“Can I get my Rolex back?” – the Seizure and Forfeiture of Listed Assets

Introduction

Many criminal defence solicitors will be very familiar with cash detention orders and Account Freezing Orders made by the magistrates’ court under Part 5 of the Proceeds of Crime Act 2002 (‘POCA’).

Part 5 just keeps growing. First it was cash forfeiture in the magistrates’ court and ‘Recovery Orders’ in the High Court. Then the magistrates’ court civil jurisdiction expanded to add bank accounts containing suspected funds (from 31^st January 2018) and suspicious ‘listed assets’ from 16^th April 2018 (insertions to POCA under the Criminal Finances Act 2017). Finally (or not), the magistrates court will be able to make Forfeiture Orders against cryptoassets under S303Z41, added by the Economic Crime and Corporate Transparency Act 2023 once regulations are published.

Law enforcement personnel are using the powers extensively under the Listed Assets Regime. A total of 3,500 Forfeiture Orders were recovered in the financial year 2022 to 2023. Of these, 2,600 orders (74%) were cash seizures, 820 orders (24%) were Account Freezing Orders (“AFOs”), and 70 orders (2%) were Listed Asset Orders (‘LAOs’)[1].

In this article, I concentrate on what a solicitor faced with a client with a Listed Asset enquiry should be considering.

What is a Listed Asset?

An important consideration is that the Listed Asset regime in POCA is just a ‘bolt on’ to the already established civil procedures for cash and bank accounts. The aim of the new regime is set out in the Explanatory Memorandum to the POCA 2002 (Recovery of Listed Assets: Code of Practice) Regulations 2021, see para 7.6:

The Code was introduced in 2018 following the creation of new powers brought in by section 15 of the CFA to search (303C of POCA), to seize (section 303J of POCA) and forfeit (section 303O of POCA) listed types of personal or moveable property (“listed assets”) that are suspected to be the proceeds of unlawful conduct or intended for use in such conduct. These new powers were introduced in response to criminals’ resourcefulness in using any means of holding and moving illicit funds. A description of the contents of the code is available in the explanatory memorandum to the Proceeds of Crime Act (Recovery of Listed Assets: Code of Practice) Order 2018 (SI 2018/85) [n.b. this is now replaced by the 2021 Regulations].

The assets which may be seized by law enforcement personnel under the Act are listed under s303B – thus ‘listed asset’. They are:

1. Precious metals;
2. Precious stones;
3. Watches;
4. Artistic works;
5. Face-value vouchers;
6. Postage stamps.

There is a minimum value requirement of £1,000. The value of multiple assets may be aggregated[2].

When case a Listed Asset be seized?

As an example, take a situation where an individual’s home has been searched and his Rolex watch has been seized as a listed asset. That power of seizure is set out at S303J (1) POCA:

A relevant officer may seize any item of property if the relevant officer has reasonable grounds for suspecting that –

1. it is a listed asset,
2. it is recoverable property or intended by any person for use in unlawful conduct, and
3. the value of it is not less than the minimum value.

The ‘recoverable property’ test is well known and used in both cash and AFO applications. So too is the  ‘intended by any person for use in unlawful conduct’ part of the test. However, it is suggested that while it may be easy to imagine that money (in cash or in a bank account) might be used for future crime (the 2^nd limb), it is difficult to see how a Rolex watch could be. In reality, it is the first limb that it the most likely one to be utilised: i.e. ‘recoverable property’. If the law enforcement agency pleaded both limbs, that would tend to water down any claim that their suspicion was ‘reasonable’ in the sense that it was based on some coherent reason.

What happens next?

After initial seizure, a process similar to that in cash detention and AFO cases applies. The initial seizure is only lawful for a limited period, namely 6 hours. After that, a senior officer needs to authorise further detention. That authorisation adds a further 42 hours to the police detention period, giving a total of 48 hours. This is the same period that applies for cash/ AFO cases, and excludes Bank Holidays and weekends.

After this 48 hour period, any further detention must be authorised by a magistrates’ court (s303L POCA). An order of detention for up to 6 months may be granted by the magistrates’ court, subject to a maximum 2 year extension period (s303L POCA). In other words, the Rolex can be kept in detention and that detention can be extended by the Court up to the maximum period of 2 years and then the watch must be released, or the police must make their application for forfeiture. At that point, the test is not whether there is a ‘reasonable suspicion’ that the watch is ‘recoverable property’. The test on a forfeiture application is whether the watch has been proven to the civil standard to be recoverable property.

Challenging a LAO

To the client who asks: “Can I get my Rolex back?”, the answer may be “yes”, or more accurately “possibly”. An extension to detention applications can be resisted or, alternatively, an application can be made on the client’s behalf for the release of the Rolex under S303N.

There is still no specific case law on this section, but practitioners can utilise the abundant authorities available on ‘recoverable property’ and ‘reasonable suspicion’. In summary, it is important to keep in mind that the ‘recoverable property’ is simply ‘property obtained through unlawful conduct’ (s242 POCA). The reference to ‘obtained’ is expanded upon at S242 (2)(b):

‘it is not necessary to show that the conduct was of a particular kind if it is shown that the property was obtained through conduct of one of a number of kinds, each of which would have been unlawful conduct’

This prevents an Applicant from simply alleging some unknown crime; there must be more precision than that (see Angus v UKBA [2011] EWHC 461 (Admin)).

Unlawful conduct means crime wherever it is committed, as long as it is unlawful under UK criminal law, and if committed overseas, also unlawful there too.

ARA v Green & others [2005] EWHC (Admin) 3168  is authority for the proposition that no claim for civil recovery can be based solely on evidence of lifestyle, i.e. simply a lack of evidence of lawful income. But a failure to account for how a lifestyle was maintained, or an explanation which was false, may well lead to an inference that the property was recoverable – see ARA v Olupitan [2008] EWCA Civ 104.

Conclusion

LAOs are here to stay. There may not be the same sense or urgency when it is watch (even a Rolex watch) that is detained rather than cash or a bank account frozen. However, a client may want to make early challenges. One thing is for certain, we are going to be seeing a lot more LAOs.

[1] Home Office, Asset Recovery Statistical Bulletin: Financial Years ending March 2018 to March 2023, published 7^th September 2023.

[2] Blackstone’s 2024, D8.29