Money Laundering Flashcards
Chapter 6
What is the main purpose of the Proceeds of Crime Act 2002 (POCA)?
It is part of the UK’s response to international efforts against money laundering. It criminalises money laundering and also creates offences for legitimate businesses, like solicitors, who fail to respond appropriately to money laundering.
What is ‘criminal property’ under POCA 2002?
‘Criminal property’ is a person’s direct or indirect benefit from criminal conduct, including the stolen property itself and any profits made from the original crime. The person must know or suspect that the property represents a benefit from criminal conduct.
What is the offence under Section 328 of POCA 2002?
It is an offence to enter into or become concerned in an arrangement which you know or suspect facilitates the acquisition, retention, use or control of criminal property. This includes actions by solicitors that assist in money laundering.
What does “know or suspect” mean in the context of POCA 2002?
It means that the individual thinks there is a possibility, which is more than fanciful, that the relevant facts exist. A vague feeling of unease is not enough.
What is the ‘authorised disclosure’ defence for offences under sections 327, 328 and 329 of POCA?
A disclosure is authorised if made to a constable, an officer of His Majesty’s Revenue and Customs, or a nominated officer. For solicitors, it’s usually the firm’s nominated officer, who will then report to the National Crime Agency (NCA).
What are the conditions for an authorized disclosure to be a defence if made before the prohibited act?
The disclosure must be made to the firm’s nominated officer as soon as practically possible prior to the transaction taking place, and the consent of the nominated officer or the NCA must be obtained.
What is the offence under Section 329 of POCA 2002?
It is an offence to acquire, use, or have possession of criminal property. This can apply to solicitors who receive money for costs that are potentially criminal property. There is a defence if adequate consideration has been given.
What is the offence under Section 327 of POCA 2002?
It is an offence to conceal, disguise, convert, or transfer criminal property or remove it from the jurisdiction of England and Wales. Solicitors can fall foul of this because many transactions involve converting or transferring assets.
What is the offence under Section 330 of POCA 2002?
It is an offence to fail to disclose information about money laundering to the appropriate authorities. This applies to those in the regulated sector, which includes most solicitors. There is an objective test (should have known or suspected), and the information must be useful to authorities.
What is the ‘tipping off’ offence under Section 333A of POCA 2002?
It is an offence to disclose that a money laundering disclosure has been made or that an investigation is underway, if that disclosure is likely to prejudice the investigation. There is no need to prove the intention to prejudice the investigation.
What is the role of the Solicitors Regulation Authority (SRA) in relation to money laundering?
The SRA has a supervisory and regulatory role. It expects solicitors to comply with all money laundering legislation, spot warning signs, and report suspicions appropriately. Failure to comply can lead to disciplinary proceedings and sanctions.
Give examples of ‘warning signs’ for money laundering.
○ Client: Secretive, evasive, refuses information
○ Funding: Unusual cash payments, third-party payments
○ Transaction: Loss-making, unexplained urgency, no commercial purpose
○ Instructions: Outside solicitor’s expertise, unusual for the firm
○ Geographical: Movement of money between jurisdictions, connections with suspect jurisdictions
What is the offence under Section 331 of POCA 2002?
It is an offence for a nominated officer to fail to disclose information about money laundering to the NCA if they know or suspect it as a consequence of their role.
What is the offence under Section 342 of POCA 2002?
It is an offence to make a disclosure that is likely to prejudice an investigation or interfere with relevant material if one knows or suspects a money laundering investigation has or is about to be commenced.
