Key Facts

• Schedule 6 amends confiscation powers under the Proceeds of Crime Act 2002 to include cryptoassets.
• The schedule includes key definitions such as “cryptoasset” and “cryptoasset exchange provider”, consistent with other legislation dealing with similar threats.
• The Government acknowledges that criminals are increasingly using cryptoassets for money laundering and terrorist activities.
• Only 16% of applications for registration have been approved by the FCA.
• As of last week, 245 firms were listed as unauthorised cryptoasset businesses operating in the UK.
• The Proceeds of Crime Act 2002 is being amended to extend confiscation powers to intangible assets like digital currencies.
• The amendments aim to provide clarity and consistency in the drafting of Schedule 7.
• No substantial changes are made by these amendments.
• Clause 142 and schedule 7 of the Bill extend civil recovery powers for digital assets to multiple organisations including the National Crime Agency, HM Revenue and Customs, and the Serious Fraud Office.
• The new powers enable law enforcement agencies to search for physical items linked to cryptoassets based on reasonable suspicion of unlawful conduct.
• Government new clause 23 introduces counter-terrorism provisions in the Anti-terrorism, Crime and Security Act 2001 and the Terrorism Act 2000.
• The NCA and GCHQ have been working on identifying the movement of cryptoassets around the UK and wider jurisdictions.
• Market volatility is a concern during asset seizures, especially when assets are converted to crypto before being moved abroad.
• New powers are modelled after existing ones used by law enforcement agencies to disrupt criminal networks.
• Amendment 51 makes a minor technical correction to section 303Z42.
• Amendments 52, 54, 62 address the continuation of crypto wallet freezing orders during forfeiture proceedings.
• Amendment 156 introduces new sections and subsections to Parts 1 to 4 of the Proceeds of Crime Act 2002 for the civil recovery of cryptoassets.
• Amendments 158 and 159 add definitions and references related to cryptoasset investigations within various parts of the Proceeds of Crime Act 2002.
• Clauses 143 and 144 aim to exempt businesses from submitting DAMLs for transactions under £1,000.
• The volume of DAMLs submitted by businesses to the UKFIU rose by 80% to 62,341 in the last year with available data.
• Businesses must wait seven working days before proceeding if they submit a DAML.
• Clause 145 amends the Proceeds of Crime Act 2002.
• FATF evaluated the UK in 2018, rating it only 'partially compliant'.
• Clause 146 mirrors counter-terrorism legislation for better international collaboration.
• Clause 147 enables the Treasury to update high-risk country lists directly, bypassing Parliament's scrutiny.
• Parliamentary oversight was built into the Sanctions and Anti-Money Laundering Act 2018.
• Paisley refers to the importance of 'guard rails' to prevent unilateral decisions by the Treasury.
• Amendments 122 to 135 provide protection from civil liability for information sharing.
• Clause 149 enables indirect information sharing via a third-party intermediary.
• Government amendments expand the scope of indirect information-sharing provisions to cover large and very large legal and accounting businesses.
• Clause 148 concerns direct disclosure of information between businesses under certain conditions.
• Clause 149 deals with indirect disclosures by accountants, auditors, and insolvency practitioners.
• Amendments 136, 152, 137, 138, 140 to 142, 144, and 147 extend clause 149 disclosures.
• Helena Wood of RUSI notes the Bill is a missed opportunity for advanced data analytics models.
• The UK has different constraints on sharing information compared to other jurisdictions such as GDPR.
• Individuals will still be able to access basic bank accounts unless used for criminal activity.
• Banks must have taken action against a customer before sharing information about them.
• Amendments 136, 139, 140, 142, 145, 148, 149, 150, 151 provide protections against civil liability for indirect disclosures.
• Amendment 152 defines 'relevant financial year' based on the Proceeds of Crime Act and Finance Act provisions.
• Amendment 155 adds a definition of 'financial year' as a period of 12 months ending with March 31.
• Clause 154 removes the statutory limit on SRA financial penalties for disciplinary matters related to economic crime.
• New clause 47 gives SSDT parity with England and Wales in fining powers for economic crime-related misconduct.
• The current maximum fine by the SSDT is £10,000 compared to an unlimited amount for England and Wales.
• Clause 158 provides the Secretary of State with the power to make consequential amendments that arise from the Bill.
• Regulations made under the clause will be subject to either negative or affirmative resolution procedure depending on whether they amend primary legislation.
• The MP raises concerns about the scope and reporting of this Henry VIII power.
• Clause 159 provides that regulations under the Bill are to be made by statutory instrument.
• New clause 22 allows regulations to apply company or limited partnership law to Scottish qualifying partnerships.
• Amendment 43 ensures regulations under new clause 22 are subject to the affirmative procedure unless they correspond to negative procedure provisions.
• The amendment aims to close loopholes at the end of the Bill.
• Enforcement is needed for Scottish partnerships as there are currently no fines for non-compliance.
• The MP expects stricter penalties including fines and possible imprisonment.