What is Money Laundering?

The UK law regarding money laundering are mainly set out under Part 7 of the Proceeds of Crime Act 2002 (also referred to as POCA). Typically money laundering involves an offender benefiting from criminal activity and the benefit, money or otherwise, is exchanged for ‘clean’ money or any assets which would not be directly linked to criminal activity.

The Proceeds of Crime Act 2002

There are three main offences under POCA: Section 327 POCA: Concealing/ disguising/ converting/ transferring/ removing criminal property from England & Wales Concealing or disguising property will include disguising the location, source, disposition or any movement or rights relating to it. Section 328 POCA: Entering into arrangements concerning criminal property A person may be liable if they are concerned with an arrangement which they know or suspect the acquisition, use or control of criminal property by or on behalf of another. Section 329 POCA: Acquisition, use and possession of criminal property This relates to a person having or being in control of criminal property. Importantly, criminal property is defined as property which constitutes or represents a persons benefit from criminal conduct or the offender knows or suspects it is a benefit from criminal conduct. This can include money, all forms of property, including houses or real estate. There is no minimum value relating to these offences. The definition can also extend to things in actions or other intangible property. Criminal conduct can be any offence committed in any part of the UK or even conduct which would be a criminal offence if committed in the UK. A defendant will not be liable for the offences under Part 7 POCA if they either make an authorised disclosure (as per section 338 POCA)or intended to make a disclosure but had a reasonable excuse for failing to do so. This can involve the defendant making a disclosure to the Nation Crime Agency and appropriate consent has been given via an Suspicious Activity Report (SAR) or a Defence Against Money Laundering (DAML) SAR. This may be where a person suspects the property they are dealing with may be linked to criminal activity and dealing with the property may risk breaching one of the POCA offences. Therefore if someone has received appropriate consent in the form of a DAML to deal with the property, they will not be liable. Money laundering offences may be included on the same indictment as the criminal offences which gave rise to the alleged benefit. In cases where money laundering offences are stand alone in the indictment,  The Crown Prosecution must prove that the offending behaviour led to the offender benefitting from the criminal property or that there is an “irresistible inference” that the property was gained from the offending behaviour. The offences under sections 327-329 POCA are triable either way offences. This means they may be dealt with either by the Magistrates Court or the Crown Court depending on the specific facts of the case.

Sentencing guidelines

The sentencing guidelines for these offences can range from a fine or community order up to 13 years imprisonment. Sentencing will depend on the culpability of the offender and the amount of money proven to be laundered. An offender may be sentenced more severely depending on their role in the activity, for example if they were of a leading role in a group offending. They may be considered of high culpability if the offender had involved others through pressure or influence, especially if there is an abuse of position, power, trust or responsibility. The sophistication, level of planning or the length of time of the offending may also be relevant. Offenders considered to be of lesser culpability may have committed the offences as a ‘one of’ offence or involved very little planning or a limited awareness or understanding of the extent of the criminal behaviour they have been linked to. There are other legislations which seek to prevent money laundering in the UK and many Regulatory offences regarding businesses or companies. These include:

• The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (Money Laundering Regulations 2017) a
• The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (Money Laundering Regulations 2019)