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Money laundering: what counts and the defences
Money laundering is dealing in any way with property you know or suspect comes from crime: hiding, moving, arranging, acquiring, using or simply holding it (POCA 2002 ss.327 to 329). Suspicion is enough. The maximum sentence is 14 years.
The three main offences
- Concealing (Proceeds of Crime Act 2002 s.327): concealing, disguising, converting or transferring criminal property, or removing it from the jurisdiction.
- Arranging (s.328): becoming concerned in an arrangement you know or suspect helps someone else acquire, retain, use or control criminal property.
- Acquiring, using or possessing criminal property (s.329).
What is criminal property?
Property that is, or represents, a benefit from any crime, where the accused knows or suspects that it is (s.340). It covers cash, bank balances, crypto, cars and houses, and it does not matter who committed the original crime. The prosecution must prove the property came from crime, but you need only have suspected it, which means more than a vague feeling but less than belief.
Money mules
Letting money pass through your account for someone else, often for a cut, is commonly charged as money laundering. Being told it is a gift, a job or a favour is no defence if you suspected the truth. Banks also close mule accounts and record fraud markers.
Defences
- Authorised disclosure (s.338): reporting your suspicion to the National Crime Agency, or your firm's nominated officer, and getting consent (a DAML) before acting. Consent is treated as given if not refused within 7 working days; a refusal starts a 31 day moratorium that a court can extend by up to 186 days in total (ss.335, 336A).
- Reasonable excuse for not making an intended disclosure.
- Adequate consideration (s.329 only): you paid or gave fair value, such as a trader selling goods at a proper price. It fails if the value given is significantly less, or the goods or services help crime.
- Limited exemptions for conduct lawful abroad and for low-value transactions by banks and regulated firms.
Sentence
Up to 14 years and an unlimited fine (s.334). The Sentencing Council guideline looks at culpability and the amount involved.
Regulated sector
Banks, accountants, lawyers, estate agents and others commit an offence if they fail to report knowledge or suspicion, or reasonable grounds for it, arising in their business (ss.330 to 332, up to 5 years). Tipping off is a separate offence.
Confiscation
Conviction usually leads to confiscation proceedings. Offences under ss.327 and 328 are criminal lifestyle offences, so the court can assume assets obtained in the previous six years came from crime unless you prove otherwise. An unpaid order carries a prison term in default, and serving it does not cancel the debt.
Authorities: Proceeds of Crime Act 2002 ss.6, 10, 75, 327, 328, 329, 330-333A, 334, 335, 336A, 338, 339A, 340 and Sch.2; Sentencing Council Fraud, Bribery and Money Laundering guideline