Money Laundering Solicitors
Summary of Offences Under Proceeds of Crime Act 2002 ´POCA´
The offence is to deal in criminal property.
Criminal property is property that comes from criminal conduct.
The law is complex and you definitely need a solicitor if you are to be interviewed under the Proceeds of Crime Act 2002.
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The explanatory notes to the POCA 2002 define "money laundering" as "the process by which the proceeds of crime are converted into assets which appear to have a legitimate origin, so that they can be retained permanently or recycled into further criminal enterprises".
Money Laundering offences apply to businesses and individuals in business where they operate in within the regulated sector.
Money laundering was first criminalised in the United Kingdom in relation to the proceeds of drug trafficking (DTOA 1986). Further drug money laundering offences were subsequently created (DTA 1994), together with separate offences relating to the proceeds of other criminal conduct (CJA 1988) and terrorist funds (Prevention of Terrorism (Temporary Provisions) Act 1989).
The three principal money laundering offences (ss.327-329) replace the parallel drug and non-drug crime money laundering offences with single offences that do not distinguish between the proceeds of drug trafficking and the proceeds of other crimes.
The prosecution have to prove that a person charged with an offence knew or suspected that 'criminal property' came from ' criminal conduct.'
The offences of failing to disclose possible money laundering (ss.330-332), relate to those working in the business sector.
The prosecution have to prove in the business sector that a person charged with an offence knew or suspected or ought to have suspected that 'criminal property' came from 'criminal conduct.'
This is the 'negligence' test referred o below.
Section 330 concerns a person who receives information in the course of a business in the regulated sector, as defined in Schedule 9 and who thereby knows or suspects or has reasonable grounds for knowing or suspecting that another person is engaged in money laundering, and who fails to disclose to a nominated officer (see ss.338(5), 336(11) and 340(12)), or a person authorised for the purposes of Part 7 by the Director General of the Serious Organised Crime Agency, the information on which his knowledge or suspicion is based.
Section 331 penalises a failure by a nominated officer working in the regulated sector, who receives a report under section 330, to disclose that report as soon as practicable where he has the requisite mens rea (which is the same as that in section 330).
Section 332 is in similar terms to section 331 save that it relates to nominated officers both inside and outside the regulated sector who receive reports under section 337 or 338 (a disclosure in relation to one of the principal money laundering offences or a voluntary disclosure).
Section 330(2)(b) and section 331(3)(b) introduce a negligence test which means that an offence would be committed where a person has reasonable grounds for knowing or suspecting that another person is engaged in money laundering (as defined in s.340(11)), even if he did not actually have any such knowledge or suspicion. The basis for reporting suspicions that money laundering has occurred, or that funds derive from criminal conduct, is the criminal law of the United Kingdom. There is no duty to consider the law of any other country, but there is a duty to have regard to United Kingdom criminal law regardless of where the conduct in question occurred (see s.340(2) and (11)).
The interpretation section (s.340, is of crucial importance. Each of the principal money laundering offences (ss.327-329) requires proof that the conduct concerned "criminal property".
Section 340(3) provides that property is criminal property if it constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or in part and whether directly or indirectly), and the alleged offender knows or suspects that it constitutes such a benefit. "Suspects" is also sufficient knowledge to prove the offences in sections 332, 333, 336(5) and 342.
Sections 330 and 331 ( offences that may only be committed by a person working in the regulated sector) introduce an objective or "negligence" test in that a person may be convicted if there were reasonable grounds for knowing or suspecting that another person was engaged in money laundering.
Legislation
Proceeds of Crime Act 2002, s.327
Concealing etc
(1) A person commits an offence if he -
(a) conceals criminal property;
(b) disguises criminal property;
(c) converts criminal property;
(d) transfers criminal property;
(e) removes criminal property from England and Wales or from Scotland or from Northern Ireland.
(2) But a person does not commit such an offence if -
(a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent;
(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;
(c) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactmentrelating to criminal conduct or benefit from criminal conduct.
(2A) Nor does a person commit an offence under subsection (1) if -
(a) he knows, or believes on reasonable grounds, that the relevant criminal conduct occurred in a particular country or territory outside the United Kingdom, and
(b) the relevant criminal conduct -
(i) as not, at the time it occurred, unlawful under the criminal law then applying in that country or territory, and
(ii) is not of a description prescribed by an order made by the Secretary of State.
(2B) In subsection (2A) "the relevant criminal conduct" is the criminal conduct by reference to which the property concerned is criminal property.
(2C) A deposit-taking body that does an act mentioned in paragraph (c) or (d) of subsection (1) does not commit an offence under that subsection if -
(a) it does the act in operating an account maintained with it, and
(b) the value of the criminal property concerned is less than the threshold amount determined under section 339A for the act.
(3) Concealing or disguising criminal property includes concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it.
"Criminal property" is defined in section 340(3). As in the case of all the offences concerning "criminal property", the offence is only committed where a person knows or suspects that the property, the subject of the charge, constitutes or represents his own or another's benefit from criminal conduct (s.340(3)(b)). Even under the legislation replaced by the 2002 Act the prosecution had to prove that the property, the subject of the charge, was in fact the proceeds of criminal conduct or of drug trafficking
"Criminal conduct" is defined in section 340(2) as "conduct which
(a) constitutes an offence in any part of the United Kingdom, or
(b) would constitute an offence in any part of the United Kingdom if it occurred there".
The prosecution may prove that property is "criminal property"
(a) by showing that it derived from conduct of a specific kind or kinds and that conduct of that kind was unlawful, or
(b) by evidence that the circumstances in which the property was handled which were such as to give rise to an irresistible inference that it could only have been derived from crime:
Proceeds of Crime Act 2002, s.328
Arrangements
(1) A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.
(2) But a person does not commit such an offence if -
(a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent;
(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;
(c) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.
(3)Nor does a person commit an offence under subsection (1) if -
(a) he knows, or believes on reasonable grounds, that the relevant criminal conduct occurred in a particular country or territory outside the United Kingdom, and
(b) the relevant criminal conduct -
(i) was not, at the time it occurred, unlawful under the criminal law then applying in that country or territory, and
(ii) is not of a description prescribed by an order made by the Secretary of State.
(4) In subsection (3) "the relevant criminal conduct" is the criminal conduct by reference to which the property concerned is criminal property.
(5) A deposit-taking body that does an act mentioned in subsection (1) does not commit an offence under that subsection if -
(a) it does the act in operating an account maintained with it, and
(b) the arrangement facilitates the acquisition, retention, use or control of criminal property of a value that is less than the threshold amount determined under section 339A for the act.
Proceeds of Crime Act 2002, s.329
Acquisition, use and possession
(1) A person commits an offence if he -
(a) acquires criminal property;
(b) uses criminal property;
(c) has possession of criminal property.
(2) But a person does not commit such an offence if -
(a), (2) But a person does not commit such an offence if -
(a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent;
(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;
(c) he acquired or used or had possession of the property for adequate consideration;
(d) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct
Financial services employees and businesses
Since section 328 makes it an offence for a banker, who knows or suspects that money in a customer's account is criminal property, to proceed to process the customer's cheque into the account of another person without having made an authorised disclosure under section 338 and without having obtained appropriate consent under section 335 and since it would be no defence to criminal proceedings that the bank was contractually obliged to obey its customer's instructions, there would be no basis upon which an injunction could be granted by a court during the periods prescribed by section 335 requiring the bank to act for the customer, unless it was shown that there was no basis upon which criminal liability would arise because there was no "suspicion" on the part of the bank; but, as to the practicality of a bank establishing that it had such a suspicion by way of defence to an allegation of breach of contract, the only certain way for it to ensure that it does not commit a tipping-off offence (contrary to section 333A) would be for it to avail itself of subsections (2)(c) and (3)(b) of that section, by procuring its professional legal adviser to make the disclosure and then only to a person in connection with legal proceedings; and it would matter not how the disclosure was made because the solicitor could not be cross-examined as he would only be reporting the suspicion of another; and there was no provision under the Act that would enable the person who actually had the suspicion to give evidence in relation thereto; to the extent that there was scope for arbitrary and capricious exercise of power by the relevant public authorities, the remedy available to the customer would be judicial review: K Ltd v. National Westminster Bank Plc[2007] 1 W.L.R. 311, CA (Civ. Div.).
Where a bank was suspicious that funds received into a customer's account by way of CHAPS transfer were the proceeds of crime or a money laundering operation, the bank was not entitled to refuse to accept the transfer on the ground that it would commit a money laundering offence if it did; the bank did not commit an offence under section 93A of the CJA 1988 by accepting a transfer it was legally obliged to accept; however, the bank had to disclose the nature of its suspicions to the relevant authority: Tayeb v. HSBC Bank Plc[2004] 4 All E.R. 1024, QBD (Colman J.). It is submitted that the position would be the same under section 328(1) of the 2002 Act.
Proceeds of Crime Act 2002, s.330
Failure to disclose: regulated sector
(1) A person commits an offence if the conditions in subsections (2) to (4) are satisfied.
(2) The first condition is that he -
(a) knows or suspects, or
(b) has reasonable grounds for knowing or suspecting,
that another person is engaged in money laundering.
(3) The second condition is that the information or other matter -
(a) on which his knowledge or suspicion is based, or
(b) which gives reasonable grounds for such knowledge or suspicion,
came to him in the course of a business in the regulated sector.
(3A) The third condition is -
(a) that he can identify the other person mentioned in subsection (2) or the whereabouts of any of the laundered property, or
(b) that he believes, or it is reasonable to expect him to believe, that the information or other matter mentioned in subsection (3) will or may assist in identifying that other person or the whereabouts of any of the laundered property.
(4) The fourth condition is that he does not make the required disclosure to -
(a) a nominated officer, or
(b) a person authorised for the purposes of this Part by the Director General of SOCA,
as soon as is practicable after the information or other matter mentioned in subsection (3) comes to him.
(5) The required disclosure is a disclosure of -
(a) the identity of the other person mentioned in subsection (2), if he knows it,
(b) the whereabouts of the laundered property, so far as he knows it, and
(c) the information or other matter mentioned in subsection (3).
(5A) The laundered property is the property forming the subject-matter of the money laundering that he knows or suspects, or has reasonable grounds for knowing or suspecting, that other person to be engaged in.
(6) But he does not commit an offence under this section if -
(a) he has a reasonable excuse for not making the required disclosure,
(b) he is a professional legal adviser or relevant professional adviser and -
(i) if he knows either of the things mentioned in subsection (5)(a) and (b), he knows the thing because of information or other matter that came to him in privileged circumstances, or
(ii) the information or other matter mentioned in subsection (3) came to him in privileged circumstances, or
(c) subsection (7) or (7B) applies to him.
(7) This subsection applies to a person if -
(a) he does not know or suspect that another person is engaged in money laundering, and
(b) he has not been provided by his employer with such training as is specified by the Secretary of State by order for the purposes of this section.
(7A) Nor does a person commit an offence under this section if -
(a) he knows, or believes on reasonable grounds, that the money laundering is occurring in a particular country or territory outside the United Kingdom, and
(b) the money laundering -
(i) is not unlawful under the criminal law applying in that country or territory, and
(ii) is not of a description prescribed in an order made by the Secretary of State.
(7B) This subsection applies to a person if -
(a) he is employed by, or is in partnership with, a professional legal adviser or a relevant professional adviser to provide the adviser with assistance or support,
(b) the information or other matter mentioned in subsection (3) comes to the person in connection with the provision of such assistance or support, and
(c) the information or other matter came to the adviser in privileged circumstances.
(8) In deciding whether a person committed an offence under this section the court must consider whether he followed any relevant guidance which was at the time concerned -
(a) issued by a supervisory authority or any other appropriate body,
(b) approved by the Treasury, and
(c) published in a manner it approved as appropriate in its opinion to bring the guidance to the attention of persons likely to be affected by it.
(9) A disclosure to a nominated officer is a disclosure which -
(a) is made to a person nominated by the alleged offender's employer to receive disclosures under this section, and
(b) is made in the course of the alleged offender's employment
(9A) But a disclosure which satisfies paragraphs (a) and (b) of subsection (9) is not to be taken as a disclosure to a nominated officer if the person making the disclosure -
(a) is a professional legal adviser or relevant professional adviser,
(b) makes it for the purpose of obtaining advice about making a disclosure under this section, and
(c) does not intend it to be a disclosure under this section.
(10) Information or other matter comes to a professional legal adviser or relevant professional adviser in privileged circumstances if it is communicated or given to him -
(a) by (or by a representative of) a client of his in connection with the giving by the adviser of legal advice to the client,
(b) by (or by a representative of) a person seeking legal advice from the adviser, or
(c) by a person in connection with legal proceedings or contemplated legal proceedings.
(11) But subsection (10) does not apply to information or other matter which is communicated or given with the intention of furthering a criminal purpose.
(12) Schedule 9 has effect for the purpose of determining what is -
(a) a business in the regulated sector;
(b) a supervisory authority.
(13) An appropriate body is any body which regulates or is representative of any trade, profession, business or employment carried on by the alleged offender.
(14) A relevant professional adviser is an accountant, auditor or tax adviser who is a member of a professional body which is established for accountants, auditors or tax advisers (as the case may be) and which makes provision for -
(a) testing the competence of those seeking admission to membership of such a body as a condition for such admission; and
(b) imposing and maintaining professional and ethical standards for its members, as well as imposing sanctions for non-compliance with those standards.
The regulated sector and supervisory authorities
Schedule 9 to the 2002 Act provides for the meaning of a business in the regulated sector and the meaning of a supervisory authority for the purposes of Part 7 of the 2002 Act. With one minor exception it is in identical terms to Schedule 3A to the Terrorism Act 2000. Neither schedule is set out in this work.
Proceeds of Crime Act 2002, s.331
Failure to disclose: nominated officers in the regulated sector
Section 331 creates an offence where a nominated officer (see ss.338(5) and 340(12)) working in the regulated sector receives a disclosure under section 330 which causes him to know or suspect, or gives reasonable grounds for knowledge or suspicion, that money laundering is taking place, and does not disclose the information on which his knowledge or suspicion is based or which gives reasonable grounds for such knowledge or suspicion as soon as practicable after the information comes to him.
Subsection (5) specifies that the "required disclosure", which a nominated officer must make, has to be made to the Serious Organised Crime Agency in the form and manner (if any) prescribed by the order making power in section 339.
Proceeds of Crime Act 2002, s.332
Failure to disclose: other nominated officers
Section 332 creates an offence where a nominated officer (see ss.330(9) and 340(12)) receives a report under section 337 or 338 which causes him to know or suspect that money laundering is taking place, where he knows the identity of the suspected money launderer or the whereabouts of the laundered property, or that identity or those whereabouts can be discovered from the information of which he is aware (see subs. (3A)), and he does not make the required disclosure as soon as practicable after the information or other matter comes to him. The nominated officer is required to make the disclosure to the Serious Organised Crime Agency in the form prescribed by section 339. This section applies to nominated officers both inside and outside the regulated sector.
Proceeds of Crime Act 2002, ss.333A-333E
Tipping off: regulated sector
Section 333A creates an offence covering the regulated sector (as defined in Schedule 9) of disclosing to the customer concerned or to other third persons the fact that information about known or suspected money laundering has been disclosed (s.333A(1)) or that a money laundering investigation is being, or may be, carried out (s.333A(3)); it must be proved that the disclosure was likely to be prejudicial.
There is protection from the offence under section 333A for a person who may need to make a prohibited disclosure to another person in the same undertaking, or to a credit or financial institution within the same group; and for a legal professional or other relevant professional adviser who makes a disclosure to an equivalent person within a different undertaking that shares common ownership, management or control, provided that the other undertaking or institution or adviser is situated in an EEA state or in a country or territory imposing equivalent money laundering requirements; and there is also protection for a person where the disclosure is by one credit or financial institution to another, or by one legal professional or other relevant professional adviser to another, where the disclosure relates to a client or former client, or a transaction or provision of a service involving them both and the disclosure is for the purpose of preventing an offence under Part 7 of the Act and the institution or adviser to whom the disclosure is made is situated in an EEA State or in a country or territory imposing equivalent money laundering requirements and both parties are subject to equivalent duties of professional confidentiality and the protection of personal data (ss.333B and 333C).
As in sections 327(2)(c), 328(2)(c) and 329(2)(d), there is protection from an offence under section 333A for law enforcement officers who may need to make a prohibited disclosure in the course of their official duties (s.333D(1)(b)), and there is an additional exclusion for a person who did not know or suspect that the disclosure would prejudice an investigation (s.333D(3) and (4)).
Proceeds of Crime Act 2002, s.342
Offences of prejudicing investigation
(1) This section applies if a person knows or suspects that an appropriate officer or (in Scotland) a proper person is acting (or proposing to act) in connection with a confiscation investigation, a civil recovery investigation, a detained cash investigation, an exploitation proceeds investigation or a money laundering investigation which is being or is about to be conducted.
(2) The person commits an offence if -
(a) he makes a disclosure which is likely to prejudice the investigation, or
(b) he falsifies, conceals, destroys or otherwise disposes of, or causes or permits the falsification, concealment, destruction or disposal of, documents which are relevant to the investigation.
(3) A person does not commit an offence under subsection (2)(a) if -
(a) he does not know or suspect that the disclosure is likely to prejudice the investigation,
(b) the disclosure is made in the exercise of a function under this Act or any other enactment relating to criminal conduct or benefit from criminal conduct or in compliance with a requirement imposed under or by virtue of this Act, or
(ba) the disclosure is of a matter within section 333A(2) or (3)(a) (money laundering: tipping off) and the information on which the disclosure is based came to the person in the course of a business in the regulated sector,
(bb) the disclosure is made in the exercise of a function under Part 7 of the Coroners and Justice Act 2009 (criminal memoirs, etc.) or in compliance with a requirement imposed under or by virtue of that Act,
(c) he is a professional legal adviser and the disclosure falls within subsection (4).
(4) A disclosure falls within this subsection if it is a disclosure -
(a) to (or to a representative of) a client of the professional legal adviser in connection with the giving by the adviser of legal advice to the client, or
(b) to any person in connection with legal proceedings or contemplated legal proceedings.
(5) But a disclosure does not fall within subsection (4) if it is made with the intention of furthering a criminal purpose.
(6) A person does not commit an offence under subsection (2)(b) if -
(a) he does not know or suspect that the documents are relevant to the investigation, or
(b) he does not intend to conceal any facts disclosed by the documents from any appropriate officer or (in Scotland) proper person carrying out the investigation.
(7) A person guilty of an offence under subsection (2) is liable -
(a) on summary conviction, to imprisonment for a term not exceeding six [12] months or to a fine not exceeding the statutory maximum or to both, or
(b) on conviction on indictment, to imprisonment for a term not exceeding five years or to a fine or to both.
(8) For the purposes of this section -
(a) "appropriate officer" must be construed in accordance with section 378;
(b) "proper person" must be construed in accordance with section 412;
(c) Schedule 9 has effect for determining what is a business in the regulated sector.
Appropriate Consent, Protected and Authorised Disclosures, Form and Manner of Disclosures
Section 335 makes provision in relation to "appropriate consent" for the doing of a prohibited act where there has been an authorised disclosure. Where "appropriate consent" to an otherwise prohibited act is to be given by a "nominated officer" (see ss.338(5), 336(11), and 340(12)), section 336 provides that he may not consent unless he has authorisation from the Serious Organised Crime Agency (SOCA) or he does not receive a notice granting or denying such authorisation within certain time limits. Section 336(5) makes it an offence for a nominated officer to give consent except as outlined above where he knows or suspects that the act is a prohibited act.
Sections 337 to 339 provide for protected disclosures, authorised disclosures and the form and manner of disclosures. Section 337 protects a person making a disclosure who would otherwise be in breach of a restriction on the disclosure of information by virtue of his trade, profession, business or employment.
Section 338 sets out the circumstances in which a disclosure will be authorised for the purposes of the limitations on the principal money laundering offences in sections 327(2)(a), 328(2)(a) and 329(2)(a).
Section 339 provides for the Secretary of State to make an order prescribing the form and manner in which a disclosure must be made under section 330, 331, 332 or 338.
Proceeds of Crime Act 2002, s.336
Nominated officer: consent
Section 336 provides that a nominated officer (see s.336(11)) must not give appropriate consent unless he has authorisation from the Serious Organised Crime Agency (SOCA) or the time limits specified in subsections (7) and (8) have expired. Section 336(5) makes it an offence for a nominated officer to consent to an otherwise prohibited act except as outlined above; but he does not commit an offence unless he knows or suspects that the act is a prohibited act (i.e. one falling within section 327(1), 328(1) or 329(1)).
Proceeds of Crime Act 2002, s.337
Protected disclosures
Section 337 exempts a person who receives information in the course of his trade, profession, business or employment from any legal or other obligations that would otherwise prevent him from making disclosures to the authorities. The protection extends not just to the regulated sector which is required to make disclosures in order to avoid committing an offence under section 330, but also to those carrying out any trade, profession, business or employment, even if this is not in the regulated sector, who voluntarily make disclosures about money laundering to the police. This includes those exercising a profession in a voluntary capacity such as accountants or solicitors giving free advice.
Proceeds of Crime Act 2002, s.338
Authorised disclosures
Section 338 sets out the circumstances in which a disclosure will be "authorised" for the purposes of the limitations on the the principal money laundering offences in sections 327 to 329. Where a disclosure is "authorised" for these purposes, then it is not to be taken to breach any rule which would otherwise restrict that disclosure (s.338(4)). This is necessary because, in the course of their business, those working inside or outside the regulated sector may need to complete a transaction that they know or suspect could constitute one of the three principal money laundering offences.
Proceeds of Crime Act 2002, ss.339, 339ZA
339. Form and manner of disclosures
By virtue of subsection (4) any information supplied under subsection (2) is given immunity from any restriction on the disclosure of information such as confidentiality clauses in contracts and the law of confidence. It is important to note that no offence is committed if the person making the disclosure does not supply the requested information referred to in subsection (2).
339ZA. Disclosures to SOCA
Where a disclosure is made under this Part to a constable or an officer of Revenue and Customs, the constable or officer of Revenue and Customs must disclose it in full to a person authorised for the purposes of this Part by the Director General of the Serious Organised Crime Agency as soon as practicable after it has been made.
[This section was inserted by S.I. 2007 No. 3398 ]
Proceeds of Crime Act 2002 Section 340
Interpretation
(1) This section applies for the purposes of this Part.
(2) Criminal conduct is conduct which -
(a) constitutes an offence in any part of the United Kingdom, or
(b) would constitute an offence in any part of the United Kingdom if it occurred there.
(3) Property is criminal property if -
(a) it constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and
(b) the alleged offender knows or suspects that it constitutes or represents such a benefit.
(4) It is immaterial -
(a) who carried out the conduct;
(b) who benefited from it;
(c) whether the conduct occurred before or after the passing of this Act.
(5) A person benefits from conduct if he obtains property as a result of or in connection with the conduct.
(6) If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the value of the pecuniary advantage.
(7) References to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained in both that connection and some other.
(8) If a person benefits from conduct his benefit is the property obtained as a result of or in connection with the conduct.
(9) Property is all property wherever situated and includes -
(a) money;
(b) all forms of property, real or personal, heritable or moveable;
(c) things in action and other intangible or incorporeal property.
(10) The following rules apply in relation to property -
(a) property is obtained by a person if he obtains an interest in it;
(b) references to an interest, in relation to land in England and Wales or Northern Ireland, are to any legal estate or equitable interest or power;
(c) references to an interest, in relation to land in Scotland, are to any estate, interest, servitude or other heritable right in or over land, including a heritable security;
(d) references to an interest, in relation to property other than land, include references to a right (including a right to possession).
(11) Money laundering is an act which -
(a) constitutes an offence under section 327, 328 or 329,
(b) constitutes an attempt, conspiracy or incitement to commit an offence specified in paragraph (a),
(c) constitutes aiding, abetting, counselling or procuring the commission of an offence specified in paragraph (a), or
(d) would constitute an offence specified in paragraph (a), (b) or (c) if done in the United Kingdom.
(12) For the purposes of a disclosure to a nominated officer -
(a) references to a person's employer include any body, association or organisation (including a voluntary organisation) in connection with whose activities the person exercises a function (whether or not for gain or reward), and
(b) references to employment must be construed accordingly.
(13) References to a constable include references to a person authorised for the purposes of this Part by the Director General of SOCA.
(14) "Deposit-taking body" means -
(a) a business which engages in the activity of accepting deposits, or
(b) the National Savings Bank.
Subsection (12) ensures that where Part 7 permits disclosure to a nominated officer, (under sections 330, 337 and 338) not only employees, but people exercising functions in relation to an organisation who are not technically employees, will also be able to disclose to a nominated officer, if the organisation has one. Directors, partners and volunteers, for example, will be able to make a report to a nominated officer. The liability for reporting to the Serious Organised Crime Agency or a constable, if appropriate, then falls on the nominated officer by virtue of sections 331 and 332.
As to the need to prove, on a prosecution under section 327, 328 or 329 that the property in question derives from criminal conduct, see ante,
In R. v. Gabriel (Janis)[2007] 1 W.L.R. 2272, CA, it was held that where a person in receipt of state benefits failed to declare income from legitimate trade in goods to the Revenue and Customs and the Department of Work and Pensions, his profits from the trade itself could not be said to constitute criminal property within the meaning of section 340, so as to make him guilty of possessing criminal property contrary to section 329(1)(c) of the Act the failure to declare profits for the purposes of income tax may give rise to an offence, but that did not make the legitimate trading in goods an offence in itself (although state benefits obtained on the basis of a false declaration or a failure to disclose a change in circumstances may amount to obtaining a pecuniary advantage within section 340(6)). The court advised that where the prosecution allege that property is criminal property, it is sensible, by giving particulars either in advance or in opening, to set out the facts upon which they rely and the inferences which the jury will be invited to draw, and thus to define the ambit of their case.
R. v. Gabriel (Janis) ([2006] EWCA Crim 229) was considered in R. v. K[2007] 2 Cr.App.R. 10, CA, in which it was held that where a person cheats the revenue by under-declaring the takings of a legitimate trade, he obtains a pecuniary advantage in the form of the tax avoided, and, by virtue of section 340(6), he is to be taken to have obtained, as a result of or in connection with his offence, a sum of money equal to the value of the pecuniary advantage; and it further followed from section 340(5) that he "benefited" from his conduct, and the value of his benefit was the value of the sum of money he was treated as having obtained. The court added that where a person with a legitimate business had engaged in such a cheat of the revenue and was found in possession of a large quantity of cash, it would have been open to the jury to infer that the cash represented the undeclared takings and (within section 340(3)(a)) represented the offender's "benefit" in part; and, if it did so, it would then be "criminal property", and thus could itself be the subject of one of the money laundering offences created by sections 327 to 329.
In Crown Prosecution Service (Nottinghamshire) v. Rose;R. v. Whitwam[2008] 2 Cr.App.R. 15, CA, it was held that stolen goods in the hands of a thief or a receiver are "criminal property" for the purposes of the offence of acquiring criminal property, contrary to section 329(1)(a) since the offender obtains a right to possession of them in accordance with section 340(10)(a) and (d). The court further considered that whilst it was difficult to see why conduct which had the hallmarks of ordinary burglary/theft or handling stolen goods merited the charging of a money laundering offence, rather than appropriate charges under the Theft Act 1968, there was nothing wrong with the tenor of guidance given to crown prosecutors, nor did statistics show that section 329 was being used inappropriately by prosecutors. As to whether this decision will need to be reconsidered in light of the decisions of the House of Lords in R. v. May (Raymond George) ([2008] UKHL 28) and Jennings v. Crown Prosecution Service ([2008] UKHL 29.
Proceeds of Crime Act 2002, s.334
Penalties and sentences
(1) A person guilty of an offence under section 327, 328 or 329 is liable -
(a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both, or
(b) on conviction on indictment, to imprisonment for a term not exceeding 14 years or to a fine or to both.
(2) A person guilty of an offence under section 330, 331 or 332 is liable -
(a) on summary conviction, to imprisonment for a term not exceeding six [12] months or to a fine not exceeding the statutory maximum or to both, or
(b) on conviction on indictment, to imprisonment for a term not exceeding five years or to a fine or to both.
(3) A person guilty of an offence under section 339(1A) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.
The argument that the sentence for money laundering offences should be linked to the maximum sentence for the antecedent offence (for example, fraudulent evasion of duty by smuggling) or set by reference to the guidelines for "bootlegging" cases has not found favour with the Court of Appeal, particularly in cases of conspiracy over a long period of time.
There should nevertheless be an element of proportionality: see R. v. Everson (Louis) (Appeals against Sentence)[2002] 1 Cr.App.R.(S.) 132; and R. v. Basra (Ajaib Singh)[2002] 2 Cr.App.R.(S.) 100. See also R. v. Sarmiento (Danielle)[2003] 2 Cr.App.R.(S.) 9, CA (observations along the lines that those who launder money are nearly as bad as those who commit the antecedent offences not apposite where the launderer has no knowledge of the antecedent offence);
R. v. El-Delbi (Zakaria Ramadan)(2003) 147 S.J. 784, CA (there should be no direct arithmetical relationship between the sums shown to be involved and the length of sentence, but nonetheless sentences close to the maximum have to be reserved for cases where the evidence establishes laundering on a large scale)
R. v. Monfries (Karen)[2004] 2 Cr.App.R.(S.) 3, CA (regard should be had to nature of antecedent offence, the extent of the offender's knowledge of it, and the amount laundered); Att.-Gen.'s Reference (No. 48 of 2006) (R. v. Farrow)[2007] 1 Cr.App.R.(S.) 90, CA (mathematical calculations based on the amount laundered in different cases are inappropriate); and R. v. Greaves (Claude Clifford)[2010] Crim.L.R. 650, CA (where offender responsible for the primary offence is also guilty of money laundering, there should only be an additional penalty if the conduct involved in the money laundering offence adds to his overall "culpability"; in appropriate cases, the penalty for the money laundering offence may take the total penalty above the maximum for the primary offence, or it may even itself exceed that maximum).
In R. v. Griffiths (Philip)[2007] 1 Cr.App.R.(S.) 95, CA, it was said: (i) as to offences of entering into a money laundering arrangement (s.328, ante 26-12) and acquiring criminal property (s.329, ante, 26-13), being the organiser of the offence is always particularly serious (especially if an operation is set up) and custodial sentences will be inevitable in almost every case (if not every case); but a one-off attempt to conceal the assets of a person subject to confiscation proceedings does not fall within the same bracket as other forms of money laundering (considering R. v. Sarmiento (Danielle) ([2002] EWCA Crim 2685) (ante ), and R. v. Yoonus (Naushad) ([2004] EWCA Crim 1734) (post ); and reducing from 36 to 27 months the sentence imposed on conviction of an estate agent who had approached a convicted drug dealer and purchased his home at an under market value); (ii) as to offences of failing to disclose a suspicion or knowledge of money laundering committed by a solicitor (s.330 where the offence is no more than the product of a lapse of the high standards to be expected of a solicitor, rather than a desire to benefit from a money laundering offence, any penalty will be significantly enhanced because of the professional repercussions he will face (considering R. v. Duff (Jonathan Michael)[2003] 1 Cr.App.R.(S.) 88, CA; and reducing from 15 to six months a term of imprisonment imposed on a solicitor on conviction who had carried out the conveyance of a house at an undervalue).
For a case involving a person who, under the cover of a legitimate bureau de change, was prepared to launder substantial sums, which were not the proceeds of major crime, and from which he himself had limited financial benefit, see R. v. Yoonus (Naushad)[2005] 1 Cr.App.R.(S.) 46, CA.
Proceeds of Crime Act 2002, ss.451, 452
Revenue and Customs prosecutions
(1) Proceedings for a specified offence may be started by the Director of Revenue and Customs Prosecutions or by order of the Commissioners for Her Majesty's Revenue and Customs (the Commissioners).
(2) Where proceedings under subsection (1) are instituted by the Commissioners, the proceedings must be brought in the name of an officer of Revenue and Customs.
(4) If the Commissioners investigate, or propose to investigate, any matter to help them to decide -
(a) whether there are grounds for believing that a specified offence has been committed, or
(b) whether a person is to be prosecuted for such an offence,
the matter must be treated as an assigned matter within the meaning of the Customs and Excise Management Act 1979.
(5) This section -
(a) does not prevent any person (including an officer of Revenue and Customs) who has power to arrest, detain or prosecute a person for a specified offence from doing so;
(b) does not prevent a court from dealing with a person brought before it following his arrest by an officer of Revenue and Customs for a specified offence, even if the proceedings were not started by an order under subsection (1).
(6) The following are specified offences -
(a) an offence under Part 7;
(b) an offence under section 342 (text);
(c) an attempt, conspiracy or incitement to commit an offence specified in paragraph (a) or (b);
(d) aiding, abetting, counselling or procuring the commission of an offence specified in paragraph (a) or (b).
(7) This section does not apply to proceedings on indictment in Scotland.
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