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Last Updated: Thursday, 11 January 2007, 18:02 GMT
UK seeks new way to make criminals pay
Analysis
By Jeremy Scott-Joynt
Business reporter, BBC News

The Assets Recovery Agency has gone from inception to abolition in barely five years.

Handcuffs
Prosecution has till now been the UK's priority

It was set up to provide an alternative way of taking criminals' profits away from them - the theory being that less profit meant not only less incentive, but also less investment into further criminality.

Experience in other countries had made it clear that simply confiscating assets after a successful criminal prosecution would not be enough.

Tackling crooks through the civil courts, by proving criminality and its profits to the less burdensome standard of a balance of probability, would also be necessary.

So, with the passing of the huge, 500-section Proceeds of Crime Act (PoCA) in 2002, dealing with civil recovery became ARA's job.

Coining it

There are divergent views of how successful ARA has been.

A common criticism is that in the first three years of its existence ARA cost about 60m but only managed to retrieve some 8m.

Probably the right thing would be a sufficient lifespan, in which we could prove the legislation
Jane Earl, ARA Director

Comparisons are sometimes made with Ireland's Criminal Assets Bureau, one of the inspirations for the UK's agency, where running costs of some 5m euros ($6.5m; 3.3m) produced a total take of more than 21m euros in 2005-6.

ARA acknowledges it made a slow start in that sense - but counters that it has frozen or seized more than 130m during its existence, effectively taking that sum out of the criminal economy.

There are also signs that this year's haul of actual cash proceeds will top 15m.

Back to the future

Whether success or failure, however, the agency is now to disappear, becoming part of the massive Serious Organised Crime Agency (Soca).

The process could take as much as a year, since new legislation is needed to unpick the powers over civil action that PoCA gave the agency and, in particular, its director.

But the new move is in one sense a return to earlier plans.

When Soca was first being designed, the idea of rolling ARA into it was mooted.

But Jane Earl, ARA's director, believes that would have been premature.

"At the time, I said that probably the right thing would be a sufficient lifespan , in which we could prove the legislation and then widen powers out for other agencies to use alongside mainstream powers," she says.

So even if the amalgamation may be coming a little early, it is not entirely a surprise.

End of the hierarchy?

Instead of seeing a negative with the abolition of ARA, there are those who see opportunities under the new plan.

The whole idea is that the first time you strike, they don't know...You only get one bite at the cherry
Anthony Riem, lawyer

For many - including many inside ARA and the UK's various police forces - a key weakness of the structures set up by PoCA has been what is termed the "hierarchy".

Simply put, it means that civil recovery can only be tried once criminal confiscation has failed. And only after that can criminal assets be taxed.

The merger is going to demand new legislation, which will also give the civil powers currently held solely by ARA to criminal prosecutors in the Crown Prosecution Service, HM Revenue & Customs and the Serious Fraud Office.

"It's about using more of the powers more of the time in more ways," says Jane Earl.

And that, to London asset recovery lawyer Anthony Riem, presents an opportunity.

"Provided you're not looking at a scaling down of going after assets, then it looks like we're having more joined-up processes," he says.

"The skill in going after someone and the art of a successful recovery is to look at your strategy and choose the one which maximises your prospect of return, not by a rigid or formulaic procedure.

"The whole idea is that the first time you strike, they don't know. You only get one bite at the cherry. If the first time a criminal knows about it is when his assets are frozen, then he's much less likely to be able to do anything about it."

Trouble in store

For the moment, Jane Earl promises continuity.

"For all of our existing respondents it is very much business as usual," she says.

The big change is set to take place in early 2008 - by which time the agency will have spent almost a year under an interim director, since Ms Earl has already announced her intention to step down in April this year.

ARA's staff have been promised transfers to Soca, and initially may stay as a discrete entity within Soca.

Twenty-pound notes
ARA's job has been to tackle criminals' profits

But there are some concerns.

For one thing, insiders say, the 4,500 staff in Soca - itself a merger of two large national police squads and elements of two government departments - are still bedding down through the difficult process of mingling different practices and cultures.

For another, Soca has repeatedly made it clear that it concentrates on what is dubbed in the UK "Level 3 crime" - organised gangs operating nationally and across borders.

Although ARA has certainly spent much of its time on high-profile cases referred by prosecutors, police and customs, it has also worked to tackle street-level criminals - from drug dealers and gang members to sellers of counterfeit goods and benefit cheats, in concert with local authorities.

There are fears that the merger could mean a narrowing of the focus.

Countering that, however, is the view that Soca's more intelligence-led approach could offer a solid fit with asset recovery.

And the larger agency has long made it clear that it wants the hunt for criminal profits to be central to the way it operates.

Over the past year, it has been hiring financial investigators in large numbers, both to help staff a dedicated proceeds of crime department and to embed financial specialists across its operations.

Those behind the merger plan will be hoping that synergy - rather than culture clash - will be the result.


SEE ALSO
Putting the bite on criminal assets
14 Jun 06 |  Northern Ireland
Agency aims to take crime gains
14 Jun 06 |  UK Politics
Agency takes aim at false profits
20 Oct 04 |  Business

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