Money Laundering Flashcards
What 3 defences are available for acquisition, use, possession offence under POCA?
- Authorised disclosure
- Legal professional privilege
- Adequate consideration - As long as there is no suspicion that money is proceeds of crime.
What are the three stages of money laundering?
Define each.
1. PLACEMENT: Money injected into the financial system, e.g. depositing into bank account.
2. LAYERING: Process of obscuring origins by passing assets through complex transactions, usually involves multiple jurisdictions.
3. INTEGRATION: Invest funds into legitimate businesses, e.g. buying property/businesses.
What 2 defences are available for concealing and arranging under POCA?
- Authorised disclosure - Defence if reported to police, customs or nominated officer. NB relevant WHEN disclosure made - before, during (only if ASAP, on own initiative, and no knowledge/suspicion of when it started) or after (w good reason why not disclosed before)
- Privilege - If legal prof privilege applies then no duty to disclose EXCEPT (1) if Sol knows transaction amounts to money laundering offence OR (2) if Sol suspects AND suspicion is correct, comms no longer privileged.
What are the relevant 3 direct offences under POCA? Define each.
What is the requisite mental state for the direct offences?
- CONCEALING - conceal, disguise, convert or transfer criminal property or remove criminal property from the UK
- ARRANGING - Facilitating in the acquisition, retention, use or control of criminal property - NOT litigation, issuing proceedings, settlements, negotiations.
- USE, ACQUISITION, POSSESSION - What is says on the tin!
MENTAL STATE: Subjective - Actual knowledge or suspicion
What is sham litigation and why is it relevant under POCA?
Sham litigation is created for the purpose of money laundering.
Offence of arranging can arise upon execution of the judgment or completion of the settlement
What is Criminal Property under POCA?
- Money
- Real property
- Personal property
- intangible property
What is the mental state for indirect offences under POCA?
Objective test: should have known or been suspicious in the circs.
What is the offence of failure to report under POCA?
Indirect offence
Failure to make a suspicious activity report when knew or ought to have known/been suspicious of ML.
What defences are available for the offence failure to report under POCA
- Privilege applies if Sol has come to info in privileged circs: (1) re legal advice, (2) legal proceedings/contemplated legal proceedings.
- Lack fo training - If no training received BUT partners may be prosecuted.
What is the offence of Tipping Off?
Disclosure that (1) SAR has been made or (2) that investigation is ongoing
What are the 2 exceptions to the offence of tipping off under POCA?
- Normal enquiries regarding client’s instructions and retainer;
- Listing obligations under ML legislation in Terms of Engagement.
What 4 defences are available for the offence of tipping off under POCA?
- IF disclosure made to colleague/other legal prof WITHIN undertaking or group
- IF disclosure between institutions if relates to (former) client for both, for purpose of preventing ML, and equivalent prof duties
- IF disclosing to supervisory body
- IF disclosing to client to dissuade them from engaging in the conduct
What are the three indirect offences under POCA? What is the required mental state?
- Failure to Report
- Tipping off
- Prejudicing an investigation
MENTAL - Objective - knew, ought to have known, suspicious, ought to have been suspicious
What is the offence of prejudicing an investigation?
Know or suspect that a money laundering investigating is underway AND EITHER
disclose this to a person likely to prejudice invest.
OR
falsify/conceal/destroy docs
What two defences are available to the offence of prejudicing an investigation?
- Where the person did not know or suspect - NB this is confusing because it is part the element that must be met to establish the offence.
- Disclosure made in connection with legal proceedings - classic ex - Sol reveals to client that neg of previous sol to do with investigtion.