An amendment to the Criminal Finances Bill (the Bill) WILL amend the Proceeds of Crime Act 2002 (POCA) to allow the High Court to make orders designating the conduct of a person – wherever it occurs – as connected to a gross human rights abuse, and to set prohibitions on that person’s ability to deal with property, funds and finances and access related services.

Following an order designating conduct as connected to a gross human rights abuse it will be incumbent on the relevant authorities to seek a civil recovery order of any proceeds of such conduct.

The amendment also reflects a broader agenda which aims to ensure that financial institutions and other professional service providers do not facilitate the retention of funds derived from human rights abuses.

Mindful of the reputational and legal risks associated with dealing in such assets, as well as the expectations of the UN Guiding Principles on Business & Human Rights (UN Guiding Principles), a growing number of financial institutions are reviewing their money-laundering policies and procedures as part of their human rights impact mitigation strategies.

Today’s definition of “Unlawful conduct.”

In the UK PROCEEDS OF CRIME ACT 2002 (POCA) “Unlawful conduct” is CURRENTLY DEFINED as

• CRIMINAL CONDUCT IN THE UK or
• CRIMINAL CONDUCT OUTSIDE THE UK WHICH WOULD ALSO BE REGARDED AS CRIMINAL CONDUCT IF IT OCCURRED IN THIS JURISDICTION.
• (AKA = dual criminality test)

This dual criminality test would not, however, capture and criminalise “Gross human rights abuse or violation” in all instances.

In practical terms, much of the conduct that is described by the amendment already meets the current definition of “unlawful conduct” in POCA.  HOWEVER, “Gross human rights abuse or violation” MAY NOT BE ILLEGAL IN many countries around the world!!!!!!

The proposed definition of “Unlawful conduct.”

The Criminal Finances Bill has however been amended by the House of Commons to allow the government to freeze the UK assets of international human rights violators.

The amendment proposes to extend the definition of “UNLAWFUL CONDUCT” IN THE PROCEEDS OF CRIME ACT 2002 (POCA) so that PROPERTY OBTAINED THROUGH THE COMMISSION of “GROSS HUMAN RIGHTS ABUSES” can be subject to civil recovery orders.

 “Gross human rights abuse or violation” is defined to include the torture of any person

• who sought to expose illegal activity by public officials or
• who sought to obtain, exercise, defend or promote human rights and fundamental freedoms, or
• other conduct involving the cruel, inhuman or degrading treatment of a person.

The conduct must

• have been carried out by or at the instigation or acquiescence of a public official or person acting in a public capacity.

The amendment also captures conduct by any person

• who DIRECTS, SPONSORS, PROFITS from or materially assists the commission of a gross human rights abuse or violation.

Action required – review money-laundering policies and procedures

The amendment also reflects a broader agenda which aims to ensure that financial institutions and other professional service providers do not facilitate the retention of funds derived from human rights abuses.

Mindful of the

• reputational and legal risks associated with dealing with such assets,
• the expectations of the UN Guiding Principles on Business & Human Rights (UN Guiding Principles), http://bit.ly/18WbEUy

and a growing number of financial institutions are reviewing their money-laundering policies and procedures as part of their human rights impact mitigation strategies.