Under sections 327-329 of POCA, it is a money laundering offence to deal, in any of three broad ways, with a person’s benefit from criminal conduct, knowing or suspecting that it is such a benefit. Breaking this down, there are essentially four elements to the money laundering offences. For an offence to be committed there must be:
1. criminal conduct giving rise to criminal property;
2. property that is objectively criminal property, that is to say it constitutes or represents the benefit from criminal conduct;
3. property that is subjectively criminal property, that is to say the defendant knows or suspects that it is such property; and
4. some form of dealing with the property in one of the three broad ways prohibited by POCA, namely (i) concealing, disguising, converting, or transferring criminal property (s. 327); (ii) entering into or becoming concerned in an arrangement which facilitates the retention, use or control of criminal property by another (s. 328); or (iii) acquiring, using or possessing criminal property (s. 329).
“Criminal conduct” is conduct which: (a) constitutes an offence in any part of the UK; or (b) would constitute an offence in any part of the UK if it occurred there. Where the criminal conduct in question occurred outside the UK, the crime must be a ‘serious crime’, which would carry a maximum custodial sentence of at least one year if it had occurred in the UK. “Criminal property” is any property which constitutes or represents the benefit from “criminal conduct” where the defendant subjectively knows or suspects that it constitutes or represents such benefit.
In the first instance, it will be individuals with the relevant suspicion who will commit an offence under these sections. A corporate will only be liable for an offence where the “directing mind and will” of the corporate was involved. For example, if the board of directors permitted the company to receive a dividend payment from a subsidiary, knowing or suspecting that the dividend represented profit made on contracts which had been improperly obtained. This sort of situation is particularly relevant in the context of considering the impact of bribery overseas by foreign subsidiaries of a UK parent.
However, a person will have a complete defence where they make a disclosure to the NCA for consent in advance of the offence occurring and they do not receive notice refusing consent to proceed with the activity. This disclosure is made in the form of a suspicious activity report (SAR), which is a standard online form available through the NCA’s website. See our page on Suspicious Activity Reports for further information.
Unlike businesses operating in the regulated sector, non-regulated entities are not required to appoint a nominated officer to receive internal reports of suspected money laundering. The value of having such a nominated officer is that employees of the business can protect themselves against the general money laundering offences referred to above by reporting their suspicions to the nominated officer, rather than having to report them direct to the NCA. Where a nominated officer is appointed voluntarily, that nominated officer has a legal duty to consider and deal appropriately with disclosures made to him by others in the company. If he receives a report which causes him to know or suspect that money laundering is taking place and he can identify the offender or the whereabouts of laundered property (or he believes or it is reasonable to expect him to believe that the information will or may assist in identifying the offender/laundered property), it is an offence for him not to disclose that information as soon as practicable after receiving it. The maximum penalty for this offence is five year’s imprisonment and/or an unlimited fine for the nominated officer.