Whenever I give a talk in Europe I always wonder first of all whether the flags of the United Kingdom are going to change. They nearly changed two weeks ago with the Scottish Referendum, and you have also probably heard about recent events in England which might question the United Kingdom’s continued membership of the EU.

In my capacity as a Judge sitting on criminal cases in the Crown Court, I deal mainly with economic crime cases and I also teach judges in England about asset recovery and confiscation. I shall talk about these subjects and how effective co-operation is still lacking.

Let me give you an example: a French prosecutor is convinced that an organised criminal in France has deposited his illicit money in London. The organised criminal has escaped France, or cannot be found, or has not been convicted. First of all, the prosecutor wants the money in London to be detected, and, secondly, to be frozen or restrained. How can he do this? What provisions can he use to do so? And how quickly can it be done? These are the real challenges and therein lies the problem.

I shall identify some of the problems and challenges we are facing and determine how these challenges are being dealt with in Europe.

In the UK, fraud loss - for both public and private fraud - was estimated in 2012 to be about £73 billion. Organised crime is said to be thriving in the UK and Europe. The costs are not purely economic; they are also social. One must not forget the effects on ordinary people of corruption, economic crime, fraud, cyber crime and so on.

Let me give you some more frightening figures. The EU has estimated that the amount of fraud loss to the EU’s financial interests is some 500 million Euros; a UK report from the House of Lords considered it might be closer to 5 billion. It has been estimated that 20 billion to 40 billion is stolen annually from developing countries. Some figures were published in a very recent survey by Price Waterhouse Coopers, the wellknown Accountants, who looked into the threat to business of economic fraud. Fifty-three percent of company CEOs are concerned about bribery and corruption. These are staggering figures.

The situation in the UK is similar to that in Europe. In the UK, the Prosecution authorities have neither sufficient money nor sufficient resources necessary to fully fight this type of crime: organised criminals have the money, but the police and the judiciary do not. In a report on the BBC on the 7 October 2014 the senior police office responsible for tackling fraud crime in England and Wales warned that there are not enough fully trained fraud investigators. The number of recorded fraud cases has risen by two-fifths over the last three years, mostly due to an increase in computer-related fraud. Nonetheless, it is noted that last week in London a banker pleaded guilty in a case related to the Libor scandal and was convicted. This is the first such case, but may well not be the last in this particular saga.

VAT fraud exists as well, of course, in the UK and Europe. A number of agencies have been established to deal with this. It took until this year, 2014 (3.2.14), for a very detailed Anti-Corruption Report to be prepared by the Commission. The European Public Prosecutor’s Office also aims to create a system to prosecute offences affecting EU financial interests (PIF offences). The UK is not in favour of the latter.

I would like to discuss confiscation and the challenges it presents. I deal regularly with fraud cases, and, from my experience, it is clear that organised criminals and fraudsters are not seemingly particularly afraid of going to prison. Prison sentences in the UK are longer than in most other countries in Europe, but they are still not considered by some to be very long. In the UK, if a Defendant is convicted of fraud, he may well be sent to a so-called ‘open prison’; This can be quite a pleasant place by the seaside. In America, fraudsters are given longer sentences. Mr. Madoff received a sentence of 150 years in prison, which, at the age of about 60, would be difficult to complete.

What it seems concerns fraudsters and organised criminals most, is the possibility of losing their properties and their money. This fear may be one thing which will eventually stop them committing crime. Europe is also concerned by a significant terrorist threat which is not far from European shores. Seizing the funds which finance terrorism will be likely to contribute to halting terrorism.

The European Directive on freezing assets is very important. The UK has been somewhat ambivalent towards adopting such European directives, but on mutual recognition it would appear that the UK will adopt this directive by December 1st. Let us take an example: a French judge makes an order in France. He wants a property restrained or confiscated. How quickly will this be recognised in the UK (if the property is in the UK)? And how quickly will it be enforced? Delays in enforcement, effectively in order to protect the property, are very important as property can be easily sold in 24 hours or less. Once the property is sold, the money can be transferred to an off-shore account which is difficult to trace. Once the transfer is complete, the money - the proceeds of crime - has effectively vanished, and may never be traced. We have a great deal of experience in confiscation domestically because London has been a haven for money sought to be hidden or laundered by different people for some time. Thus many discredited high ranking people have sought to purchase expensive properties in London over many years with their ill-gotten gains.

What I have just been talking about is criminal confiscation, but one of the main challenges at the moment relates to civil asset recovery which I want to mention very briefly. After the conviction of a crime, there are very strong and effective powers to seize and confiscate assets, and in the UK we can restrain property both in the UK and abroad once a criminal investigation has been launched. According to UK law, one does not have to wait for a conviction in order to restrain assets: the Prosecution has to prove that there is ‘reasonable cause’ to believe that the person has benefitted from criminal conduct. The wording will soon be likely to change to ‘reasonable suspicion’, a lesser threshold. Therefore, the UK will be able to restrain assets very quickly. Foreign jurisdictions can apply to the authorities in London in order to restrain assets in England and Wales. In one particular case, the Iranian government wanted assets in London restrained and the court did make a restraint order. There were a number of arguments raised regarding human rights, trials, and so forth, but the court stood firm, and declared that it was restraining - not confiscating - but preserving assets. See Fouad Al Zayat and others 2008.

Between 2012 and 2013, judges found that criminals in their cases had benefitted by £1.4 billion, but that the amount of money actually recovered in 2012 was only £84 million. A major reason for this is that the assets of the defendants were often abroad and could not be found and/or in certain cases there was no effective international co-operation. There are countries where it is very difficult to get information and cooperation is fraught with obstacles. Civil asset recovery exists in the UK and in other countries in Europe. I believe that Bulgaria, Ireland, Italy, Romania, Slovakia and Slovenia have forms of civil asset recovery which are non conviction-based.

Civil asset recovery exists because it is not always possible to start criminal proceedings due to the fact, for example, that the criminal may be abroad, hidden, dead, or it may be impossible to identify him. Thus it is not always possible to commence criminal proceedings where, for example, the criminal offender has kept himself distant from the crime he is controlling or is outside the UK. Also, there are occasions where a criminal dies leaving recoverable assets or simply transfers them to a third party. In such situations, where the Crown Prosecution Service has decided it is not in the public interest to prosecute, the use of civil recovery to recover the proceeds of unlawful conduct will be considered. In these situations in the UK, the State can bring a civil asset recovery claim in the High Court. It is a claim in rem against the property. Imagine that a French gangster has a house in London. The house is identified and the court may confirm that this house was bought with the proceeds of crime so that a Recovery Order is made. It is a civil action where the civil standard of proof (ie proof on the balance of probabilities applies) in the (Civil) High Court.

There are various co-operation enforcement agreements and in England and a foreign country can make requests for mutual assistance which go through the UK Crime Co-operation Department. The European Investigation Order Directive will be very important as far as obtaining evidence is concerned, and the UK has chosen to be part of this.

As far as civil asset recovery is concerned, UNODC, STaR and others have produced the Asset Recovery Handbook. It states ‘although an increasing number of jurisdictions are adopting legislation that permits confiscation without a conviction, and this is encouraged in multi-lateral treaties ..., non conviction-based confiscation remains quite challenging for a number of reasons.’ This seems strange because the UN Convention against Corruption provides in Article 54 ‘that all parties take necessary measures to allow confiscation of property without a criminal conviction’. And yet, not all countries in the EU provide for civil asset recovery. Although the 2014 Directive and indeed the 2006 Directive discuss co-operation, the 2006 Directive definition mentions a ‘court competent in criminal matters’, and so there is great debate. Some countries have argued that it covers civil asset recovery but many countries consider that it does not.

Regarding then mutual recognition, civil asset recovery orders may thus not be presently recognised. This is a challenge because I think that in many instances in the future, civil asset recovery will be increasingly common for the reasons which I have mentioned and not least for the fact that there is not enough money to bring criminal trials leading to convictions. Fraud cases can cost millions of Euros to bring to Court, and nowadays few countries can afford this. The Serious Crime Fraud Office in the UK must choose which cases it takes as it cannot take every case which it might wish to investigate, because of the cost. The Consultative Forum of Prosecutors General in The Hague in December 2012 agreed that judicial cooperation is particularly difficult with regard to non-confiscation, and it re-iterated the need for further harmonisation of freezing assets and the establishment of confiscation regimes. Of course, the problem associated with different national jurisdictions and national legal systems remains. For example, in the UK we operate according to a Common Law system; in France, it is a Civil Law and a Codified system. In the end, this is a global problem which needs to be addressed.

The issues are often practical ones. Let me take the example of a case which happens to come from Kingston Crown Court where I sit. I did not deal with that case. The Dutch authorities were seeking the assistance of the UK in executing a search warrant in relation to a fraud/tax case. It took a very long time for the issue as to the production of seized material to be resolved, because the defendant repeatedly appealed, but by the time the appeal had finished and the court agreed to make the Order sought, the case in Holland had been tried. The judges concluded that it is therefore important that any request by a foreign state is dealt with expeditiously. This is especially true when the requesting state is a member of the EUSee Cornelius Van Der Pijl V (1) Secretary of State for the Home Department (2) Kingston Crown Court[2014] EWHC 281 (Admin). An additional challenge therefore is time and the necessity to deal with matters quickly.

Let me end by means of an anecdote. In the UK, we operate a jury system for serious criminal cases. If the jury has not reached a verdict on the day of the case, the members are allowed to go home at night and come back the next morning. In previous times however, if a verdict had not been reached, there are instances reported where jury was locked in a room, and the members could only come out when they had reached an agreement. In 1670 it is reported that in the trial of William Penn the Judge said to the Jury, apparently seeking to influence the verdict :

“ Gentlemen, you shall not be dismissed until you bring in a verdict with the court will accept. You shall be locked up, without meat, drink, fire and tobacco. You shall not think thus to abuse the court. We will have a verdict by the help of God or you shall starve for it.”

In 1895 in New South Wales, it is reported that in the case of R V Dean a Judge told a jury on a Saturday that they would be locked up until Monday if they had not reached a verdict.-they apparently returned with a verdict 7 minutes later.

It makes me think that in the situation today, with so much debate between countries and lack or perceived lack of clarity in the directives and rules, but where we still share the same end goal, namely that we all want to see an effective result which is fair, with proper orders and judgments enforced quickly with proper reciprocal recognition and enforcement of orders in the EU, recognising of course that there must also be proper safeguards for those affected by orders- that perhaps the answer is to put all the EU Ministers in one room, lock them in, and tell them that they cannot come out until they have reached an agreement! On second thoughts, this is probably not a very practical or fair solution, but it might merit some consideration.

Merci pour votre attention.