On 9 February 1995 the European Court of Human Rights unanimously found that the UK was in breach of art 7(1), which forbids retroactive criminal penalties of the European Convention of Human Rights (the convention).

The case before the court involved the nature of a confiscation order made under the Drug Trafficking Offences Act (DTOA) 1986.The significance of this case clearly has profound implications concerning the nature of DTOA legislation.

What this case has proved is that legislative attempts to control the 'scourge of drug trafficking', although an international effort, cannot rise above international law.

Significantly, just prior to the court reaching its decision upholding a breach of art 7(1), the US Supreme Court similarly found that the confiscation orders within their commensurate legislation were criminal penalties and could in certain circumstances be in breach of the US constitution (see Austin v the United States and Alexander v the United States, decisions of 28 June 1993, 125 LEd 2d 441 and 488).The incontrovertible impact of the ratio of the judgment is that it, for the purposes of the DTOA, defines what is meant by the term 'criminal penalty'.

This case also provided the first opportunity for the court to discuss the nature of such a penalty under art 7.On 24 August 1988 Peter Frederick Welch was found guilty of possessing cocaine with intent to supply, on dates in 1986 and given an overall sentence of 22 years.

In addition the trial judge imposed a confiscation order pursuant to the DTOA to the amount of £66,914.

This was later reduced by £7000 to £59,914 on appeal.

In default of payment of the sum he would be liable to serve a consecutive two-year prison sentence.The operative provisions of the DTOA came into force on 12 January 1987, some two months after Mr Welch was originally arrested and charged.

The DTOA was therefore only able to be applied to Mr Welch's circumstances as a result of charges in February and May 1987 which related to offences committed in 1986.

Despite the fact that the law was not in force at the time that Mr Welch was alleged to have committed the offences, the Act allows for retrospective application.The European Court held that the only question to be determined therefore was whether the order constituted a penalty within the meaning of art 7(1), which states: 'No one shall be held guilty of a criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed.

Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed.'In order to determine whether the article had been violated, the court posed the question: is a confiscation order under the DTOA penal in nature or, as was the government's case, is it essentially reparative and preventive in purpose and consequently more civil in character?The DTOA is without question Draconian in its effect and it has often been held to be so (R v Smith (1989) 89 CAR 235, R v Dickens (1990) 91 CAR 164, both per Lord Lane, then Chief Justice).

The legislation requires the Crown Court to assume that any property held by a defendant in a six-year period ending at the time of his arrest is his proceeds of drug trafficking.A confiscation order is not limited to the offence found proved.

It may include unlimited assets, including a family home, which need not have any connection with drug trafficking.

The order is then enforceable by up to ten years' imprisonment in default of payment.

The court is entitled to make presumptions that property has been illicitly acquired, the standard to be applied is the civil standard rather than the criminal standard.In defining the nature of a penalty the court held that the concept was autonomous and as such the court was able to go behind appearances and assess for itself whether a particular measure amounted in substance to a penalty within the meaning of the provision.The court found that the penalty was dependent on there having been a criminal conviction.

In assessing the nature and purpose of the sentence the court was of the view that, 'legislation which confers such broad powers of confiscation on the courts also pursues the aim of punishing the offender.

Indeed, the aims of prevention and reparation are consistent with a punitive purpose and may be seen as constituent elements of the very notion of punishment.'Having satisfied itself that it had correctly addressed the components of a penalty the court held that: 'Taking into consideration the combination of punitive elements outlined above, the confiscation order amounted, in the circumstances of the present case, to a penalty.' As such there had been a breach of art 7(1).

The court has postponed any final decision on damages.The Welch judgment is of tremendous assistance in helping to define the component parts of a criminal penalty.

At the same time, it is difficult not to be left with a sense that the decision has opened a Pandora's box in relation to both national and international law in drug trafficking and confiscation orders generally.

With reference to the former, it appears likely that certain aspects of the legislation will have to be reviewed.

For instance: now that the confiscation order has been identified as being a criminal penalty, should the defendant not now have all the guarantees afforded within the criminal justice system? Its application retrospectively is now without question unlawful.The decision does appear to be a victory for common sense in relation to the retrospective application of the DTOA and Mr Welch's own circumstances.

Yet this decision, and those recent rulings of the US Supreme Court, indicate that the arsenal against drug trafficking needs to involve measures commensurate with minimum international human rights standards and that it is foolhardy to assume that the fight against drug trafficking, however important it may be, can transcend those universal principles.