On 26th May 2016 new offences created by the Psychoactive Substances Act 2016 (“PSA 2016”) formally come into force. The Act brings into law the following offences:
- Section 4 – Producing a psychoactive substance
- Section 5 – Supplying, or offering to supply, a psychoactive substance
- Section 7 – Possession of psychoactive substance with intent to supply
- Section 8 – Importing or exporting a psychoactive substance
The Act is intended to focus on the supply of so called “Legal Highs”, and setting aside whether the new legislation is realistically enforceable, it is clearly targeting businesses that until this moment in time had been engaging in legitimate activity.
For those defendants unfortunate enough to fall foul of the new laws these offences have now been placed within Schedule 2 of the Proceeds of Crime Act 2002.
“Criminal Lifestyle” Provisions
What does this mean and why does this matter? Any Defendant convicted of a Schedule 2 offence, as well as receiving their sentence, will be subject to the “Criminal Lifestyle” confiscation provisions.
This means that as well as assessing the amount of “Benefit” from the offence they were convicted of (perhaps the value of the psychoactive substances they were found to be importing or exporting), the Crown will also seek to examine their finances over the 6 year period prior to their conviction.
Any property obtained, property held, or expenditure evident within that period will be added to the benefit figure, with defendants required to prove to the Civil Standard that such property is not the proceeds of criminal conduct.
The important thing to bear in mind is an offence under Schedule 2 might be relatively small in scale or financial profit, but it triggers a 6 year investigation into income and expenditure where the burden of proof rests on a Defendant to show the source of every penny of their finances.
Behind the “Lifestyle” POCA proceedings is a statutory assumption – that property obtained, held or expenditure evident is the proceeds of a defendant’s “General Criminal Conduct”. Businesses caught by the new Act may find an overzealous Financial Investigator seeking to assert that their business dealings in “legal highs” over the previous six year period should fall into this category, due to the change in the law.
Such assertions should be strongly resisted with argument that Parliament did not intend the PSA 2016 to be retrospective law, and to assert that business dealings that were legal prior to 26th May 2016 should fall into a Defendant’s “General Criminal Conduct” would fall foul of Article 7 of the European Convention on Human Rights.
Although it remains to be seen in practice how the Prosecution will approach Confiscation Proceedings arising from the new legislation, what is clear is that defendants who face such complex proceedings should seek expert representation. Benefit figures generated by the Prosecution can be satisfied using legitimate assets.
Olliers Solicitors – Specialist Confiscation Lawyers
Written by Tom Cawley a Solicitor specialising in all aspects of Confiscation and Asset Recovery.