Official Report: Minutes of Evidence

The Chairperson (Mr Frew): I welcome Ms Karen Pearson, the deputy director of the Department of Justice's (DOJ) protection and organised crime division; Ms Julie Wilson, the head of the organised crime branch; and Ms Siobhan McKelvey from the protection and organised crime division. The session will be reported by Hansard and the transcript published on the Committee's web page. You are no strangers to the Committee and the work that we do. Karen, I will hand over to you without further ado.

Ms Karen Pearson (Department of Justice): Chairperson, would it be helpful if we were very brief?

The Chairperson (Mr Frew): That would be lovely. [Laughter.]

Ms Pearson: I do not want to skim over this because it is important, particularly in the context of the briefing that you just had from Anthony. The three of us work for Anthony on organised crime task force (OCTF) issues as well, so it was really interesting to hear that debate. We have a presentation on a legislative consent motion (LCM), which I will cut to three points, if I may.

First, we think that the LCM works with the issues that Anthony told you about: economic crime, civil recovery and those aspects. Secondly, we know that you are very concerned about consultation. I can confirm that we have consulted, and we will explain that in our answers to your questions. Rather than go through the detail of what the powers do, I will list them — there are seven areas — and then we will pick up on any that you want to drill into.

The seven areas are seizure and forfeiture powers; making it a criminal offence to obstruct or assault law enforcement officers; disclosure orders; unexplained wealth orders, which are particularly interesting; enabling the use of the Proceeds of Crime Act 2002 (POCA) investigation powers for confiscation order revisits; amending the levels of authorisation needed for the use of POCA search and seizure powers; and to expand the circumstances in which mixed property is recoverable. The Minister thinks that these would make a contribution to our existing arrangements, which are quite considerable.

These elements will be taken forward, and they are having a pretty good hearing at Westminster at the moment under the Criminal Finances Bill and are not too controversial so far. We could, of course, legislate here, but we are proposing an LCM process. My final point is that we have always tried to keep parity with England and Wales under the Proceeds of Crime Act 2002 for operational reasons in case there is an operation that goes across jurisdictional boundaries.

I will leave it there, Chair. I do not wish to be disrespectful and skim over anything, but I hope that that is helpful.

The Chairperson (Mr Frew): That is very helpful, Karen. I really appreciate that and wish that some of your colleagues would take that approach at times.

Mr Sheehan: Could you pass that message on? [Laughter.]

The Chairperson (Mr Frew): Yes, could you, please? We will try to delve into things in our questions. If we miss something, there is always an option to raise it at the end of the session. I appreciate your operational stance on this occasion, Karen; thank you.

I want to ask about the time frame. By what date does the Department have to lay the legislative consent memorandum and then table the LCM?

Ms Pearson: We are seeking approval to go to the Executive. There are a couple of steps to go through, but —

Ms Siobhan McKelvey (Department of Justice): It will be around February. It depends on the stage at Westminster, but it will be roughly February or March. We must have it in place by then.

The Chairperson (Mr Frew): Will you be going to the Executive in February?

Ms McKelvey: No. We must have the LCM in place by then. We are on quite a tight timetable.

Ms Pearson: We would like your permission today to go to the Executive as our next step.

The Chairperson (Mr Frew): OK. You highlighted the unexplained wealth orders as being of interest. The PSNI's view is that a minimum threshold of £100,000 should be reduced. Will you outline the reasons for the PSNI's view and whether you have made any progress on this in your discussions with the Home Office? Is it something as simple as house prices or values being different in Northern Ireland compared with other places?

Ms Pearson: It is a similar conversation to the one that you had with Jenny on thresholds. The £100,000 figure would be quite a high threshold for us, but it might be quite a low to medium one for the Home Office to be contemplating.

Ms McKelvey: We have had discussions and recently discovered that Scotland is also asking for the threshold to be lowered. In the south of England, they are coming under pressure to go the other way and put the threshold up. We will probably end up with a compromise. I do not know; we are discussing it with them.

Ms Julie Wilson (Department of Justice): Concerns were raised with the Home Office about proportionality, particularly because, in several recovery cases, there is a balance of probabilities test whereas this is about people having to explain why they have unexplained wealth; it is based on suspicion of criminal activity. There are concerns about the level of wealth that it is proportionate to question. The Home Office has had to grapple with those issues.

The Chairperson (Mr Frew): I am not au fait with all the details, but is it the case that, if you go to confiscate, for want of a better word — asset strip, maybe — you are restricted to a certain amount at any given time? Is there a case whereby you can justify taking a whole house as part of crime proceedings, or would you have to go smaller with two cars or a lower price range?

Ms McKelvey: In civil recovery, you have to show a link to unlawful behaviour, so you cannot seize anything that you cannot show a link for. With unexplained wealth orders, it is about any wealth that people cannot show where they got it from. That can then be used as a basis for recovery. If people can show a totally open and above board basis for owning something, it will not be recoverable.

The Chairperson (Mr Frew): With the provision to expand the circumstances in which mixed property is recoverable, you said that it is likely that the LCM would be required to extend the provisions to Northern Ireland. When will the Department be in a position to confirm whether an LCM is necessary?

Ms McKelvey: To be honest, where there is any doubt, we are playing it safe with the LCM. We are asking for the Assembly's permission so, as far as I am concerned, that will be in.

The Chairperson (Mr Frew): OK.

Mr Sheehan: Thanks for the brief presentation. Siobhan, you said that nothing so far has been controversial as the Bill has been passing through Westminster, but the Joint Committee on Human Rights flagged up human rights issues. Are you aware of that?

Ms McKelvey: Is that in asset recovery? There are big areas on anti-money laundering, terrorist financing and so on that we are not commenting on because those are reserved matters. Do you know if it relates to those?

Mr Sheehan: I am not sure, to be honest, but it would be useful to get the report from the Joint Committee so that we are all familiar with it.

Ms McKelvey: OK, I will check on that.

Mr Sheehan: There is another issue about disclosure orders. The authority to issue a disclosure order is changing from prosecutor to law enforcement officers. Why is that happening?

Ms Wilson: Disclosure orders are already available in money laundering investigations. It is about extending that into other areas.

Mr Sheehan: I have no difficulty in principle with a disclosure order. The issue is that the authority to issue such an order is going from a prosecutor to a police officer, the NCA or whoever. Is there any rationale for that change?

Ms McKelvey: It is quite operational. That was developed in the Home Office. I can check and get its rationale.

Mr Sheehan: My party and I would have issues with that. When that type of power is handed to police officers, it can be abused, whereas it is less likely to be abused if it is in an outside agency that is not involved in the operation. With the LCM and the Bill, we would need to be reassured that there is some judicial oversight for all this. Is there any way that we can get reassurance?

Ms Wilson: Over the disclosure orders or over all of it?

Mr Sheehan: Reassurance in general. The disclosure orders, obviously, is one issue.

Ms Pearson: We would need to write to you on that, if that is OK.

Mr Beggs: Given the average salary in Northern Ireland, very few of our constituents will have four or five times their annual salary suddenly appearing in a bank account, so £100,000 does seem to be very large. Given the relatively lower earning levels in Northern Ireland, £100,00 is a very large amount as a threshold. I would have thought that there is merit in bringing that down. Do you agree? Allowing devolved responsibility to bring the threshold down or putting in enabling responsibility so that, if there is a need and agreement on the local situation, it could be done.

Mr Attwood: This is the third time that that point has been emphasised. You will have heard earlier that the NCA and the PSNI say that they work at lower thresholds here than the NCA works in Britain because the organisational character or scale of crime is different. We are looking to target smaller operators here. If we are to give consent, it has to be crafted to reflect our circumstances, otherwise we are giving consent to something that does not reflect those circumstances. I would have thought that there is a legislative way to do that. Given that we do not know what the final Bill will look like, you are looking for consent quite early.

Ms Wilson: At this stage, we are just seeking the Committee's agreement to our proceeding to the next step, which is to seek Executive consent to bring forward a full legislative consent memorandum. We anticipate coming back to the Committee on the detail. This is the first step in the process, and we are asking for permission to proceed.

Mr Beggs: You are looking for permission in principle?

Ms Wilson: In principle, yes.

Mr Attwood: That is without prejudice to the shape of the final Bill.

Ms Wilson: Absolutely. We anticipate bringing forward a full legislative consent memorandum that will reflect —

Ms McKelvey: — the Bill as it has developed.

Mr Attwood: LCMs can often end up under time pressures. Working back from the anticipated time frame for the Bill in London, what is the indicative last date by which the Assembly will have to give consent in order to be captured by the Bill when it goes through Westminster?

Ms McKelvey: I do not have an exact date. The final amending stage at Westminster must be in place, we are being told, by roughly February or March. The aim is to get it through the Executive before Christmas and into the Assembly as soon as possible after recess. We need to get confirmed dates from Westminster to have an exact date.

Ms Pearson: The Bill was introduced on 13 October. What stage has it just finished?

Ms McKelvey: The second Committee Stage.

Ms Pearson: It is proceeding quite quickly.

Mr Attwood: Has it finished Committee Stage or Second Stage?

Ms McKelvey: I think that they have just cleared Second Stage at the Committee.

Mr Attwood: Third Stage will be Committee Stage. Second Stage will be the general —

Ms McKelvey: Sorry. Maybe it was the second meeting of the Committee. We just got notification this morning.

Mr Attwood: I would like to see the timescale because we could be signing off under your timescale for an LCM in early or mid January. Will that be after Consideration Stage in Westminster or Further Consideration Stage? I would like to see the time frame because I do not know what we might be agreeing to, given that they have to go back and forth between the Commons and the Lords.

Ms McKelvey: They can legislate only for what you have agreed to. If they make any marked changes post LCM, they cannot extend that to us because they would not have your consent to do so.

Ms Wilson: If any subsequent changes are agreed, the legislative consent memorandum will reflect those further amendments.

Ms Pearson: Timing and sequencing are a problem that we face with LCMs. It is always going to be tricky.

Mr Attwood: It always comes up. I certainly will need the next week to look at this further. I agree in principle with the Bill, but I need to assess some of the detail before I will say, "Go ahead in principle". I do not have any fundamental objection, but I want to drill down a bit more on some of the details.

Ms Pearson: Does that concern apply to us going to the Executive as well, Mr Attwood? That is the next stage. We will have to come back with details.

Mr Attwood: Yes, at this stage. I am not trying to hold it up — far from it. I can see great value in a lot of this, but I need a week to look at some of the detail.

The Chairperson (Mr Frew): Are there any further comments at this stage? My party and I will have no problems in principle with the LCM as it is in front of us. I take your point entirely about the changes that could be made at various stages in the Westminster process.

On a positive note, it is good that you have come to the Committee so early, which helps us to iron out anything that we need to. Pat raised issues that he would like to be resolved, and Alex has asked for a timeline. We will have to leave it for this week. To leave on a positive note, it is good that you are coming before us now. We can, hopefully, get everything resolved and confirmed, with fears assuaged, and go on from that.

I do not feel the need to put a Question to the Committee at this point while answers are still being sought. I suspect that the Committee will not want to hold up something of this nature in a legislative consent motion. We will make sure that we look at it in a timely fashion and, hopefully, get you a result one way or another very soon.

Ms Pearson: That is really helpful, Chair. If it is OK with the Clerk, we will try to get something to you to answer all those points for your next meeting. The week after that, Anthony and I are back before the Committee to discuss Fresh Start, and, if it is helpful, we can discuss anything that is still unresolved then.

The Chairperson (Mr Frew): OK. That is very helpful.

Mr Attwood: Our briefing shows that the Home Office has said to the DOJ that it does not think that there will any movement on the unexplained wealth orders. That is in the note that we have.

Ms Pearson: That is its position, but it is very helpful for us if we can say that the view of the Committee is that it would like some movement on that. I am not reading into your decision, Chair, but that was the general feel that we got from the questions.

The Chairperson (Mr Frew): I think that we can safely say that we are supportive of the PSNI's view that they should look at the £100,000 threshold and bring it down. If that is helpful, I do not think that there is any danger or contradiction in that. That also shows why it is important for you to come to the Committee early. That helps us to give you our view as quickly as possible.

Ms Pearson: Thank you.

The Chairperson (Mr Frew): We will leave it at that. The Clerk will probably write to you to confirm exactly what we are seeking. That will allow you to tick all the boxes. Thank you very much.