The first appellant had been convicted of substantial frauds in Israel. He appealed against world wide asset freezing (PFO) and disclosure (DO) orders made against him. Neither the appellant, nor his offences were connected with the UK. A bank account within the UK had been disclosed.
Held: The appeals succeeded (Judge and Clarke dissenting). The Act could not have the full extra territorial effect suggested.
Lord Phillips summarised his conclusions: ‘(i) The courts below placed undue weight on the definition of ‘property’ in POCA.
(ii) The appellants have placed undue weight on the presumption that a statute does not have extraterritorial effect.
(iii) States have, by agreement, departed from the customary principles of international law in the case of confiscating the proceeds of crime. Of particular relevance is the 1990 Strasbourg Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime. POCA must be read in the light of that Convention.
(iv) The Convention recognises that the courts of state A may make an order purporting to vest in the authorities of state A property that is situated in state B in circumstances where the property is the proceeds of the criminal conduct of a defendant subject to the criminal jurisdiction of state A.
(v) The Convention provides that effect should be given to such an order by confiscation proceedings in state B at the request of state A.
(vi) The answer to the issue raised by the PFO appeal depends upon an analysis of both the scheme and the language of POCA considered in the light of the Convention
(vii) Parts 2, 3 and 4 of POCA provide for (a) the imposition in personam of obligations in respect of property worldwide; (b) measures in rem to secure and realise property within the United Kingdom; and (c) requests to be made to other states to take such measures in respect of property within their territories.
(viii) Part 5 of POCA makes provision for in rem proceedings in respect of property within the United Kingdom but not outside it.
(ix) The scheme of POCA, as described above, accords with arrangements made by the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 (SI 2005/3181) (‘the Order’) for giving effect to requests from other states in relation to the confiscation of the proceeds of crime.
(x) The scheme of POCA as described above also accords with the requirements of a coherent international scheme for confiscation of the proceeds of crime and with principles of public international law. The converse is the case if SOCA’s submissions as to the extraterritorial effect of Part 5 are correct.
(xi) Section 286 is an anomalous enigma and cannot justify giving the provisions of POCA that relate to the rest of the United Kingdom a meaning different from that which they would bear in the absence of section 286.
(xii) For all these reasons the PFO appeal should be allowed.’
Sir Anthony Hughes said: ‘What cannot, as it seems to me, be the correct construction is that, as SOCA was obliged to submit, it has jurisdiction to seek a (mandatory) civil recovery order over property in China which is the product of a crime committed in China by an offender who has never left that country.’
Lord Phillips, President, Lady Hale, Lord Brown, Lord Judge, Lord Kerr, Lord Clarke, Lord Wilson, Lord Reed, Sir Anthony Hughes
[2012] UKSC 35, UKSC 2010/0182, [2012] 5 Costs LO 668, [2012] 3 WLR 379, [2012] WLR(D) 238
Bailii, Bailii Summary, SC Summary, SC, WLRD
Proceeds of Crime Act 2002, 1990 Strasbourg Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime
England and Wales
Citing:
At First instance – Serious Organised Crime Agency v Perry and Others Admn 30-Jul-2009
The respondents sought to have set aside a world wide asset freezing and associated orders obtained by SOCA against them. They said that the Court had no jurisdiction over them, and that the Agency was guilty of wilful non-disclosure. They first . .
Cited – Regina v Cuthbertson HL 1981
With ‘considerable regret’, the power of forfeiture and destruction conferred on the court by section 27 of 1971 Act did not apply to offences of conspiracy, and could not be used to provide a means of stripping professional drug-traffickers of the . .
Cited – Government of the Republic of Spain v National Bank of Scotland SCS 24-Feb-1939
Lord Justice-Clerk Aitchison considered a provision claiming extra territorial effect, and said: ‘such ‘decrees’ of a foreign country as purport to have extra-territorial effect, and to attach property in a subject situated, and at a time when it is . .
Cited – Societe Eram Shipping Company Ltd v Compagnie International De Navigation and Others CA 7-Aug-2001
Judgment creditors obtained a garnishee order nisi, but the bank objected to the order being made absolute. The account was in Hong Kong, where there was a real danger, that the law would not relieve them of their obligation to the account holders . .
Cited – Societe Eram Shipping Company Limited and others v Hong Kong and Shanghai Banking Corp Ltd, Compagnie Internationale de Navigation HL 12-Jun-2003
The appeal concerned a final third party debt order (formerly a garnishee order). A judgment in France was registered here for enforcement. That jurisdiction was now challenged.
Held: A third party debt order is a proprietary remedy operating . .
Cited – Pattni v Ali and Another PC 20-Nov-2006
(Isle of Man (Staff of Government Division)) The Board considered the possibility of extra-territorial jurisdiction over property.
Held: It should generally be expected that an order having the effect of transferring a real right of ownership . .
Appeal from – Perry and Others v Serious Organised Crime Agency CA 18-May-2011
The court was asked ‘Does a court in England and Wales have the power under Part 5 of the Proceeds of Crime Act 2002 to make a recovery order in favour of the trustee for civil recovery in respect of recoverable property outside this jurisdiction, . .
Appeal from – Serious Organised Crime Agency v Perry and Others CA 29-Jul-2010
The court heard appeals against disclosure orders made under the 2002 Act. The appellants argued that neither the offence, nor the assets nor the appellants themselves were within the jurisdiction. . .
Cited – King v Director of the Serious Fraud Office HL 18-Mar-2009
Authorities in South Africa sought assistance in recovering what they said were assets acquired in England and Scotland with the proceeds of crime in South Africa, and in particular a restraint order, an assets declaration and other investigative . .
Appeal From – Serious Organised Crime Agency v Perry Admn 28-Jun-2010
The first defendant’s bankers had heard of his conviction for fraud in Israel and had notified his and associated bank accounts to SOCA. He now appealed against ex parte world wide asset freezing (PFO) and disclosure orders (DO) made againt him. The . .
Cited by:
Cited – Waya, Regina v SC 14-Nov-2012
The defendant appealed against confiscation orders made under the 2002 Act. He had bought a flat with a substantial deposit from his own resources, and the balance from a lender. That lender was repaid after he took a replacement loan. He was later . .
Lists of cited by and citing cases may be incomplete.
Criminal Practice, International, Jurisdiction
Updated: 31 December 2021; Ref: scu.463144