Concealing etc the proceeds of crime: Under s 327 to conceal, disguise, convert, transfer or remove criminal property from the jurisdiction is an offence. This includes to concealing etc its nature, source, location, disposition, movement, ownership or any rights in relation to it. S 38 provides defences. It says that it is not an offence if the person concerned has made a protected disclosure, usually to the National Criminal Intelligence Service, and has been given consent to continue to act. S 340 (3) defines 'Criminal property' as being someone's benefit from criminal conduct where the alleged offender knows or suspects that it represents such benefit.
Arrangements: Under s 328 it is an offence to enter into or become concerned in an arrangement which that person knows, or suspects, facilitates the retention, use or control or criminal property. Available defences are as same as mentioned in the last paragraph. Acquisition use and possession: Under s 329 it is an offence for someone to acquire, use or have possession of criminal property. Here, defences of provided by s327 is applicable.
Failure to disclose: As per s.330 it is an offence if someone knows or suspects (or reasonable grounds for so doing) that someone else is engaged in money laundering where the knowledge or suspicion came into that person's possession in the course of their business in the in the regulated sector. That person must have failed to make a report as soon as it was practicable after they got the information concerned. There are some defences as such, if a person has a reasonable excuse for not making a report or that they are a professional legal advisor and the information came to them in privilege circumstances, and it was not so communicated for a criminal purpose. There is another defence that would apply where the person concerned had not been provided with money laundering training by their employer and that they had not suspected.
Failure to report: Under s 331 it is an offence where a money laundering reporting officer who receives a report that gives them grounds to know or suspect that laundering is taking place does not then make a report to the National Criminal Intelligence Service. A defence is also available here that is if the person has a reasonable excuse (but unfortunately there is no guidance on what a 'reasonable excuse' amounts to) for not making the report. S 332 applies for the same offence and defence but to the nominated officers outside the 'regulated sector'. Sch 9 defines it and covers virtually all financial services business.
Tipping off: Under s 333 it is an offence where someone knows or suspects that a report to the National Criminal Intelligence Service or other appropriate person along the lines set out above has been made and the person then makes a disclosure which is likely to prejudice an investigation which might follow. But, there are few defences as well; firstly, if the person who has done this did not know or suspect that the disclosure was likely to be prejudicial. Secondly, where the disclosure is made in carrying out a function that person has relating to the enforcement of the proceeds of Crime Act 2002 or a similar statute. Finally, it is a defence where the person who has tipped off is a professional legal adviser and the disclosure was to a client of the adviser in connection with giving legal advice or to anyone in connection with legal proceedings.
Penalties: Person who is convicted under sections 327 – 329 is liable on summary conviction to up to six months in prison and /or a fine but on indictment the penalty rises up to fourteen years. On the other hand a conviction under sections 330 – 333 is also liable for up to six months in prison and / or a fine on summary conviction but this rises to five years and/or a fine. Terrorism Act 2000 creates a series of criminal offences relating to handling terrorist money. This is most relevant to those who are involved in the banking and financial services industries. Criminal offences are:
To receive money or property with the intention tat it be used, or where there is reasonable cause to believe it will be used for the purpose of terrorism To become concerned in an arrangement which facilitates the retention or control of terrorist property by or on behalf of another whether this be done by concealment, removal from the jurisdiction, transfer to nominees or in any other way.
To fail to report to the police (in practice NCIS) as soon as is reasonably practicable a suspicion that someone has committed a financial offence in relation to laundering where this information has come into their possession as part of their trade, profession, business or employment. They must also report the information on which their suspicion is based. There is a defence of having a 'reasonable excuse' for not making the disclosure. Information obtained by a professional legal advisor is exempt if it is obtained in privileged circumstance.
To disclose information to another which is likely to prejudice an investigation or interfere with material which is relevant to such an investigation where there are reasonable grounds to suppose that the police are conducting, or proposing to conduct a terrorist investigation. As penalty, there is fine or up to six months imprisonment on summary conviction and a fine or up to fourteen years imprisonment on indictment.
Anti-terrorism, Crime and Security Act 2000 provides a new disclosure requirement that is a firm must disclose to the Treasury of any knowledge or suspicion7 that a customer is in one of the categories of proscribed organisations. However, everyone is not bound by the requirement to report suspicious transactions. "Essentially those who are caught are those carrying on "relevant financial business." This covers: Deposit taking business, carried on by a person who is for the time being authorised under the Banking Act 1987; Acceptance by a building society of deposits made by any person (including the raising of money from members of the society by issue of shares); Business of the National Savings Bank; Business carried on by a credit union within the meaning of the Credit Unions Act 1979 or the Credit Unions (Northern Ireland) order 1985.
any home regulated activity carried on by a European institution in respect of which the requirements of paragraph 1 of Schedule 2 to the banking Co-ordination (Second Council Directive) Regulations 1992 have been complied with; Investment business within the meaning of the Financial Service Act 1986; Any activity carried on for the purpose of raising money, authorised to be raised under the National Loans Act 1968, under the auspices of the Director of National Savings; Any of the activities in points 1 to 12, or 14 of the Annex to the Second Banking Directive… and Insurance business carried on by a person who has received official authorisation under Article 6 or 27 of the First Directive."
Under reg. 4(2), specifically excluded from being "relevant financial business" are: The issue of withdraw able share capital within the limit set by s6 of the Industrial and Provident Societies Act 1986 if within the limits set by ss6 and 7(3) respectively; The issue of withdraw able share capital within the limit set by s6 of the Industrial and provident Societies Act (Northern Ireland) 1969 by a society registered under that Act; Activity carried on by the Bank of England; However, The Money Laundering Regulations 2003 replace the Money Laundering Regulations 1993 and 2001 with updated provisions which reflect Directive 2001/97/EC of the European Parliament and of the Council amending Council Directive 91/308/EEC on prevention of the use of financial systems for the purpose of money laundering.
Where business relationships are formed, or one-off transactions are carried out, in the course of relevant business (defined in regulation 2), the guys carrying out such relevant business are required to maintain certain identification procedures (regulation 4), record-keeping procedures (regulation 6) and internal reporting procedures (regulation 7) and to establish other appropriate procedures for the purpose of heading off or stopping money laundering (regulation 3(1)(b)). They are also required to train their employees in those procedures and, more generally, in being able to notice money laundering transactions and the law relating to money laundering (regulation 3(1) (c)). A person doesn't follow the procedures or carry out the training is guilty of a criminal offence (regulation 3(2)).
Regulation 8 provides that casino8 operators must obtain decent evidence of the identity of all people using their gaming facilities. On the other hand Regulation 9 requires the Commissioners of Customs and Excise to keep a register of money service operators and a register of high value dealers and regulations 10-11 state the registration requirements placed on such persons. Regulation 12 lists the grounds on which registration may be refused by the Commissioners, including where information which has been supplied is incomplete, false or misleading. Regulation 13 lists the circumstances in which registration may be cancelled by the Commissioners. Regulation 14 allows the Commissioners to charge fees.
Regulations 15 to 19 state the powers of the Commissioners in relation to money service operators and high value dealers, including a power to enter and inspect premises. Where there are reasonable grounds for believing that an offence under the Regulations is being, has been or is about to be committed by a money service operator or high value dealer, the Commissioners may seek a court order requiring any person in possession of certain information to allow them access to it.
Regulation 19 allows the Commissioners to enter premises with a warrant, to search persons and to take away documents. Regulation 20 allows the Commissioners to impose a civil penalty in certain circumstances. Regulation 21 provides a mechanism for a formal review by the Commissioners of their decisions. Regulation 22 provides for appeals against the Commissioners' decisions to be heard by a VAT tribunal. Regulation 23 allows the Commissioners to prosecute offences under the Regulations.
Regulation 24 allows fees and penalties to be recovered as a civil debt. Regulation 25 requires people who are authorised by the Financial Services Authority ("the FSA") to inform the FSA before they operate bureaux de change. The Regulations make solicitors/other professionals obtain sufficient knowledge of new clients, to ensure record keeping of transactions, to have in place procedures in the partnership to report money laundering and to educate and train staff to know potential money laundering activities by clients and potential clients when they see it.