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UK banks have agreed to government data sharing proposals on suspected financial criminals, but say they want the public sector to share its data with them. The banks also express doubts about whether the plans would actually help to catch criminals.

The British Bankers' Association (BBA) outlines its views on the new plans in a response to the Home Office's recent consultation paper on organised crime. That paper outlined a number of anti-crime measures, including the creation of corporate ASBOs for companies suspected of participating in organised crime.

"Data sharing between the public and private sector has to be a two way process," said the response of the BBA to the Home Office. The BBA also asks that "[data sharing] does not occur where there is no need, and avoids creating a competitive advantage".

The Home Office released a consultation paper proposing new powers to tackle organised and financial crime. The consultation period is over and its results are expected in November. The BBA was critical in its response of the government's handling of financial crime in the past.

"The Home Office proposals need to form part of an overall package of measures that will address the fundamental problem of a lack of strategic leadership in government in tackling financial crime that has contributed to the inconsistent measurement, prevention, enforcement and prosecution of fraud in the UK," said its response to government.

The paper from government proposed the creation of "corporate ASBOs", control orders on companies which are suspected of being involved in criminal activity. In the introduction to the report, Home Secretary John Reid admitted that the orders would be used where there was not enough evidence for a prosecution. "These sort of orders might be used in cases where there was a strong weight of evidence but not enough for a prosecution," he wrote.

The BBA expressed reservations about the effects of such orders. "At a pragmatic level, the proposal seems a laudable way of targeting the activities of those on the fringes of criminal activity without imposing further burdens on an already straining criminal justice system," its response said. "However, as an indication of government intentions towards tackling the causes of crime, the proposed Ocpo (Organised Crime Prevention Order) raises a number of concerns."

"These are: unless designed to prevent harm rather than as a punitive measure, such orders might attract the protection of Article 6 of the European Convention of Human Rights; inappropriate application of Ocpo against an innocent institution, as a third party supplier to the recipient of the order; pressure for banks and other financial institutions to, in effect, monitor and police the operation of the Ocpo and the recipient's compliance with it; Ocpos should not replace the deterrence of prosecution where the necessary evidence and proof of criminality exists."

The BBA also said the plans will not necessarily lead to more prosecutions of criminals. "It is clearly disappointing that the proposals in themselves, even if implemented fully, will not necessarily lead to increased police and law enforcement investigations and prosecutions," said the BBA.

"The absence of any mandating or tasking of police investigations makes it difficult to determine what the law enforcement outputs would be, if any. While interesting and useful to obtain a greater understanding of the lifetime career of individual fraudsters, there can be no more effective deterrent than prosecution, sentencing, and asset recovery."

The BBA represents 240 banks from 60 countries and claims that financial services account for 8.5 per cent of the UK economy and a quarter of UK corporation tax.

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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