What is the Proceeds of Crime Act (POCA)?

Brought into effect on the 24^th March 2003, the Proceeds of Crime Act (or POCA) was designed to grant law enforcement more power to seize the proceeds of organised crime, such as money laundering. In the introduction to the POCA, it states that its purpose is to ‘provide confiscation orders in relation to persons who benefit from criminal conduct.’   

Simply put, it was implemented to make it harder for criminals to reap monetary gains from financial crime. Prior to the existence of the POCA, the confiscation of criminal proceeds was dictated by two different policies: the Drug Trafficking Act 1994 and the Criminal Justice Act 1988. It’s worth noting that these two policies still apply to proceeds of financial crime that was committed before 2002.

What Powers Does the Proceeds of Crime Act Give to Investigators?

One of the key strengths of the Proceeds of Crime Act is the extensive range of powers it provides to law enforcement. The Act isn’t limited to targeting just one kind of criminal activity it casts a wide net over offences such as theft, fraud, money laundering, and even tax evasion.

This breadth means investigators can:

• Freeze and seize assets suspected to be linked to criminal conduct even before someone is convicted.
• Carry out searches and gather evidence relating to financial transactions.
• Obtain production and disclosure orders, compelling individuals and businesses to share information.
• Apply for restraint orders to prevent suspects from moving or disguising assets during an investigation.
  
  

Ultimately, POCA equips authorities with the legal tools needed to disrupt criminal enterprises and recover unlawfully obtained wealth, regardless of how those proceeds are concealed or transferred.

The Principal Money Laundering Offences

The POCA outlines the most significant money laundering crimes, which you can be prosecuted and charged for. These are as follows:

- Concealing or transferring the proceeds of financial crime

The POCA outlines the most significant money laundering crimes for which you can be prosecuted and charged. These are as follows:

- Concealing or transferring the proceeds of financial crime

This offence not only covers moving illicit funds from one place to another, but also includes any act or omission intended to disguise the origin of illegally obtained assets, or to prevent law enforcement from seizing them. Concealment can take many forms such as routing funds through complex ownership structures, moving money between multiple accounts, or even simply denying the existence of assets. Importantly, this is considered an offence even if the person involved does not have full knowledge that the money or property in question originates from criminal activity.

- Assisting someone else in retaining the benefit of financial crime

- Acquiring or possessing the proceeds of financial crime yourself

This offence covers situations where an individual obtains or holds assets that stem from criminal activity. For instance, acquiring goods such as luxury real estate, designer jewellery, or high-value vehicles using unlawfully obtained funds falls under this category. Even if someone simply accepts payment in cash, knowing or suspecting that the funds come from criminal conduct, they can be prosecuted under POCA. Importantly, this applies even if the goods themselves were purchased with legitimate funds; what matters is the origin of the money used in the transaction.

- Failing to disclose a knowledge or suspicion of money laundering

- Tipping off a suspect to inform them that they’re under investigation

Arranging Offences Under POCA

Another key offence under the Proceeds of Crime Act is “arranging.” Under POCA, arranging involves any action where someone takes steps to assist in the acquisition, retention, use, or control of criminal property. This doesn’t just mean hiding illicit funds for yourself—the law covers helping anyone else benefit from money that stems from unlawful activity.

Typical examples include:

• Moving or hiding funds on behalf of someone else, such as placing money in a friend’s account to disguise its origins.
• Facilitating the transfer of illicit assets overseas to put them out of reach of law enforcement.
• Creating false paperwork or providing misleading information say, for an investment or property purchase to mask the true source of the funds.
  
  

Even if your involvement appears minor, arranging offences can include simply helping to “wash” money so it appears legitimate, or taking steps that allow criminal property to enter the mainstream financial system. Failing to recognise or report these instances can also leave individuals and organisations exposed under the scope of POCA.

Tainted Gifts and Property

Tainted gifts and tainted property are the terms used to describe any assets or gifts which are transferred to another person by an individual with a “criminal lifestyle”.

In order to be considered as someone with a criminal lifestyle, an individual will have to meet certain criteria which are outlined in the POCA. For example, if they have committed an offence over a period of 6 months or more, which they have benefited from financially, or if they have been involved in a course of sustained criminal activity.

Once the individual in question is deemed to have a criminal lifestyle, then every transfer in the 6 years prior to the date they have been charged could be labelled as a potential tainted gift, or tainted property.

Tainted gifts can be more subtle than you might think – for example, if somebody sells a house for significantly less than its market value, it would still be considered a tainted gift, as the recipient has benefited substantially.

Confiscation Proceedings

Confiscation proceedings is the name given to the process of seizing the proceeds of financial crime, in the form of money or valuable assets. This process can only be initiated by the prosecution team or the Crown Prosecution Service themselves, at the end of the case.

At this stage, police will work with a Financial Investigation Officer to establish the criminal benefit – this is a monetary figure which the offending party is then legally obliged to pay. If they can’t pay this amount of money, they’ll be asked instead to pay the available figure – which is effectively the value of all the assets they possess.

When the repayment figure is agreed, the defendant is also given a date they need to pay it by, and failing to meet this deadline can often result in a prison sentence.

The Criminal Finances Act 2017

The Criminal Finances Act 2017 made several important amendments to the POCA, granting the government extended authority to combat financial crimes by closing loopholes in the existing anti-money laundering law.

For example, the Criminal Finances Act 2017 allows for the extension of the “memoratium period” – in other words, the defendant is given more time to repay their criminal benefit. This means they’re more likely to hand over the proceeds of their crime, rather than serve time in prison for failing to repay, which is ultimately more beneficial for the government. Confiscated funds are repurposed for positive action; they might help to fund further investigations into financial crime, or go towards community projects.

SmartSearch Can Help

AML regulations are frequently updated to reflect legislation and policy, which is amended fairly often itself. When it comes to ensuring that your company is AML compliant, there’s a multitude of different checks and screenings to carry out on your potential clients and customers, and it can be difficult to make sure that there’s no stone left unturned.

SmartSearch is a complete AML solution; we’ll assist your firm with AML compliance every step of the way, from PEP screening right through to Enhanced Due Diligence. Our expertly implemented AML measures mean you can rely on us for high-quality service and guaranteed compliance.