The U.K. Criminal Finances Act of 2017 received royal assent in April 2017 effective in September 2017. It is described as a "Bill to amend the Proceeds of Crime Act 2002; make provision in connection with terrorist property; create corporate offenses for cases where a person associated with a body corporate or partnership facilitates the commission by another person of a tax evasion offence; and for connected purposes. " (Summary of the Criminal Finances Act 2017).
Of particular interest is Section 13 (the text of which follows below). It amends Proceeds of Crime Act to cover gross human rights abuses which "(a)occurs in a country or territory outside the United Kingdom, (b)constitutes, or is connected with, the commission of a gross human rights abuse or violation (see section 241A), and (c) if it occurred in a part of the United Kingdom, would be an offence triable under the criminal law of that part on indictment only or either on indictment or summarily. A gross human rights abuse occurs when three conditions are met:
Of particular interest is Section 13 (the text of which follows below). It amends Proceeds of Crime Act to cover gross human rights abuses which "(a)occurs in a country or territory outside the United Kingdom, (b)constitutes, or is connected with, the commission of a gross human rights abuse or violation (see section 241A), and (c) if it occurred in a part of the United Kingdom, would be an offence triable under the criminal law of that part on indictment only or either on indictment or summarily. A gross human rights abuse occurs when three conditions are met:
(2)The first condition is that—
(a)the conduct constitutes the torture of a person who has sought—(i)to expose illegal activity carried out by a public official or a person acting in an official capacity, or (ii)to obtain, exercise, defend or promote human rights and fundamental freedoms, or
(b)the conduct otherwise involves the cruel, inhuman or degrading treatment or punishment of such a person.
(3)The second condition is that the conduct is carried out in consequence of that person having sought to do anything falling within subsection (2)(a)(i) or (ii).
(4)The third condition is that the conduct is carried out—
(a)by a public official, or a person acting in an official capacity, in the performance or purported performance of his or her official duties, or
(b)by a person not falling within paragraph (a) at the instigation or with the consent or acquiescence—(i)of a public official, or (ii)of a person acting in an official capacity,--who in instigating the conduct, or in consenting to or acquiescing in it, is acting in the performance or purported performance of his or her official duties.
The consequences for criminal enforcement, as well as for corporate compliance programs may be significant. As well, the intersection with the human rights responsibilities of enterprises under the UN Guiding Principles for Business and Human Rights may also be impacted.
For this those interested, a number of useful commentaries already have been posted. They provide a good base for understanding the Act and its implications. Richard J. Rogers, a founding partner at Global Diligence LLP, and Sasho Todorov is a rising third year Vanderbilt law student, have produced a multi post commentary. Brief descriptions and the links to their commentary follows. Additional commentary have been posted by Karolos Seeger, Alex Parker, Andrew Lee, Ceri Chave, and Ed Pearson, "UK Criminal Finances Act 2017," Program on Corporate Compliance and Enforcement at New York Jniversity School of Law (May 23, 2017).
13 Unlawful conduct: gross human rights abuses or violations
(1)Part 5 of the Proceeds of Crime Act 2002 (civil recovery of the proceeds etc of unlawful conduct) is amended as follows.
(2)In section 241 (meaning of “unlawful conduct”), after subsection (2) insert—
“(2A)Conduct which—
(a)occurs in a country or territory outside the United Kingdom,
(b)constitutes, or is connected with, the commission of a gross human rights abuse or violation (see section 241A), and
(c)if it occurred in a part of the United Kingdom, would be an offence triable under the criminal law of that part on indictment only or either on indictment or summarily,
is also unlawful conduct.”
(3)After that section insert—
“241AGross human rights abuse or violation”
(1)Conduct constitutes the commission of a gross human rights abuse or violation if each of the following three conditions is met.
(2)The first condition is that—
(a)the conduct constitutes the torture of a person who has sought—
(i)to expose illegal activity carried out by a public official or a person acting in an official capacity, or
(ii)to obtain, exercise, defend or promote human rights and fundamental freedoms, or
(b)the conduct otherwise involves the cruel, inhuman or degrading treatment or punishment of such a person.
(3)The second condition is that the conduct is carried out in consequence of that person having sought to do anything falling within subsection (2)(a)(i) or (ii).
(4)The third condition is that the conduct is carried out—
(a)by a public official, or a person acting in an official capacity, in the performance or purported performance of his or her official duties, or
(b)by a person not falling within paragraph (a) at the instigation or with the consent or acquiescence—
(i)of a public official, or
(ii)of a person acting in an official capacity,
who in instigating the conduct, or in consenting to or acquiescing in it, is acting in the performance or purported performance of his or her official duties.
(5)Conduct is connected with the commission of a gross human rights abuse or violation if it is conduct by a person that involves—
(a)acting as an agent for another in connection with activities relating to conduct constituting the commission of a gross human rights abuse or violation,
(b)directing, or sponsoring, such activities,
(c)profiting from such activities, or
(d)materially assisting such activities.
(6)Conduct that involves the intentional infliction of severe pain or suffering on another person is conduct that constitutes torture for the purposes of subsection (2)(a).
(7)It is immaterial whether the pain or suffering is physical or mental and whether it is caused by an act or omission.
(8)The cases in which a person materially assists activities for the purposes of subsection (5)(d) include those where the person—
(a)provides goods or services in support of the carrying out of the activities, or
(b)otherwise provides any financial or technological support in connection with their carrying out.”
(4)The amendments made by this section—
(a)apply in relation to conduct, so far as that conduct constitutes or is connected with the torture of a person (see section 241A(2)(a) of the Proceeds of Crime Act 2002 as inserted by subsection (3) above), whether the conduct occurs before or after the coming into force of this section;
(b)apply in relation to property obtained through such conduct whether the property is obtained before or after the coming into force of this section;
(c)apply in relation to conduct, so far as that conduct involves or is connected with the cruel, inhuman or degrading treatment or punishment of a person (see section 241A(2)(b) of that Act as inserted by subsection (3) above), only if the conduct occurs after the coming into force of this section.
This is subject to subsection (5).
(5)Proceedings under Chapter 2 of Part 5 of the Proceeds of Crime Act 2002 may not be brought in respect of property obtained through unlawful conduct of the kind mentioned in section 241(2A) of the Proceeds of Crime Act 2002 (as inserted by subsection (2) above) after the end of the period of 20 years from the date on which the conduct constituting the commission of the gross human rights abuse or violation concerned occurs.
(6)Proceedings under that Chapter are brought in England and Wales or Northern Ireland when—
(a)a claim form is issued,
(b)an application is made for a property freezing order under section 245A of that Act, or
(c)an application is made for an interim receiving order under section 246 of that Act,
whichever is the earliest.
(7)Proceedings under that Chapter are brought in Scotland when—
(a)the proceedings are served,
(b)an application is made for a prohibitory property order under section 255A of that Act, or
(c)an application is made for an interim administration order under section 256 of that Act,
whichever is the earliest.
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Rogers and Todorov: New UK law creates liability for gross human rights abuses
Journal Entry by Richard J. Rogers and Sasho Todorov on July 26, 2017
In April 2017, the United Kingdom enacted the Criminal Finances Act which has created substantial new scopes of liability for companies engaging in business abroad. Section 13 of the CFA expands the scope of the Proceeds of Crime Act to cover the international commission of gross human rights abus ...
Rogers and Todorov: How does the new UK law define gross human rights abuses?
Journal Entry by Richard J. Rogers and Sasho Todorov on August 1, 2017
In the prior post , we introduced readers to the UK's Criminal Finances Act, a new law that expands remedies for UK prosecutors to use against gross human rights abuses. But what are gross human rights abuses? There are three conditions for acts to be considered gross human rights abuses or GHRA un ...
New UK law: Liability for ‘profiting from’ gross human rights abuses
Journal Entry by Richard J. Rogers and Sasho Todorov on September 4, 2017
The UK's Criminal Finances Act, a new law that expands remedies for UK prosecutors to use against gross human rights abuses, also targets activity “connected to” gross human rights abuses. Activity "connected to" gross human rights abuses includes: directing or sponsoring, profiting fr ...
Compliance Alert: Due diligence under the UK’s Criminal Finances Act 2017
Journal Entry by Richard J. Rogers and Sasho Todorov on September 7, 2017
The most important thing for a company to remember when dealing with the Gross Human Rights Abuse provisions of the Criminal Finances Act is that they appear to be designed as a strict liability regime with no statutory defenses available. In addition, both the National Crime Agency and Crown Pro ...
Practice Note: Dealing with allegations of Gross Human Rights Abuse
Journal Entry by Richard J. Rogers and Sasho Todorov on September 12, 2017
As noted in the prior post , there are no formal legal defenses available when a company violates the Gross Human Rights Abuse provisions of the Criminal Finances Act. How, then, should companies deal with allegations that they've committed violations? Should a violation occur, the company might b ...
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