ASSESSING THE PROCEEDS OF DRUG TRAFFICKING (Hansard, 18 February 1986)

§ Mr. Mellor
I beg to move amendment No. 2, in page 3, line 38, leave out 'at the time of' and insert 'at any time since'.

§ Mr. Deputy Speaker (Sir Paul Dean)
With this, it will be convenient to discuss Government amendments Nos. 3, 4 and 5.

§ Mr. Mellor
I remind the House that the Bill originally provided for the assumption that the trafficker's property was derived from drug trafficking applied to all the assets that he held at the time of his conviction and all those that had been in his hands at any time during the previous five years. In Committee, we had a discussion, led by the hon. Member for Birmingham, Erdington (Mr. Corbett), assisted by my hon. Friends the Members for Richmond and Barnes (Mr. Hanley) and for Southampton, Test (Mr. Hill), as to whether the period of five years was correct. Of course, I acknowledge that the period chosen was a 208 pretty arbitrary decision. Sometimes one can justify the particular period more than other times, but no one can ever say that he has the last word on the subject.
The Government have reconsidered the matter in the light of the discussion in Committee. The hon. Member for Erdington said that the period should be extended to 10 years, although he made it clear that he was not wedded to that figure. He simply believed that the longer period might be appropriate. We arrived at the period of five years by answering this question: if a trafficker is asked to prove that his assets were not acquired as a result of drug trafficking, how long can we reasonably expect him to go back and for how long would he have kept the necessary records? For how long would he keep in touch with people who might be able to confirm what he said? We hit on five years as being a fair period.
4.45 pm
However, it emerged during the discussion and from further research that a recent Finance Act provided that VAT records, for example, should be kept for six years. The Inland Revenue expects people to produce information about their income and expenditure in a variety of circumstances, and although it has different time limits for different purposes, six years is fairly common. That is also the period for which employers are expected to keep records of employees' remuneration, and the period during which individuals may claim tax relief.
In the hope that the amendment moves in the direction in which several hon. Members wish us to go, we invite the House to extend the period from five years to six years. I do not know whether anyone will press me to go further than that this afternoon. A longer period would increase the burden on the defence to an unacceptable extent, because many defendants who had had a legitimate income would not have the records many years later to prove that that was so, and we should not penalise them for that. If the prosecution can prove differently, it should not be inhibited by the six-year limit. Six years seems to be a reasonable period for the assumption to apply, although, where it can be shown that assets acquired earlier than that were the proceeds of drug trafficking, there will be no inhibition on the prosecution's seizing them.
In Committee, my hon. Friend the Member for Richmond and Barnes asked why the relevant period for the application of the assumption was calculated back from the time of conviction. He suggested that the reference point should be the time of charging. Many hon. Members, including the hon. and learned Member for Montgomery and the hon. Member for Erdington, shared his view. We wish to meet that point, but, in the interests of consistency with other parts of the Bill, especially clause 4, we suggest that the reference point should be the institution of proceedings. That will often pre-date charging, so I hope that the amendment will be accepted by the House.
In reviewing the period during which the assumptions should apply, we also thought it right to cover any gap that might arise between conviction and the imposition of the confiscation order should the court need to adjourn for any reason. That is why we tabled amendment No.2.
As we propose to extend the operative period for the assumptions in clause 2, we thought that, in the interests of consistency, we should do the same in respect of transfers of property for less than full value, which also have a five-year limitation. That provision is included in 209 clause 4. Although it is not strictly necessary for the periods in clauses 2 and 4 to be the same, it is sensible that they should be. That is why I ask the House to accept the amendment to clause 4, which would provide a six-year period. I hope that my explanations have helped the House.

§ Mr. Corbett
Before the week is over, I shall have inflicted much damage upon the Minister's political career by thanking him for the way in which he has responded to points made in Committee. As he said, there is far more logic in a six-year limitation, especially in terms of VAT and some Inland Revenue practices. I also welcome the fact that the period will date from the time when the proceedings were instituted, which again is more logical.

§ Mr. Raffan
I accept what my hon. Friend the Minister said about a period of six years. Ideally I would prefer even longer but one must be realistic. One cannot go beyond six years or a great deal of court time will be consumed. My hon. Friend is right; we do not want to do that.
My hon. Friend the Member for Richmond and Barnes (Mr. Hanley) is not here but he made a valuable point in Committee to which my hon. Friend the Minister has responded by making the period apply from the institution of proceedings rather than from the date of conviction. My hon. Friend was adamant that the latter should not be the case. He was concerned that the period should not finish before conviction, otherwise assets acquired after arrest, but before conviction, would fall out of the frame. That would be unfortunate as someone could be on remand for some time. Such a person could still be receiving tainted money after proceedings had been instituted. I accept my hon. Friend's point that it would be in the defendant's interests to prolong the process of law so that he could get out of liability for as many tainted assets as possible, but I am still worried about the time between the institution of proceedings and conviction. What happens to tainted assets that are transferred during that time? My hon. Friend the Member for Richmond and Barnes put it rather well—it falls out of the frame.

§ Mr. Mellor
I refer my hon. Friend the Member for Delyn (Mr. Raffan) to amendment No. 3 which meets the relevant arrangements by providing: at any time since the beginning of the period of six years ending when the proceedings were instituted against him". That relates to the timing of the assumption. We think that it would be extremely unlikely if there were any difficulty in the period leading up to trial. Such matters would be in recent memory and the prosecution authorities would have full tabs on what the person was up to because he would have been identified and charged. A great deal would be known about him. That is the time when one would expect the prosecution to know the answers and to not have to rely on the defendant, perhaps going back to before the date when the defendant came to notice. At that earlier stage, it is quite reasonable to say that the defendant knows far more about how he got his house than the prosecution. In serious cases, assets would have been frozen in any event. I appreciate my hon. Friend's sincerity. If, having considered the matter, I find that I have been overconfident, we shall not hesitate to examine it again in another place. I shall write to my hon. Friend if we have a chance to re-examine it.