World Uyghur Congress, R (On the Application Of) v National Crime Agency

Factual and Procedural Background

This appeal concerns whether the Defendant, the National Crime Agency ("NCA"), misdirected itself in law when deciding not to investigate alleged offences under Part 7 of the Proceeds of Crime Act 2002 ("POCA") and not to commence a civil recovery investigation under Part 5 of POCA regarding certain cotton products imported into the UK and monies connected to their purchase.

The Appellant, a non-governmental organisation promoting the interests of an ethnic group in a specific region of China, brought judicial review proceedings against three law enforcement agencies, including the NCA, challenging their decisions not to investigate whether consignments of cotton goods imported into the UK were produced using forced labour or other human rights abuses.

The other two defendants ceased involvement, leaving the claim against the NCA as the sole continuing matter. The Appellant argued that the NCA's decision letter revealed two fundamental legal errors: (i) that a specific product must be identified as criminal property before an investigation into money laundering can commence, and (ii) that the presence of a person relying on an exemption under section 329(2)(c) of POCA "cleanses" criminal property, precluding recovery.

The background facts include the Appellant providing substantial evidence of forced labour in the cotton industry of the region to the Defendants, seeking enforcement action. Correspondence from April 2020 to late 2021 culminated in a decision letter from the Government Legal Department on behalf of the Defendants, explaining the reasons for refusing to investigate under POCA and other statutes.

The decision letter stated there was no proper basis for a POCA investigation due to the absence of specifically identified criminal property and criminal conduct, and described such an investigation as "misconceived". The Appellant contended that this reflected a legal misdirection, as investigations can commence without such specific identification.

Legal Issues Presented

1. Whether the NCA misdirected itself in law by requiring identification of specific criminal property before commencing an investigation under POCA.
2. Whether the NCA erred in law by treating the exemption under section 329(2)(c) of POCA as cleansing criminal property and precluding its recovery or the recovery of proceeds of its onward sale.

Arguments of the Parties

Appellant's Arguments

• The NCA was legally wrong to require identification of specific criminal property before starting an investigation under POCA.
• The decision letter showed the NCA misunderstood the exemption under section 329(2)(c) of POCA, wrongly treating it as removing the criminal status of property rather than a personal exemption from liability.
• Investigations should be permitted to start on the basis of general evidence or suspicion, without needing conclusive proof at the outset.
• The Judge below failed to properly address these legal errors and instead treated the challenge as one of rationality rather than misdirection in law.

Defendant's Arguments (NCA)

• The decision letter did not make the first alleged legal error; it did not require specific identification of criminal property before investigation.
• The admitted error regarding section 329(2)(c) was immaterial and did not affect the validity of the decision.
• The NCA was entitled to conclude there was insufficient evidence to warrant an investigation with a realistic prospect of success.
• It would be illogical to require proof of a fact before investigating whether that fact existed.

Intervenor's Arguments (Spotlight on Corruption)

• Concerned that the Judge's interpretation would discourage investigations into overseas corruption absent concrete evidence of specific crimes.
• Argued that the Judge misapplied section 329(2)(c), incorrectly suggesting that payment of adequate consideration breaks the chain of criminal property liability.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed the relevant provisions of POCA, focusing on the legal definitions of "criminal property" and "criminal conduct", and the statutory exemptions under sections 327 to 329. It emphasised that the concept of criminal property is fluid and depends on the state of mind of the individual handling the property.

The court found that the NCA's decision letter, read naturally, indicated a misdirection in law by requiring identification of specific criminal property and criminal conduct before commencing an investigation. This was contrary to accepted legal principles and the concessions made by the NCA during the appeal.

Further, the court held that the NCA erred in treating the exemption under section 329(2)(c) as "cleansing" criminal property, thereby precluding recovery or investigation. The exemption is personal and does not affect the status of the property itself.

The court noted that the Judge below did not properly address the Appellant's legal challenge and instead treated it as a rationality challenge, focusing on evidential difficulties rather than legal correctness. The Judge appeared to endorse the erroneous proposition that identification of criminal property was a prerequisite to investigation.

The court concluded that the NCA's approach was a clear legal error and that the decision not to investigate could not stand on that basis.

Holding and Implications

The court ALLOWED THE APPEAL and QUASHED the NCA's decision not to investigate under Part 7 and Part 5 of POCA.

The matter is remitted to the NCA for reconsideration in light of the correct legal principles. The decision clarifies that investigations under POCA may commence without prior identification of specific criminal property or criminal conduct, and that the exemption under section 329(2)(c) does not affect the criminal status of property for investigation or recovery purposes.

No new precedent was established beyond the clarification of the correct legal interpretation in this context. The ruling ensures that investigative authorities are not unduly restricted from commencing investigations into suspected criminal property based on premature evidential thresholds.