Bankside Law

The Long Arm of the Law - financial reporting orders and serious crime prevention orders

Once upon a time criminal cases concluded with the jury’s verdict and the court’s sentence upon a finding of guilt. The introduction of statutory powers to confiscate assets has rendered those convicted of criminal offences, even after undergoing the allotted punishment, accountable for any financial benefit derived from criminal activity with the added threat of a term of imprisonment in default of payment. Legislation in force since April 2006 – section 76 Serious Organised Crime and Police Act 2005 – and April 2008 – sections 1 and 19 Serious Crime Act 2007- have extended the courts’ powers to render accountable those convicted of certain criminal offences for periods of time far in excess of any sentence or licence period.  Big Brother is well and truly watching.

What are these Draconian powers?

Financial Reporting Orders
The first is the power to make a Financial Reporting Order (FRO) under section 76 Serious Organised Crime and Police Act 2005.  Such an order can only be made where someone has been convicted of an offence specified in the Act, where the court is sentencing or “otherwise dealing with” the offender – for instance where the court is dealing with outstanding Confiscation issues – and ONLY if the court is satisfied that the risk of the defendant committing another specified offence is “sufficiently high”.

The offences specified in the Act include not only those which might ordinarily fall within the definition of “serious organised crime” such as drug trafficking, terrorism funding offences and people trafficking but also offences such as Fraud under section 1 Fraud Act, obtaining by deception, false accounting, money laundering, bribery and corruption and tax and VAT offences.

The effect of an order, which commences once made, is to require the defendant to make a financial report – the ambit of which can be extremely onerous – at specified periods to a specified person ( such as the Financial Reporting Officer attached to the Serious Organised Crime Agency). The requirement to report at regular intervals can extend to a maximum period of 15 years (unless the sentence following conviction was one of life imprisonment when the maximum length is 20 years) or a maximum of 5 years if the order is made in the magistrates’ court. The order is designed to operate not only following release from a sentence of imprisonment but whilst serving a sentence of imprisonment.

The act creates 2 summary offences punishable with a maximum of 51 weeks imprisonment of without reasonable excuse including false or misleading information in a report and otherwise failing without reasonable excuse to comply with any requirement.

Serious Crime Prevention Orders
The second is the power to make a Serious Crime Prevention Order (SCPO) under sections 1 and 19 Serious Crime Act 2007.

Such orders can be made by the High Court in the absence of a conviction for a serious offence as defined by the Act where the court is satisfied that the person has been “involved” in serious crime in England, Wales or elsewhere. The Crown Court can only make such an order where a person has been convicted of a serious offence (as defined in the Act) by the Crown Court or upon committal to the Crown Court for sentence following conviction of such an offence in the magistrates’ court.  The relevant courts must have reasonable grounds to believe that the order would protect the public by preventing, restricting or disrupting involvement by the person in serious crime in England and Wales and an application for such an order can only be made by the Director of Public Prosecutions, The Director of the Revenue and Customs Prosecutions Office or the Director of the Serious Fraud Office.

Offences falling within the definition of “serious” offences are not only offences such as drug trafficking and people trafficking but also include, as is the position with specified offences in relation to FROs, offences such as money laundering, fraud, corruption and bribery and offences in relation to public revenue.

Such orders can be made not only in relation to individuals but also against a body corporate, a partnership or an unincorporated association. Orders can be wide ranging in their terms and can include prohibitions or restrictions in relation to persons with whom the defendant can associate or communicate, premises that the defendant can reside in or visit, working arrangements and travel arrangements. The orders can also impose restrictions relating to finances such as a restriction on the possession or transfer of cash.

Although the maximum duration of an SCPO is 5 years its implementation can be delayed until a specified date – such as the date of release from prison – and the High Court has the power to make a subsequent order providing all the statutory requirements still apply.

Breach of an SCPO without reasonable excuse is a criminal offence punishable in the magistrates’ court with a maximum of 12 months imprisonment and in the Crown Court with a maximum of 5 years imprisonment.

It is expected that the frequency of applications for FROs and SCPOs will steadily increase illustrating the readiness of prosecuting authorities and the courts to extend control over the individual well beyond the period of punishment for the original offence.

© Aileen Colhoun, December 2009