NCA’s Annual Report 2019-20: a focus on recovering the proceeds of crime and asset denial
LAOs, having been introduced into law by the Criminal Finances Act 2017, are a relatively new law enforcement tool targeting suspected illicit finances. The NCA and HMRC have been known to make use of them in the past, but this is the first time that the SFO have ventured into LAO territory, successfully securing the forfeiture of tangible assets that are believed to have been bought with the proceeds of crime.
The jewellery, including a personalised ring, was held in the safe deposit box of Nisar Afzal’s former partner, who consented to the forfeiture. Afzal is alleged to have been involved in a £50 million mortgage fraud scheme with his brother over a decade ago and the LAO follows an account freezing and forfeiture order made in 2019 which saw the SFO seize £1.52m from the sale of two of his properties and a further £167,000 in forfeited cash.
Investigation into the matter continues and a warrant for the arrest of Afzal, who fled to Pakistan in the mid-2000s, remains outstanding.
LAOs, incorporated into the Proceeds of Crime Act 2002 (POCA) by s.15 of the Criminal Finances Act 2017, allow a range of law enforcement agencies to seize, detain and/or forfeit ‘listed assets’, provided they believe that the assets represent proceeds of crime or are intended to be used for criminal purposes. There need not be a parallel criminal investigation.
The order is part of the same family of law enforcement powers as Account Freezing and Forfeiture Orders and cash seizure and forfeiture powers, but whereas those mechanisms target illicit cash, LAOs focus on the derivatives of such ill-gotten gains. Listed assets in this context include precious metals, precious stones, watches, works of art, face value vouchers and postage stamps with a minimum value of £1,000. For more on Account Freezing and Forfeiture measures see here.
Those facing a listed asset order have the right to challenge the making of the order, or to challenge any subsequent attempt by the authorities to forfeit the asset(s). Even if a court permits forfeiture, there are statutory avenues of appeal. Anyone in receipt of such an order, or whose assets are affected by one, should seek legal advice.
Ed Smyth is a Partner in the Criminal Litigation team and represents individuals and corporates involved across the full spectrum of criminal and quasi-criminal matters. He has considerable experience of confiscation and asset forfeiture proceedings and of challenging the exercise of search and seizure powers. He has acted in cases involving the SFO, the NCA, HMRC, the Information Commissioner, the Electoral Commission and various professional disciplinary bodies.
Rosie Gibson is a trainee solicitor currently in the Criminal Litigation team. She joined Kingsley Napley in 2016 as a paralegal in the Regulatory department. She subsequently worked in the Criminal Litigation department before starting as a trainee in September 2019.
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