Money
Laundering – The New Laws
“We know that profit is the main motive for many
criminals. They need to clean their ‘dirty’ cash before they can
gain from it. So, by cracking down on the crooked money
transfers, we remove their ability to spend their ill gotten
gains and take away the incentive to commit crime in the first
place”
- so said former home office minister Caroline Flint a few years
ago.
Money laundering is a massive problem worldwide with billions of
pounds of ‘dirty’ money being generated and then laundered each
year from criminal activity. This has led many governments since
the early 1990’s to introduce a wide range of laws and measures
to combat the problem. In 1991 the EU issued an important
directive to all EU states requiring them to put appropriate
laws in place. The most recent piece of legislation introduced
by the UK government which is due to be implemented by the 15th
December 2007 is the Money Laundering Regulations 2007. The
Regulations create offences which carry sentences of
imprisonment up to a maximum of 14 years. This is indicative of
the importance which the government places on punishing those
involved in money laundering and depriving criminals of the
proceeds of crime.
Solicitors are key professionals and play an important role in
the business and financial world. They facilitate a huge number
of business transactions that underpin the UK economy. As a
result the new Regulations place a heavy burden on solicitors
not to allow their services to be used to further a criminal
purpose. The most important change to be introduced by the
new Regulations is that solicitors will not only have to verify
the identity of their client but will also under the new
legislation be required to continuously monitor on an ongoing
basis their relationship with the client. The new Regulations
will also require solicitors to have evidence of identity of all
existing clients even those that have been on the books for many
years. Previously, solicitors were required to disclose any
suspicious activity reports (SAR’s) to the National Criminal
Intelligence Service. The New Regulations now require Solicitors
to report any suspicious financial transactions to the Serious
and Organised Crime Agency (“SOCA”), dubbed by many as the UK’s
own FBI.
What is Money Laundering?
Money laundering is the term used to cover all the various ways
in which criminals and their associates conceal, disguise,
convert or remove criminal property. The term can mean the
simple retention of proceeds of crime as well as more complex
laundering schemes. It is a method that criminals use to turn
‘dirty money’ into legitimate assets by laundering the ‘dirty
money’ through various channels so that it gains respectability
and is therefore ‘lost’ from the view of law enforcement
agencies.
The important point to note about the money laundering offences
is that they relate to ‘criminal property’.
‘Criminal Property’
‘Criminal property’ has been defined as anything that is or
represents a benefit from criminal conduct where the alleged
offender knows or suspects that it is such. So it’s very
wide-ranging.
The Main Money Laundering Offences
-
Concealing
This can be concealing the criminal property’s nature,
source, location, disposition, movements, ownership or any
rights connected with it and can include mixing criminal
property with non-criminal property. Again very
wide-ranging.
-
Arrangements
This is where a person becomes involved in an arrangement
which he knows or suspects to facilitate the acquisition,
retention or use or control of ‘criminal property’ by or on
behalf of another person.
-
Acquisition, use or possession
A person commits an offence if they acquire, use or possess
criminal property.
Secondary Money Laundering Offences
These broadly fall into two categories, the first is a failure
to disclose a suspicious transaction and the second is what is
known as “tipping off”.
-
Failure to Report
This requires Solicitors and other professionals operating
in the regulated sector to disclose any information about a
transaction, where they know or suspect or have reasonable
grounds for knowing or suspecting that it involves money
laundering. A failure to report suspicious activity is an
imprisonable offence.
-
Tipping off
This occurs where an alleged offender knows or suspects that
a money laundering disclosure has been made or if he knows
or suspects that a money laundering investigation is or will
be carried out. The person making the disclosure to the
investigating authority must not tell the alleged offender
or any other third party that a disclosure has been made or
that the authorities are or will be carrying out a money
laundering investigation, where the provision of that
information is likely to prejudice any investigation that is
likely to be carried out.
There are a number of defences to the above offences.
We Can Help
Allegations of money laundering are often incredibly lengthy and
complex and can be investigated by a number of prosecuting
authorities including SOCA, HMRC, SFO, FSA, OFT and the police.
The very nature of these types of investigations can have a
devastating impact on the individuals and businesses that are
suspected of such matters. It is therefore extremely important
to obtain specialist legal advice at an early stage. Public
funding may be available.
Here at Glaisyers, we have a specialist team and provide expert
advice of the highest quality to those suspected or charged with
offences of money laundering, proceeds of crime allegations, or
carousel and other VAT fraud. We will assemble a team and advise
you on your options, working out the best strategy to protect
your interests. We can also instruct relevant experts in any of
the different fields that can be necessary in these types of
cases; for example forensic accountants to progress your
defence.
We are founding members of the Serious Fraud Panel and the
Serious Fraud Association and are therefore one of the few firms
competent and able to conduct the provision of advice and
representation in this specialist area.
Neil Ross – Associate Partner
Glaisyers solicitors
10 Rowchester Court
Printing House Street
Birmingham
B4 6DZ
Tel: 0121 233 2971
Out of hours tel: 0121 236 1885
Email:
neilross@glaisyers.co.uk
