Supply Chains And The Proceeds Of Crime: A Green Light For Slavery Products?

• Published date: 10 April 2023
• Subject Matter: Government, Public Sector, Criminal Law, Money Laundering, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: BCL Solicitors LLP
• Author: Mr John Binns

A recent judgment endorses UK investigators' doubts about pursuing retailers whose supply chains seem to involve the proceeds of crime. But is it right? BCL partner, John Binns writes.

A green light for slavery products?

The World Uyghur Congress (WUC) recently challenged the National Crime Agency (NCA) and others in a judicial review in the High Court. The case concerned the agencies' failure to take action under the Proceeds of Crime Act 2002 (POCA), in circumstances where (the WUC said) UK retailers are stocking and selling goods that represent the proceeds of slave labour.

The NCA's response, endorsed by Dove J in a brief judgment¹, highlighted three problems with pursuing the retailers and their profits under POCA, said to be prohibitive in cases that involve long supply chains. The result is controversial, both in legal terms, and because it arguably gives a green light for practices that contribute to very serious human suffering.

By way of background, POCA prohibits various dealings with, and arrangements concerning, 'criminal property', which means property that (to any extent) represents the proceeds of 'criminal conduct', where the person involved knows or suspects that this so. 'Criminal conduct' (the 'predicate offence') can include conduct that was lawful where it occurred, but would be unlawful if it happened here.

Importantly, under section 329(2) of POCA, someone who acquires criminal property for 'adequate consideration' does not commit an offence, even if they know or suspect that it is so. But section 329(3) goes on to give two caveats to this, in that it does not apply where either the value of the consideration is significantly higher or lower than the value of the property, or where the acquirer knows or suspects that the products or services they provide in return 'may help' someone to commit criminal conduct.²

Three key problems

The WUC presented the NCA with voluminous evidence that goods sold in the UK represented the proceeds of modern slavery. But the NCA said that it would have three key problems pursuing these through POCA. First, it said, it would have to prove in proceedings the specific property involved, stating which consignments from which suppliers were involved. Second, it would have to prove the specific conduct involved, stating what had been done, where and by whom. They would have problems with obtaining evidence for both, particularly from China.

The third problem, they said, was 'adequate consideration'. Not...