lengths to hide their assets. Uncovering these assets requires a deep understanding of financial systems and the use of advanced investigative techniques. Conversely, those pursuing criminal confiscation are assisted by the so-called ‘lifestyle provisions', which state that where certain criteria are met regarding the criminal offences upon which the confiscation proceedings are founded, all assets obtained or held by the individual over a period of time are presumed to be the proceeds of crime and as such are subject to confiscation, unless the defendant can prove to the contrary and show a legitimate source for those assets. These provisions have rightly been called draconian and mean that there is often a reverse burden placed upon those subject to confiscation proceedings to justify and evidence the lawful source of their assets.
• Compliance with data protection laws: During investigations, it is important to comply with all relevant data protection laws and regulations when accessing and using personal data.
• Seizure and control of crypto assets: Issues surrounding the practical seizure and control of cryptocurrencies and digital assets can pose challenges. Recent legislation in the form of the Economic Crime and Corporate Transparency Act 2023 has sought to enhance powers in relation to crypto assets.

3.2 Confiscation: (a) What confiscation mechanisms are available in your jurisdiction? (b) How do these different mechanisms work in practice? (c) Are any procedural tools available in your jurisdiction that can enhance the effectiveness of the confiscation regime or capture a wider range of assets? (d) Can secondary proceeds be confiscated in your jurisdiction? (e) Is value-based confiscation allowed in your jurisdiction? If so, how does this work in practice? (f) Can the property of third parties or close relatives be confiscated in your jurisdiction? How are third-party interests addressed? (g) Can confiscated assets be used to provide restitution to the victims of crime? (h) Can confiscated assets be used to satisfy civil claims for damages or compensation arising from the offence? (i) Is confiscation possible without a conviction in your jurisdiction? If so, how does this work in practice?

(a) What confiscation mechanisms are available in your jurisdiction?

In the United Kingdom, the main mechanism for confiscation is a confiscation order under POCA 2002. A confiscation order requires the offender to pay back the equivalent of the benefit from his or her criminal conduct, which is determined by:

• the value of the defendant's benefit;
• the total value of the defendant's free property;
• any priority obligations; and
• the value of any tainted gifts – that is, gifts which directly or indirectly represent criminal property obtained by the defendant which have been given, or sold at an undervalue, to other parties.

Restraint orders are an interim measure under POCA 2002 and have the effect of freezing property and preserving a defendant's assets which may be necessary to meet a confiscation order. A restraint order can also be effective against third parties. A restraint order has the effect of preventing any person with notice of the order from dealing with the restrained person's realisable property under threat of being in contempt of court. As part of a restraint order, the applicant can also apply for the appointment of a receiver, who is appointed to manage the assets subject to the order.

Enforcement authorities also have the power to apply for a civil recovery order under Part 5 of POCA 2002. Generally, criminal confiscation proceedings upon conviction are the preferred method of seeking confiscation, on the basis that the powers and assumptions that apply post-conviction are wider than those available under civil recovery orders, making it easier to obtain an order and for any such order to be for a greater amount.

(b) How do these different mechanisms work in practice?

Confiscation orders: Confiscation orders are available to the court on conviction of an offender for an offence involving an element of financial gain and can be made in addition to any other type of sentence or fine. A confiscation order is not deemed to be a penalty but rather a mechanism whereby a convicted defendant is deprived of the benefits of his or her criminal conduct. Any such order is recoverable as a civil debt, but there is a period in custody set in default of payment which acts as an incentive to make payment. An accredited financial investigation officer will produce a statement of the alleged amount of the defendant's criminal benefit to the court. An order can only be made in the Crown Court and where the following conditions apply:

• The defendant has been convicted or committed for sentence in the Crown Court or committed for confiscation to be considered by the Crown Court; and
• Either:
• • the prosecutor has asked the court to proceed to confiscation; or
  • the court believes it is appropriate to proceed to confiscation.

Before making an order, the court considers factors such as:

• whether the defendant has a ‘criminal lifestyle' (as specifically defined in law);
• whether the defendant benefitted from his or her criminal conduct;
• the value of the benefit the defendant obtained; and
• the sum that would be recoverable from the defendant.

If a defendant is found to have had a criminal lifestyle, as defined, certain automatic assumptions are applied which mean that income and assets obtained over a defined period will be assumed to be the proceeds of crime and thus relevant to the calculation of any confiscation order, unless the defendant can show otherwise. The criteria for applying the lifestyle provisions are that either:

• an offence they have committed is specifically listed under POCA 2002 as a ‘lifestyle' offence (eg, drug trafficking, terrorism, blackmail, money laundering); or
• they were convicted of an offence which formed part of a ‘course of criminal conduct':
• • from which the benefit was at least £5,000; or
  • where an offence was committed over a period of at least six months and the total benefit was at least £5,000.

Once the lifestyle provisions are found to apply, four assumptions will apply:

• Any property transferred to the defendant in the six years up to the start of the confiscation proceedings was obtained as a result of his or her criminal conduct;
• Any property held by the defendant at any time after the date of his or her conviction was obtained as a result of his or her criminal conduct;
• Any expenditure by the defendant at any time in the six years up to the start of the confiscation proceedings came from the proceeds of his or her criminal conduct; and
• For the purpose of valuing any of the property obtained by the defendant, it is assumed to have been obtained free of any other interest in it.

The court will go on to decide the total benefit amount from criminal conduct, including by the application of the lifestyle assumptions where relevant. As is apparent from the wide-ranging nature of these assumptions, it will frequently be the case that the defendant will not have assets available to him or her to the total value of the calculated benefit amount – or the defendant will wish to argue that he or she does not. However, the regime is strict in this regard and the court will determine that the available amount for the purposes of confiscation is equal to the defendant's benefit from criminal conduct unless the defendant can show otherwise. The court does have an overriding discretion and should assess whether it would be disproportionate to make an order in a particular amount before doing so.

In considering the above factors, the court will:

• make an order in the sum of the amount of the benefit; and
• issue a sentence in default of payment of the order.

This can range from six months' to 14 years' imprisonment, depending on the sum ordered. Generally, time to pay any order will be allowed, taking into account the likely time required to liquidate any assets valued as part of the order – most often property, shares or vehicles, but potentially any real property. If payment is not made by the end of the allowed period, proceedings can be commenced to seek to activate the period in custody in default of payment. While it is possible to contest the making of a confiscation order post-conviction by way of a full hearing with witness evidence, in the vast majority of cases the confiscation order is ‘settled' and agreed between the parties. This is largely due to the imbalance of power between a convicted defendant and the prosecuting authority, which makes it unattractive for a defendant to risk running and losing a fully contested hearing and having an order made in a greater sum than was able to be agreed in advance. For prosecuting agencies, the advantage of agreeing confiscation orders in advance is the reduced need for resources to pursue full proceedings.

There is substantial evidence that many confiscation orders are never paid in full, or at all. Views as to why this is the case differ, but one significant factor is that orders are frequently based upon criminal lifestyle assumptions or involve hidden assets, meaning that they extend to the value of assets which are not necessarily directly held by the defendant, and require them either:

• to recover those moneys from third parties by the sale of assets; or
• to obtain equivalent moneys from other sources.

Frequent disputes hinge on the value of property assets, shares or other such property which must be sold in order to pay off the confiscation order. While there is a process for orders to be revised where assets sell for less than they were valued at, this is not straightforward and those subject to orders will often find themselves unable to realise the full value of assets deemed to be owed under the order. Failure to pay a confiscation order in full can result in the period of imprisonment in default being activated in whole or in part. Serving that period in custody does not wipe out the corresponding debt; and indeed, any interest accruing on the late payment of the sums owed can itself result in a further period of custody in default, although this is rare in practice. All these factors contribute to the gap between the value of orders made and the amounts actually recovered.

Restraint orders: Applications for restraint orders are made in the Crown Court and can be made even before arrest or charge has taken place; they are usually made without notice (ex parte). If made without notice, the applicant is under a duty of candour to provide full and frank disclosure to the court. There are five conditions that can be met for the making of a restraint order, of which the most common are the following:

• A criminal investigation has been started and there is reasonable cause to suspect the alleged offender has benefited from his or her criminal conduct; or
• Proceedings for an offence have started but not concluded and there is reasonable cause to suspect the alleged offender has benefitted from his or her criminal conduct.

A restraint order:

• may contain provisions for:
• • the appointment of a receiver; and/or
  • search and seizure to prevent removal of property; and
• will make exceptions for:
• • reasonable living expenses;
  • legal expenses; and
  • the carrying on of business.

Breach of a restraint order is dealt with by committal for contempt of court. A restraint order can be challenged, but this is often difficult in practice where criminal proceedings are pending and the courts will often be reluctant to lift a restraint entirely where there is a reasonable prospect of a future conviction for serious offences which could trigger confiscation proceedings. There are frequently disputes about the proper amount that should be allowed for reasonable living expenses and other costs, with the restrained party required to provide evidence as to his or her usual expenditure and the costs associated with it. The courts will not necessarily permit restrained assets to be used to pay legal fees, which can be a difficult in practice for those subject to restraint to resolve.

Civil recovery orders (CROs): Civil recovery proceedings are brought before the High Court. In an application for a CRO, the enforcement authority must prove (on the balance of probabilities):

• whether unlawful conduct has occurred; and
• whether property has been obtained through that unlawful conduct.

If it has, then the property is recoverable. The consequences of a court granting a CRO are that:

• an interim receiver is appointed;
• property may be detained;
• any ongoing civil recovery investigations must cease; and
• anybody who has property to which the order applies is prevented from dealing with it (subject to limited exclusions).

c) Are any procedural tools available in your jurisdiction that can enhance the effectiveness of the confiscation regime or capture a wider range of assets?

Section 67 of POCA 2002 provides powers to order money in a bank or building society to be paid in satisfaction of a confiscation order. This can apply:

• to accounts held in the defendant's name; or
• where it is determined that the defendant has an interest in an account held in the name of a third party.

These orders are frequently made by courts upon the making of a confiscation order and are generally considered to be the easiest step in recording moneys owed under an order.

Section 67 of POCA 2002 also provides the power to confiscate money in the form of cash seized from defendants under any power by any enforcement authority that can lawfully exercise that power and detained in connection with an investigation or prosecution. This power can be used as an alternative to obtaining consent from a defendant for paying over money.

Further measures which can assist with the enforcement of confiscation orders are compliance orders. These allow the Crown Court to impose restrictions, prohibitions or requirements that it considers appropriate to ensure that a confiscation order is effective. A key example is a restriction/prohibition on overseas travel by an order for surrender of the defendant's passport. Given that a period in default of payment is effective only if a defendant can be brought before the courts, such orders will often be made where there is a perceived risk of them fleeing the jurisdiction or evidence of significant assets overseas.

The court can also appoint an enforcement receiver under Section 50 of POCA 2002 where a confiscation order has not been satisfied. Enforcement receivers have wide powers to assist in taking possession of, managing and realising property to satisfy the order.

(d) Can secondary proceeds be confiscated in your jurisdiction?

Yes, on the basis that secondary proceeds are assets subject to confiscation which do not directly result from the criminal activity which is the basis for the confiscation proceedings. The defendant must pay the total amount of the confiscation order; but while the amount of the order is calculated with reference to specific assets, the debt owed is independent from those assets. Before the order is made, an investigation will be conducted to determine the assets available to the defendant. Where a defendant makes a gift or transfers property to someone else at an undervalue within six years of the start of the proceedings, or at any time if the property was acquired through or in relation to general criminal activity, this will constitute a ‘tainted gift'. For the purposes of a confiscation order, a tainted gift is treated as the defendant's property/secondary proceeds and is assumed to be part of his or her criminal benefit unless the defendant can prove the contrary.

(e) Is value-based confiscation allowed in your jurisdiction? If so, how does this work in practice?

Yes. A confiscation order is calculated by reference to the total value of the ‘criminal benefit' obtained by the offender. However, the order itself is not asset based and does not generally involve the confiscation of specific property (save for orders for the payment over of moneys held in bank accounts). It rather requires the person subject to the order to pay an amount equivalent to the assets taken into account as part of the order. The order operates as a civil debt that the offender must pay. The law does not require the prosecution to establish a direct link between a particular asset and the criminal activity in particular when the criminal lifestyle provisions are applied.

(f) Can the property of third parties or close relatives be confiscated in your jurisdiction? How are third-party interests addressed?

Yes.

Property in the hands of a third party can be subject to enforcement of a confiscation order if it is determined that the defendant has an interest in the property, whether in whole or in part. POCA 2002 provides a framework for Crown Court judges to determine a defendant's interests in property when a confiscation order is made. The court may decide:

• the amount of a defendant's ownership in a property at the time a confiscation order is issued; and
• the extent of any third-party interests.

Third parties have a right to make representations about property held and the court may order a third party to provide specific information by a particular date to help it decide on the respective interests of the defendant and the third party in any particular asset.

(g) Can confiscated assets be used to provide restitution to the victims of crime?

Yes, the court can provide restitution to the victims of crime in the United Kingdom by the grant of a compensation order. Where the court believes the defendant does not have sufficient means to satisfy both a confiscation order and a compensation order, it can:

• order the defendant to pay the confiscation order; and
• direct that those payments be used to pay the compensation order first before the rest of the confiscation order is distributed.

Two points are worth noting in this context:

• Compensation orders are generally for relatively small amounts compared to the large figures often found in confiscation orders, save in cases of financial crime where there is clear and definable loss to a victim which can be easily quantified; and
• A proportion of any confiscation order recovered by the courts is payable to the investigating and prosecuting agencies to contribute towards their costs in investigating and bringing the confiscation proceedings. The remainder is then payable to the government.

(h) Can confiscated assets be used to satisfy civil claims for damages or compensation arising from the offence?

It is possible for the court to issue a compensation order that requires the defendant to pay for any personal injury, loss or damage arising from the offences committed. Where the court believes the defendant does not have sufficient means to satisfy both a confiscation order and a compensation order, the court can direct that confiscated assets be paid out to satisfy the compensation order. If a victim starts or intends to start proceedings in respect of the conduct, the court's duty to make a confiscation order becomes a power to make any order the court sees fit (including no order at all). Any civil claim for damages will generally be distinct from criminal confiscation proceedings; albeit that if an order has already been made against a defendant in civil proceedings, that will need to be taken into account in the calculation of the available amount when determining the total value of any confiscation order.

(i) Is confiscation possible without a conviction in your jurisdiction? If so, how does this work in practice?

Enforcement authorities have the power to apply for a CRO under Part 5 of POCA 2002. In an application for a CRO, the enforcement authority must prove (on the balance of probabilities):

• whether unlawful conduct has occurred; and
• whether property has been obtained through that unlawful conduct.

If it has, then the property is recoverable. The consequences of a court granting a CRO are that:

• an interim receiver is appointed;
• property may be detained; and
• any ongoing civil recovery investigations must cease.

Anybody who has property to which the order applies is prevented from dealing with it (subject to limited exclusions).

Unexplained wealth orders (under Part 8 of POCA 2002) require a defendant to provide information and documents to explain how property was obtained. If the defendant fails without reasonable excuse to comply with the requirements of the order, the property is presumed to be recoverable property in civil recovery proceedings. These orders can be made against politically exposed persons or those suspected of involvement in serious crime. A company can also be subject to an order following the Economic Crime (Transparency and Enforcement) Act 2022.

The Criminal Finances Act 2017 extends cash forfeiture powers to money held in bank and building society accounts. This allows investigators to detain and forfeit cash in bank accounts in proceedings in the magistrates court instead of the previous procedure in Crown Court via confiscation following a conviction.

Property can also be made subject to forfeiture without criminal conviction by companies through a deferred prosecution agreement. These agreements involve the corporate defendant agreeing to pay financial penalties and cooperate with prosecutors in return for suspending an indictment against the corporate entity. All deferred prosecution agreements are subject to approval by the court.

3.3 Repatriation: (a) What provisions (if any) govern the repatriation of assets in your jurisdiction? What specific considerations and concerns should be borne in mind in this regard?

(a) What provisions (if any) govern the repatriation of assets in your jurisdiction? What specific considerations and concerns should be borne in mind in this regard?

Proceedings which result in the grant of a confiscation order may be enforced in a foreign jurisdiction through a mutual legal assistance request for the assets in the jurisdiction to be returned to the requesting jurisdiction through international agreements (eg, the United Nations Convention against Corruption).

Further, restraint orders often involve a clause that requires the subject of the order to provide a list of all assets they hold. The second part of the order can then require the subject to repatriate any assets they have outside of the United Kingdom back to the United Kingdom in order to permit them to be effectively restrained with the potential for them to be made subject to confiscation in due course. Before making such an order, the court must carefully consider why it is more appropriate than the prosecutor seeking mutual legal assistance from the country where the assets are located.

4 Trends and Predictions

4.1 How would you describe the current asset recovery landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The current asset recovery landscape in the United Kingdom is characterised by a solid commitment to depriving criminals of the proceeds of their crimes, although there remains a disparity between the total amount of confiscation orders made and the moneys actually recovered as a result of those orders. The government has taken several actions to strengthen the asset recovery regime, including:

• establishing asset confiscation enforcement teams;
• investing in improved IT; and
• introducing new powers through the Criminal Finances Act 2017.

Regarding trends, there has been a focus on improving the process by which confiscation orders are made and enforced. The government has also been working on facilitating the transfer of funds representing the amounts of balances of suspected criminal accounts currently held by the financial sector to further invest in combating economic crime.

Looking ahead, there are several anticipated developments in the next 12 months. The government has proposed reforms to the confiscation regime contained in Part 2 of the Proceeds of Crime Act 2002. The reforms aim to give courts more powers to:

• make realistic and proportionate confiscation orders;
• improve the enforcement of orders; and
• speed up confiscation proceedings.

5 Tips and Traps

5.1 What would be your recommendations for effective asset tracing and recovery and what potential pitfalls would you highlight?

The following key steps are involved in effective asset tracing and recovery:

• Identification: The first step is to identify additional tangible and intangible assets associated with the target across jurisdictions.
• Verification: Once assets have been identified, it is essential to verify ownership of them through source enquiries or documented evidence, where available.
• Valuation: It is crucial to provide the current market value of all identified assets through publicly available information.
• Freezing: The implementation of measures to freeze assets to prevent further dissipation is also necessary.
• Recovery: The final step is taking possession and returning assets.

However, there are potential pitfalls to be aware of:

• Complex financial vehicles: Sophisticated criminals often use complex financial vehicles to conceal the location and source of misappropriated assets. This can make it challenging to identify assets located across multiple jurisdictions.
• International jurisdiction: Each international jurisdiction enforces local laws and regulations, which can complicate recovery claims in these international jurisdictions.
• Speed of criminal activity: Technology enables criminals to move assets quickly and easily across borders. This requires countries to respond swiftly to the speed of criminal activity.
• Human factor: While technology plays a significant role in asset tracing and recovery, the human factor is still crucial. The need for human investigators will always exist.

It is also worth bearing in mind the likely outcome of any confiscation proceedings, depending on the standing of any interested parties in respect of the assets involved. The purpose of criminal confiscation proceedings is to deprive those who have benefited financially from criminal activity of that benefit. It is not intended to compensate or provide restitution to the victims of those crimes. While the courts are empowered to make compensation orders and will give priority to the payment of such orders over and above the payment of confiscation orders where necessary, there is no direct link between the amount of any compensation order and the total amount payable under a confiscation order. In addition, restraint proceedings can have the effect of freezing assets for considerable periods, meaning that those with an interest in those assets may be unable to realise those interests.

Co-Authored by James Moss

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.