What are we going to do? 

Criminals should never benefit from the proceeds of their crimes. This bill will strengthen the ability of the criminal justice system to pursue those who have benefited from criminal activity. The bill will also ensure that the police and the courts have the necessary powers to tackle fraud by banning SIM farms, technical devices that allow criminals to send scam texts to thousands of people at the same time. 

Measures in the Crime and Policing Bill will:  

(a) Reform the confiscation regime – the statutory framework used to strip criminals of their proceeds of crime – to improve the process by which confiscation orders are made and enforced.   

(b) Introduce a new measure to redirect funds to victims when a confiscation order is uplifted because it is identified that the defendant has additional assets to pay towards it. 

(c) Introduce costs and expenses protections for enforcement agencies in civil recovery proceedings in the High Court or, in Scotland, the Court of Session. 

(d) Create a new criminal offence of possessing or supplying devices known as “SIM farms” without good reason or adequate due diligence. The bill will also allow the extension of the ban to other technologies that are at significant risk of being exploited by criminals to scam the public.  

How are we going to do it? 

The bill substantially overhauls the confiscation regimes contained in Parts 2 and 4 of the Proceeds of Crime Act 2002 (POCA) which apply to England and Wales, and Northern Ireland respectively. The reforms will bolster the current system, by giving the courts more powers to make realistic and proportionate confiscation orders, improve the enforcement of orders, and speed up confiscation proceedings. Reform will improve the recovery rate of assets, which will lead to more funds being successfully returned to victims; and more funds for public services to deal with crime.  

The bill also contains a measure to redirect funds to victims who have an outstanding compensation order following an uplift of a confiscation order to remedy their outstanding losses.  

The bill introduces costs and expenses protection for enforcement authorities in civil recovery proceedings before the High Court or, in Scotland, the Court of Session, preventing the court from ordering costs against them unless certain tests are met. 

The bill introduces new offences of possessing or supplying devices known as “SIM farms”. These offences will be subject to a defence where there is a good reason for their use and where adequate due diligence has been undertaken. The maximum penalty for the offence in England and Wales will be an unlimited fine. A power is also conferred on the Secretary of State, by secondary legislation, to introduce further new offences to criminalise the possession or supply of other specified articles, where there is a significant risk of them being used for fraud and following consultation with stakeholders. 

Background 

Confiscation of proceeds of crime 

Part 2 of POCA contains the legislative scheme for the recovery of assets acquired through criminal means, in England and Wales and Part 4 provides for the equivalent scheme for Northern Ireland. A confiscation order is an order imposed by the court against a convicted defendant, ordering them to pay the amount they benefited from their criminal activity. For example, a person who commits fraud and benefits by £100,000 would be ordered to pay back the £100,000. The subject of a confiscation order will have a set amount of time to satisfy their confiscation order, after which the order will start to accrue interest. 

In November 2018, the Home Office asked the Law Commission to undertake a review of the current confiscation regime and make recommendations for legislative reform. In November 2022, the Law Commission published its final report containing 119 recommendations. The then government published its response to the Law Commission in October 2023. ^{[footnote 1]} 

To inform the response and proposed reforms, the Home Office consulted widely across government, law enforcement, civil society, legal practitioners, and academia. 

Key reforms include: 

(a) Introducing a statutory objective for the confiscation regime to guide the exercise of the powers: “to deprive a defendant of his or her benefit from crime”. 

(b) Multiple measures to better prioritise compensation for victims and legitimate third-party interests, including following an uplift of a confiscation order under POCA, ensuring that funds which would previously have been remitted to the government in their entirety will now be paid to victims to remedy their outstanding losses. 

(c) Early resolution of confiscation, through a procedure after the sentencing but before the making of a confiscation order to narrow the issues in dispute and fast-track agreed orders. 

(d) Make it easier to restrain assets and preserve their value during an investigation, by clarifying the requirements for making a restraint order. 

(e) Introducing flexibility into the test for the calculation of a defendant’s benefit from crime, to ensure orders are accurate and enforceable. 

(f) Codifying the concept of hidden assets by clarifying the approach the court should take when a defendant hides their assets from law enforcement agencies, to ensure the value of those assets is still re-paid. 

(g) Enable cases to be heard in the appropriate forum, allowing both the Magistrates’ and Crown Court to enforce confiscation orders, and enabling some appeals to be heard in the Crown Court rather than the High Court. 

(h) Optimising the enforcement of confiscation by introducing: 

• “Confiscation enforcement plans”, to be imposed by the court when a confiscation order is made, to detail the orders the enforcing court can make in the event the defendant defaults on the payment of their confiscation order. 

• Extending the enforcement powers of the Magistrates’ court to the Crown Court.  This will allow the most appropriate court to enforce the confiscation order based on the facts and complexity of each case. 

• Confiscation assistance orders, enabling orders to be enforced promptly, and standardising best practice for appointing an appropriately qualified person to assist a defendant with satisfying their confiscation order. 

(i) Provisional discharge of confiscation orders, allowing outstanding confiscation orders to be placed in abeyance where there is no realistic prospect of recovery in the immediate term, and all enforcement steps have been exhausted. This would not bluntly write off the debt. The discharge would be provisional so that money could still be recovered in time if an order was revoked. 

(j) Consolidate existing appeal rights for confiscation into POCA to ensure that the law is clear, transparent, and easily accessible. 

Costs protections 

Civil recovery describes the broad set of powers available to law enforcement agencies in the UK to take ownership of assets which a civil court is satisfied (on the balance of probabilities) derive from criminal conduct.  

In relation to the use of High Court and Court of Session civil recovery powers under POCA, there has been a longstanding concern that the loser pays principle (for example in the Civil Procedure Rules in England and Wales)  exposes law enforcement agencies to the risk of strains on their budgets, particularly in cases against wealthy individuals with expensive legal representatives.   

The Economic Crime (Transparency and Enforcement) Act 2022 amended the unexplained wealth order (UWO) provisions in POCA by preventing the court from ordering costs or expenses against law enforcement agencies unless they act unreasonably, improperly or dishonestly. This aimed to encourage the use of the UWO powers by relevant enforcement authorities. 

The risk of adverse costs is a major barrier to enforcement authorities prosecuting high-end money laundering cases, including those involving kleptocrats and other wealthy individuals. Expensive litigation is one of the risk factors that enforcement authorities actively consider, which has an impact on their decision to pursue an investigation as their budgets are limited. Costs protections will provide a positive step forward for the UK’s broader goal of tackling kleptocracy and other serious economic crime.  

SIM farms  

Fraud now accounts for approximately 41% of all estimated crime in England and Wales (CSEW YE September 2024). ^{[footnote 2]} This is exacerbated by the increasing technological sophistication of the tools available to fraudsters, which allow them to target victims at scale. 

Short Messaging Service (SMS) messages are a key method used by fraudsters to target the UK public and are frequently traced back to SIM farms. SIM farms are available to buy at low prices, with limited or no requirement to verify the buyer’s identity. This makes them an easy-to-access, low-cost option to fraudsters looking to deceive victims into giving sensitive information such as bank details and commit fraud.  

The Home Office ran a public consultation on these measures from 3 May 2023 to 14 June 2023. [^3 Responses to the consultation agreed the government’s approach would raise the barrier to entry for those engaging in illegal activities, making it more difficult to obtain and exploit SIM farms for fraud. However, concerns were raised that there were potential legitimate uses captured by the government’s definition of a SIM farm. Therefore, the bill includes a defence to the new criminal offence which covers legitimate uses. The majority of respondents did not object to the Secretary of State extending the ban to further articles in the future by secondary legislation, subject to very clear parameters. 

The then government’s response to the consultation and the way forward was published on 27 November 2023.    

Key statistics 

Confiscation of the proceeds of crime  

There were £243.3 million of assets recovered from confiscation, forfeiture, and civil recovery orders in the financial year 2023/24. Receipts have risen by 3 per cent compared to £235.6 million in 2018/19 and are 2 per cent higher than the six-year median of £239.4 million. 

SIM farms  

Everyone is at risk of being victimised. Fraud accounts for approximately 41% of all offences reported by the Crime Survey England and Wales crime (making it the most common crime type) in the year ending September 2024 ^{[footnote 4]}. That made approximately 1 in 15 adults a victim of fraud in that period ^{[footnote 5]}. The total cost to society of fraud against individuals in England and Wales was estimated at £6.8bn in 2019/20 (Home Office). 

In the period November 2023-January 2024, 68% of those surveyed said they had received a suspicious message, in the form of either a text, recorded message or live voice call to a landline, mobile or an app message. This represents an estimated 37.4 million adults in the UK. ^{[footnote 6]} 

Texts are the most common form of suspicious message with 56% of mobile users reporting that they had received suspicious texts. A further 26% of respondents reported they had received a suspicious app-based message. 3% of respondents who had received a suspicious text/app message/live call said they clicked on the link and then did as instructed by the message/person. This equates to approximately 1.65 million adults aged 16+ in the UK.  

Frequently asked questions 

Confiscation regime reform 

Why are the reforms to the confiscation regime needed?  

The legal framework for the recovery of criminals’ assets is complicated and confusing. Wholesale reform is required to ensure criminals do not benefit financially or materially; to compensate victims; and stop criminal assets being used to fund further criminality.  

The reforms address criticisms from the Law Commission of England and Wales, the National Audit Office, the Public Accounts Committee, and the Home Affairs Select Committee, which expressed concerns regarding the complexity and enforcement of the confiscation regime 

How much more will be recovered as a result of these reforms? 

Reforms to the confiscation regime are estimated to increase the amount of criminal assets recovered by the government to between £25.2 million and £126.1 million, with a central estimate of £75.7 million over ten years.  

The measures will also improve the efficiency and speed with which confiscation order cases progress and conclude.  

What will this mean for the confiscated assets? 

Confiscated funds are returned to victims or retained by the state and reinvested into tackling economic crime.  

Under the Asset Recovery Incentivisation Scheme (ARIS), recovered proceeds of crime are split between operational partners, based broadly on their relative contribution to the recovery of the assets, and central government.  

Since 2006/07, £1.3 billion of the assets recovered under POCA have been returned to law enforcement agencies, prosecutors and the courts to fund further asset recovery capability or work that protects the public from harm.  

The Home Office’s share of ARIS receipts supports investment in priority front line activity, including supporting and safeguarding victims, delivering the policy response to economic crime and delivering statutory obligations. 

Will the reforms contribute to the recovery of uncollected confiscation debt? 

Yes. Multiple measures in the bill are designed to optimise enforcement. These will be used to full effect to recover both sums payable under new and historical confiscation orders.  

When there is no realistic prospect of recovering the remainder of an order, despite the reasonable efforts of law enforcement authorities, the bill will provide for those orders to be provisionally discharged.  

Even if it is judged that no enforcement action can immediately be taken to recover provisionally discharged confiscation orders, this would not bluntly write off the debt. The discharge would be provisional so that money could still be recovered in time if an order was revoked.  

Should any offender come into funds, the order for provisional discharge would be removed immediately to provide for enforcement action. This will ensure crime does not pay. 

Unlimited enforcement is not viable because it is not without costs ultimately borne by the taxpayer. This principle is already recognised by sections 24 and 25 of POCA, which provide for orders to be written off in narrow circumstances. 

Why aren’t newly identified victims able to receive funds recovered from a confiscation order uplift?  

The measure to redirect funds to victims with outstanding losses following the making of an uplift order under POCA will only be available to victims whose losses were factored into the compensation order process as part of the original criminal proceedings against the defendant.   

This is because allowing new victims to be included without new proceedings would effectively alter the defendant’s original sentence. This is important for a fair criminal justice system.  

New victims can be compensated through separate compensation orders or civil routes.  

Why doesn’t the measure to redirect uplifted funds to victims apply when the uplift has already been made, but the defendant has not finished paying it yet? 

The measure will be considered by the court at the time an uplift is made. For those who have already been subjected to an uplift at the time of commencement, that uplifted amount will be out of scope of the new measure.  

This is because revisiting these cases post-commencement could interfere with the finality of the uplift and would incur a significant administrative burden which may not be balanced out by the funds that would actually be recovered for victims.  

However, any voluntary schemes run by the CPS or prosecutors to return funds to victims can still apply to provide funds to victims where possible.  

Costs protections 

What does this mean for the principle that the loser pays the winner’s costs? 

In civil recovery proceedings, and civil law generally, the general rule is that the “losing party” of a case will be ordered by the court to pay the legal costs of the winning party. This exposes enforcement authorities to the risk of strains on their budgets, particularly in cases against wealthy elites with costly legal representatives.  Enforcement authorities work to make decisions in the public interest, and it is detrimental to the protection of the public if authorities are deterred from making decisions to pursue an investigation for fear that if those decisions were challenged, and if the challenge were successful, they would face adverse costs and expensive litigation. The government is therefore amending the loser pays principle to ensure that the court does not make an order for costs against an enforcement authority unless the authority acted unreasonably, dishonestly or improperly during the course of proceedings, or it would be just and reasonable to make such an order against them. 

Will this reform mean an increase in cases? 

This reform will not of itself enable enforcement authorities to resource more cases. However, it will increase their confidence in using POCA powers and removes barriers that they currently face in being able to pursue criminals with high net-worths. 

SIM farms  

What are SIM farms? 

A SIM farm is a device which is capable of using five or more SIM cards to make phone calls to phone numbers that or on national or international numbering plans; or to send or receive text messages to or from such numbers. SIM farms are used by criminals to make calls and to send out thousands of scam texts to defraud the public of millions of pounds.  

What are you trying to achieve? 

SIM farms are currently sold openly on online marketplaces and it is legal to possess them even though there is clear evidence that, apart from a few legitimate uses, there is no good reason to possess one other than to commit fraud. 

The bill will ensure that these devices are not sold without adequate due diligence by the seller and that no one should be in possession of a SIM farm without a clear legitimate rationale. 

By doing this, we will make it difficult and unprofitable for criminals to get hold of SIM farms and use them to defraud the public. The new offence will also bolster law enforcement agencies in investigating and disrupting criminals who are in possession of a SIM farm but have not yet started using it to commit fraud. 

How will you ensure the legislation does not disrupt legitimate businesses? 

The legislation will stop fraud at source without placing an undue burden on legitimate businesses. The Home Office held a public consultation on the proposals to ban SIM farms and engaged extensively with a variety of stakeholders, including legitimate businesses. We have considered their responses during the drafting of the new offence and have developed defences to protect legitimate businesses. 

How will powers to ban further technologies in the future be used? 

The pace of technological change is rapid, and fraudsters are quick to adapt their methods to take advantage of emerging capabilities and any attempts to disrupt their illegal activities. These powers are necessary to ensure that we are able to respond to any new threats that emerge in the future rapidly and flexibly by extending the ban to other types of equipment, if required. 

Any new offence will only be introduced where there is clear evidence of significant risk that the technologies in question are used in connection with fraud, and the bill contains an express requirement to consult those likely to be affected by the ban prior to introducing any new offence. Any regulations introducing a new offence must be debated and approved by both Houses of Parliament.

Footnotes