Effectiveness of Anti-money Laundering Legislative Provisions in the UK

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‘Money laundering is now regarded as a multinational phenomenon where extremely disciplined and well-funded organised criminals manipulate international anti-money laundering rules to disguise their proceeds of crime’.

In light of the above quote, critically consider the effectiveness of the United Kingdom’s anti-money laundering legislative provisions.

Introduction: Since the involvement of extremely disciplined and well-funded organised criminals, and dramatic development over a very long time, money laundering still remains one of the most influential features of organised crime, not only in UK but also all over the world. Money laundering process helps the legitimisation of illegal wealth, altering the perceived source and ownership of funds or property out of criminal conduct, therefore, creating a huge threat over a country’s economy. It is suggested by global estimation that after oil and agriculture, money laundering represents the third biggest global industry.[1] Due the threat and risk involved with the problem, like other counties, UK has adopted and created aggressive policy combating the offence.[2]

Though, the main focus of this discussion will be on UK’s anti-money laundering initiatives to tackle the problem, its history, the sectors where money is laundering, scale of it, UK’s implication of international measures, brief effect of Brexit, role of financial institutions and regulatory bodies will be discussed. Finally, we look at dirty money recovering process, SARs, prosecuting and sentencing system, and brief recent developments.

History of Money Laundering: History of money laundering can be traced back to Al Capone, who used laundromats to hide dirty money.[3] However, Myer Lansky, is considered as one of the founding fathers or the patron saint[4] of money laundering, took advantage of the Swiss Banking Act of 1934, used country’s financial institutions to hide the source of money.[5] However, the term was 1st used in a legal context through the case of US v $4,255,625.39.5.[6]

Definition: As money laundering involves the targeted exploitation of products and services, it is difficult to universally define and describe it.[7] However, money laundering is a process of disguising income from criminal activities.[8] It also includes converting dirty money into clean money by criminals like people traffickers, tax evaders, fraudsters, smugglers, terrorists, drug dealers, burglars, extortionists and illegal arms dealers; even surprisingly by lawyers, financial experts and accountants.[9] Moreover, Doug Hopton defined it as turning dirty money into clean money, disguising criminal money and washing drug money.[10]

Where It Occurs: Money laundering can occur anywhere in the world because it is the consequence of almost all profit generating crime, but countries or sectors where low risk of detection involve are most preferable.[11]

Reason of UK Market’s Being Attractive: The UK, deals with 41% of global foreign exchange trading and 17% of the total global value of international bank lending, has thus become attractive to money launderers.[12] Other things that also attracts are, the size of the UK’s financial and professional services sector, attractiveness of the London property market to overseas investors and open economy.[13]

Mechanisms of money laundering: In its early origins, organized criminals laundered their proceeds of crime through cash intensive businesses.[14] However, one of the popular mechanisms is alternative remittance systems, where not only the money of immigrant workers is being transferred but also drug money is laundered.[15] Moreover, money can be laundered through extortion, drug trafficking, arms smuggling, [16] and other mechanisms include cash couriers, money transmission system, shell corporations, cash-intensive businesses, high value property and assets transactions[17] IMF report has highlighted some of the methods or medium namely, cash/value couriering, cash-rich businesses, high-value assets and property, financial abuse through certain non-financial businesses and professions, money transmission agents, and front companies, which are concerned to law enforcement as being used for money laundering.[18]

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Before going to further discussion it is essential to know that the life-cycle of money laundering involves three stages namely, placement, layering and integration.[19] Placement involves direct or indirect placement of illegal funds into the financial system[20] where the money launderer normally use smurfing, or structured payments techniques – process of breaking up the profit into smaller amounts.[21] In the layering stage, money launderers move money throughout the global financial system, where money in entered multiple into intermediaries that can be banks and other financial institutions, to hide the audit trail and the original source.[22]  Finally, the money re-enters the legitimate economy using integration stage, appearing that it is the result of legitimate business.[23]  

Global Scale of Money Laundering: Though, it is quite difficult to determined accurately the monetary volume and seriousness of this crime,[24] rough estimation can give some sense of the scale of the problem.[25] It is estimated by IMF, UN and FATF that amount of money laundered globally per year is equivalent to 2 – 5% of global GDP,[26] or $800 billion to $2 trillion.[27]According to, the United Nations Office on Drugs and Crime (UNODC) report, in 2009, criminal proceeds amounted to 3.6% of global GDP, with 2.7% ($1.6 trillion) being laundered.[28] 

UK scale of money laundering:  In 2013, the Financial Services Authority (FSA) estimated that £23bn to £57bn is being laundered within and through the UK every year, which is equivalent to 1.4%-3.6% of the national real GDP for that year.[29] Moreover, about £10 billion per year is laundered through the regulated sector.[30] Applying the estimation of IMF, UN and FATF in UK, the amount of money laundered would be between GBP 36 billion and GBP 90 billion where the GDP is 1.8 trillion.[31]

Implementation of international measures: UK has implemented international money laundering measures from UN, EU and FATF. It signed UN’s Vienna Convention, in 1988 which was ratified in 1991,[32] was significant for fight against money laundering and allowed jurisdiction over the offence.[33] The Convention was used in relevant money laundering cases, for example, R v Montila,[34] R v Rezvi,[35] Crown Prosecution service v Richards,[36] R v Hussain.[37] Palermo Convention, UN’s convention, was signed by UK in 2000 and ratified in 2006,[38] establish money laundering as a distinct criminal offence within UK’s national law as a signatory.[39] Serious Organized Crime and Police Act 2005 has referred to it which proves its influence.[40]

The 1st AML that was implemented by UK from EU was the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime 1990,[41] ratified in 1992.[42] Its scope was broadened by Warsaw Convention which was implemented by UK in 2015.[43] Moreover, UK implemented 1st EU Money Laundering Directive in 1993 which was confined to credit and financial institutions as they were vulnerable for money laundering.[44] UK’s AML obligations was extended by the 2nd Money Laundering Directive and initiated by the Money Laundering Regulations 2003.[45] UK implemented 3rd  Money Laundering Directive through Money Laundering Regulations 2007.[46] The Fourth Money Laundering Directive was published in the EU Official Journal on 5 June 2015[47] and proposed some of the Key changes such as, reduction of the amount to 7500 euro for carrying out due diligence, enhanced clarity and accessibility of beneficial ownership information, risk based approach, simplified due diligence and extended due diligence for gambling sector.[48]  

Brexit: As Article 50 of the Treaty of Lisbon has triggered, UK government will continue to negotiate, implement and apply EU legislation, and the outcome of these will determine what arrangements apply in relation to EU legislation in future.[49]

POCA 2002: Part 7 of Proceeds of Crime Act 2002 (POCA 2002) describes the money laundering offences and requirements.[50]HM Treasury describes it as one of the most powerful tools against money laundering.[51]

There are three primary money laundering offences, namely,  a) disguising, converting,  concealing, transferring or removing criminal property from the jurisdiction (England and Wales, Scotland or Northern Ireland),[52] b) entering into or becoming concerned in an arrangement knowing or suspecting it to facilitate the acquisition, retention, use or control of criminal property by or on behalf of another person,[53] c) criminal property’s acquisition, use and possession.[54] Any person can commit these offences, though they work within the regulated sectors which include insurers, banks, credit institutions, lawyers, accountants etc. or undertake a relevant business such as, estate agents, casino operators, and insolvency practitioners.[55] Failure to disclosure by regulated sector,[56] other nominated officers in that sector,[57] other nominated officers,[58] tipping off ,[59] and prejudicing an investigation[60] are other offences created by POCA 2002.

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a) The 1st primary offence also involves concealing or disguising the source, nature, movement, location, disposition or ownership of the criminal property.[61] To be a criminal ‘property’[62], two elements are essential. Firstly, it is or represents a person’s benefit from criminal conduct (in whole or part and whether directly or indirectly).[63] Secondly, the alleged offender knows or suspects that it constitutes such a benefit.[64]

The definitions under s.340 are very wide which create some practical problems and difficulties.[65] Any activity in abroad would be an offence if it is considered an offence in UK, no matter if it is not considered as offence in that country. However, this problem was resolved by s. 102 of the Serious Organised Crime and Police act 2005 which creates defence under s 327 to 329 of POCA 2002. As the Act has no ‘de minimis’ provision, it catches all benefit regardless of how small or minor the crime.[66]

b) For the 2nd primary offence, to establish a conviction under s. 328 of POCA 2002, it must prove that a person became concerned in an arrangement which he knew or suspected would make it simpler for another person to acquire, retain, use or control criminal property, and he also knew or suspected that the criminal conduct was the reason of getting benefited from the property.[67] In order to prove a person guilty of the offence, the definition of criminal property, concept of knowledge and suspicion are of central importance. Though, the knowledge is straight forward idea, the meaning of suspicion is uncertain.[68] In R v DA Silva, Longmore LJ stated suspicion as beyond vague feeling of unease, but need not to be clear or firmly grounded and targeted on specific facts, or based upon reasonable grounds.[69] However, according to Lord Hope in R v Sail (Abdulrahman), proving actual suspicion which is a subjective test is not enough. The objective test must be satisfied – showing that there were reasonable grounds for it.[70] In Shah v HSBC[71] it was held that the burden is on the reporting institution (the defendant bank) to prove suspicion[72] and required to do so at trial when sued by the relevant customer.[73]

 After the decision of the case, Stanton said that to prove the existence of the suspicion, evidence needs to be produced, mere suspicion does not suffice.[74]

However, interpretation of some phrases of s. 328 creates problems.[75] In HC’s P v P, Dame Butler-Sloss stated that an authorized disclosure and consent from the National Criminal Intelligence Service is required for a solicitor where he suspects that his client will become involved in ‘an arrangement’.[76] Here the value of criminal property is immaterial.[77] However, in Bowman, CA reached the decision by interpreting the phase ‘being concerned in an arrangement’ and  held that s. 328 was not intended to cover or affect ordinary conduct of litigation.[78]

c) The final offence will be committed, if a person acquires, uses or has possession of criminal property.[79] It is necessary to prove, that the property is ‘criminal property’, and the defendant knows or suspects that the property is obtained from criminal conduct.[80]

Defences: If a person, makes an authorized disclosure via suspicious activity report,[81] has reasonable excuse for not making a disclosure,[82] does the action when undertaking a function which relates to the enforcement of a provision under POCA 2002,[83] then he does not commit a crime. There will be no offence if the value of the criminal property is less than £250.[84] Same defences s. 327 also exist for s. 328-29, but adequate consideration defence[85] is available for S. 329.

Terrorist financing: It is considered as money laundering. Terrorists, need money for training, materials and travel. Sometimes, for managing finance, they do human smuggling.[86] Though, the overall cost for terrorism may be very large, cost for particular attack can be relatively small. For example, US authorities have estimated the cost of September 11 attack in America under US$30,000. Bishopsgate attack has cost near £3000.[87]

Terrorism Act 2000: This Act is one of the primary legislation for money laundering in UK, but was amended by Anti-terrorism, Crime and Security Act 2001,[88] and deals with laundering of terrorist property[89].  Things that are defined as terrorist property are, a) money or property which is likely to be used for the purposes for terrorism,[90] b) proceeds of the commission of acts of terrorism,[91] and (c) proceeds of Acts carried out for the same purposes.[92] A person commits an offence if he, invites another,[93] receives,[94] and provides[95] money or property, and knows or has reasonable cause to suspect that it will or may be used for the purposes of terrorism.[96] Use and possession of money and property for the same purposes also creates offence under this Act.[97] It is also an offence, if a person, enters into or becomes concerned in an arrangement as a result of which money or other property is made available or to be made available to another, knows or has reasonable cause to suspect that it will or may be used for the same purposes.[98] Finally, entering into or become concerned in an arrangement which facilitates the retention or control by or on behalf of another person of terrorist property by concealment,[99] removal prom the jurisdiction,[100] transfer to nominees,[101] or in any way[102] then it is an offence. To get defence under the Act it should prove that the defendant did not know and had no reasonable cause to suspect that the arrangement related to criminal property.[103] If a person does not disclose his believe or suspicion and the information on which it is based that another person has committed an offence under sections 15-18, then will be considered as an offence.[104] Failure to disclosure for a person, who is involved in a business in a regulated sector, that a person is engaged in money laundering is a criminal offence.[105] This Act provides identical defence as POCA 2002 for disclosure of any suspicious activities related to terrorist property to Serious Organized Crime Agency (SOCA).

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MLR 2007: For preventing activities relating to money laundering or terrorist financing, the Money Laundering Regulations 2007 (MLR 2007) specify arrangements which firms and individuals should follow.[106] More specifically, credit institutions,[107] financial institutions,[108] auditors,[109] insolvency practitioners,[110] external accountants,[111] independent legal professionals,[112] tax advisers,[113] estate agents,[114] trust or company service providers,[115] casinos,[116] and high value dealers[117] have fallen within this Regulations.[118] Failure to comply with MLR 2007 will impose a maximum of two years’ imprisonment, a fine or both.[119]

Risked Based Policy: The MLR 2007 is the evidence of the risk-based approach in the UK.[120] A relevant person must establish and maintain appropriate and risk-sensitive policies and procedures relating to customer due diligence, reporting, record-keeping, internal control, risk assessment and management, compliance management, and internal communication.[121]  According to, Regulation 7(3) of MLR 2007, a relevant person must determine the extent of customer due diligence measures on a risk-sensitive basis, and the measures are appropriate  if there is any risk involved in money laundering and terrorist financing.[122] Customer due diligence measures are defined as identifying the customer and verifying his identity, identifying a beneficial owner who is not the customer, and obtaining information on the purpose and intended nature of the business relationship.[123]

SARs and Number: Now we need to consider SARs to gather financial intelligence, and the procedures are mentioned in PCA 2002 and the MLR 2007.  It is stated in The PCA 2002, SARs should be submitted by MLRO if they ‘suspect’[124] or have ‘reasonable grounds for suspecting’ that an offence has been committed.[125] We already have discussed the term ‘suspect’ and its requirements.[126] According to KPMG, an accountancy firm, in 1995 the number of SARs submitted was 5,000 and in 2002 it was 63,000.[127]  In NCA’s report it is showed that SARs have increased by 7.82% within a year from 354,186 in 2013/14 to 381,882 in 2014/15.[128] However, there is a significant increase in the compliance costs which may vary, according to British Bankers Association £250 million per year, [129] but KPMG estimates £90 million[130] which is increasing day by day. In UK AML cost to banks are £650m per year.[131] Moreover, UK’s AML compliance cost is higher than other European countries like Italy, Germany and France.[132]

Prosecution, Conviction and Sanction Under UK’s AML Regime: Maximum penalty for money laundering offence within sections 327-329 is 14-year imprisonment and/or fine for which no maximum amount.[133] Moreover, s. 15 of MLR 2007 states that the Commissioner may impose a penalty of amount not exceeding £5000. Though, ML offenses were broad, the number of prosecutions and convictions is increasing each year.[134] UK’s money laundering prosecution and conviction number were respectively, 126 and 39 in 1999, 129 and 50 in 2000, 552 and 207 in 2004, and 2,318 and 1,348 in 2007 which clearly show a gradual increase.[135] Moreover, in 2012 number of prosecution under s. 327-329 of POCA 2002 was 5730.[136] Example of court’s imposing of maximum penalty is Ussma El-Kurd, 14 years imprisonment and £1 million were imposed as he was involved in laundering £70m.[137]  Philip Griffiths[138] and Duff[139], two solicitors, were sentenced to six months imprisonment for failing to disclosure transactions involving money laundering. Though Philip had not made any money from the transaction[140] and Duff took advice from another solicitor,[141] courts held that these sentencing were not disproportionate. FCA, which was previously FSA, can also impose financial sanctions. Michael Wheelhouse, an MLRO was fined £17,500 for failing to provide adequate systems and controls for money laundering.[142] Sudipto Chattopadhyay, Alpari’s former MLRO, was fined £1400 for failing to increase AML compliance of the firm and failed to report money laundering.[143] In 2014, Standard Bank Plc was imposed £7.6 m penalty for not complying MLR 2007.[144] Recently, FCA has today fined Deutsche Bank AG (Deutsche Bank) £163m for failing to maintain adequate AML control framework.[145] In 2015, Liam James Renolds, Johannes Franciscus Franken, Bulbinder Singh Sandbu were respectively sentenced to four years, five years four months and two years under s. 327-329 of POCA 2002 for money laundering.[146]

New Task Force: In 2016, David Cameron announced a new taskforce to deal with Panama Papers, jointly led by HMRC and the NCA, other members are SFO, FCA. Between them, they share will technology, experts and resources to tackle money laundering anywhere in the world.[147]

Criminal Finances Bill 2016-17: This Bill seeks, to amend various regime of POCA 2002, including an extension of the cash seizure and forfeiture orders,[148] enact enhanced measures to recover proceeds of crime, tackle corruption and money laundering, and counter terrorist financing. It implements changes to the (SARs) regime[149] and aims to assist law enforcement agencies to better investigate money laundering.[150] The Bill proposes to enable a court to grant an extension of the ‘moratorium period’[151] by a further 31 days, on application from a ‘senior officer’ (defined in the Bill).[152] Regulated entities will be able to share information between them if the disclosure will or may assist suspicion that a person is engaged in money laundering.[153] This may lead to the creation a single comprehensive SAR which combines multiple sources of information derived from public-private collaborative efforts.[154]

Table of Cases

English:

  • Crown Prosecution service v Richards [2006] EWCA Civ 849
  • R v Hussain [2002] EWCA Crim 6
  • R v Montila [2005] ALL ER 113
  • R v Rezvi [2002] ALL ER 801
  • R v DA Silva [2006] EWCA Crim 1654
  • R v Sail (Abdullah) [2006] UKHL 18
  • Shah v HSBC [2010] EWCA Civ 31; [2010] 3 All E.R. 477
  • P v P [2004] Fam 1
  • Bowman v Fels [2005] EWCA Civ 226
  • R v Ussma-el-Kurd [2001] Crim. L.R. 234 (CA)
  • R v Griffiths (Philip) [2006] EWCA Crim 2155
  • R v Duff [2003] 1C. App. R. (S) 471

USA:

  • United States v $4,255,625.39 551 F. Supp 314 (1982)

Table of Legislation

UK:

  • Proceeds of Crime Act 2002
  • Terrorism Act 2000
  • Insolvency Act 2000
  • Estate Agents Act 1979
  • Gambling Act 2005
  • Serious Organized Crime and Police Act 2005
  • Criminal Finances Bill 2016-17, HL Bill 124 (as amended in Committee) <http://services.parliament.uk/bills/2016-17/criminalfinances.html> accessed 15 April 2017.

Statutory Instrument:

  • The Money Laundering Regulations 2007, SI 2007/2157

Bibliography

Books:

  • Alldridge P, Money Laundering Law: Forfeiture, Confiscation, Civil Recovery, Criminal Laundering and Taxation of the Proceeds of Crime (Hart 2003)
  • Cox D, Handbook of anti-money laundering (Wiley 2014)
  • Gallant M, Money Laundering and the Proceeds of Crime: Economic Crime and Civil Remedies (Edward Elgar 2005)
  • Hopton D, Money laundering: a concise guide for all business (Gower 2006)
  • Harrison K and Ryder N, The Law Relating to Financial Crime in the United Kingdom (2nd edn, Routledge 2016)
  • Ryder N, Money laundering – an endless cycle? : a comparative analysis of the anti-money laundering policies in the United States of America, the United Kingdom, Australia and Canada (Routledge 2012)
  • Ryder N, Financial crime in the 21st century: law and policy (Edward Elgar 2011
  • Robinson J, The Laundrymen: Inside the World’s Third Largest Business (Pocket Books 1998)
  • Zagaris B, International White Collar Crime: Cases and Materials (Cambridge 2010)

Journals:

  • Baity W, ‘Banking on Secrecy — The Price for Unfettered Secrecy and Confidentiality in the Face of International Organised and Economic Crime’ (2000) 8(1) Journal of Financial Crime 83
  • Gilmour N and Ridley N, ‘Everyday vulnerabilities – money laundering through cash intensive businesses’ (2015) 18 (3) Journal of Money Laundering Control 293, 294
  • Goldby M ‘Anti-money laundering reporting requirements imposed by English law: measuring effectiveness and gauging the need for reform’ (2013) 4 J.B.L. 367, 370
  • Seymour B, ‘Global Money Laundering’ (2008) 3(3-4) Journal of Applied Security Research 373
  • Hamin Z and others, ‘Configuring criminal proceeds in money laundering cases in the UK’ (2014) 17(4) Journal of Money Laundering Control 374, 376
  • Stanton K, ‘Money laundering: a limited remedy for clients’ (2010) 26 (1) Professional Negligence 56, 58
  • Ramage S, ‘2008 amendments of the Proceeds of Crime Act 2002 and other legislation that combats terrorist financing’ (2008) 182 Criminal Lawyer 1
  • Alkaabi A and others, ‘A Comparative Analysis of the Extent of Money Laundering in Australia, UAE, UK and the USA’ [2010] Finance and Corporate Governance Conference 2010 Paper 1
  • Fisher J and Reurts N, ‘The Criminal Finances Bill: implications for financial service providers’ (2017) 32(2) JIBFL 92
  • Nicholas Ryder, ‘The Financial Services Authority and money laundering: a game of cat and
  • Mouse’ [2008] Cambridge Law Journal 635, 636

Websites:

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  • International Money Laundering Information Bureau, ‘History of money laundering’ <http://www.imlib.org/page1 hist.html accessed> 1 April 2017
  • Financial Action Task Force, ‘Where goes money laundering occur?’ <http://www.fatf-gafi.org/faq/moneylaundering/#d.en.11223> accessed 4 April 2017
  • FATF, ‘FAQ’ <http://www.fatf-gafi.org/pages/faq/moneylaundering/> accessed 5 April 2017
  • UK Parliament, ‘MONEY LAUNDERING AND THE FINANCING OF TERRORISM’ <https://www.publications.parliament.uk/pa/ld200809/ldselect/ldeucom/132/13204.htm> accessed 5 April 2017
  • UK Parliament, ‘Memorandum by MONEYVAL’ <https://www.publications.parliament.uk/pa/ld200809/ldselect/ldeucom/132/9042907.htm> accessed 6 April 2017
  • Financial Services Authority, ‘FSA fines Habib Bank AG Zurich £525,000 and money laundering reporting officer £17,500 for anti-money laundering control failings’ (15 May 2012). <http://www.fsa.gov.uk/library/communication/pr/2012/055.shtml> accessed 15 April 2017
  • Financial Service Authority, ‘FSA Fines Alpari and Its Former Money Laundering Reporting Officer, Sudipto
  • Chattopadhyay for Anti-Money Laundering Failings’ (5 May 2010) <http://www.fsa.gov.uk/library/communication/pr/2010/077.shtml> accessed 15 April 2017
  • United Nations Office on Drugs and Crime ‘Illicit money: how much is out there?’ <https://www.unodc.org/unodc/en/frontpage/2011/October/illicit-money_-how-much-is-out-there.html> accessed 5April 2017
  • United Nations Office on Drugs and Crime, ‘Money-Laundering and Globalization’ <https://www.unodc.org/unodc/en/money-laundering/globalization.html> accessed 5 April 2017
  • Financial Conduct Authority, ‘FCA fines Deutsche Bank £163 million for serious anti-money laundering controls failings’ (31 Jan 2017) < https://www.fca.org.uk/news/press-releases/fca-fines-deutsche-bank-163-million-anti-money-laundering-controls-failure > accessed 15 April 2017
  • UK launches cross-government taskforce on the ‘Panama Papers’ (10 April 2016) <https://www.gov.uk/government/news/uk-launches-cross-government-taskforce-on-the-panama-papers> accessed 15 April 2017

Newspaper:

  • Rankin J, ‘City’s status as stolen-money haven a stain on UK, says ex-regulator MP’ The Guardian (London, 7 December 2014) <(https://www.theguardian.com/business/2014/dec/07/city-london-status-stolen-money-haven-stain-uk-regulator-mp-stephen-barclay> accessed 5 April 2017

Others:

  • Financial Action Task Force, ‘Third Mutual Evaluation Report Anti-Money Laundering and Combating the Financing of Terrorism’ (Financial Action Task Force 2007)
  • Home Office and HM Treasury, ‘Action Plan for anti-money laundering and counter-terrorist finance’ (Home Office and HM Treasury 2016)
  • International Monetary Fund, ‘United Kingdom: Anti-Money Laundering/Combating the Financing of Terrorism Technical Note’ (International Monetary Fund 2011
  • National Crime Agency, ‘National Strategic Assessment of Serious and Organised Crime 2015’ (National Crime Agency 2015)
  • National Crime Agency, ‘National Strategic Assessment of Serious and Organised Crime 2016’ (National Crime Agency 2016)
  • Camdessus M, ‘Money Laundering: The Importance of International Countermeasures’ (IMF, 10 February 1998) <https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp021098> accessed 5 April 2017
  • KPMG, ‘Money Laundering: Review of the Reporting System’ (KPMG 2003)
  • HM Treasury, ‘Consultation on the transposition of the Fourth Money Laundering Directive’ (HM Treasury 2016)
  • HM Treasury, ‘The Financial Challenge to Crime and Terrorism’ (London: HM Treasury 2007)
  • Home office, ‘Report on the operation in 2004 of the Terrorism Act 2000’ (Home Office 2004)
  • Mark Yeandle and others, ‘ANTI-MONEY LAUNDERING REQUIREMENTS: COSTS, BENEFITS AND PERCEPTIONS’ (Z/Yen Limited 2005)
  • International Monetary Fund, ‘United Kingdom: Anti-Money Laundering/Combating the Financing of Terrorism Technical Note’ (Country Report No. 11/231, 2011)

[1] William Baity, ‘Banking on Secrecy — The Price for Unfettered Secrecy and Confidentiality in the Face of International Organised and Economic Crime’ (2000) 8(1) Journal of Financial Crime 83.

[2] Karen Harrison and Nichols Ryder, The Law Relating to Financial Crime in the United Kingdom (2nd edn, Routledge 2016) 11.

[3] Brian Seymour, ‘Global Money Laundering’ (2008) 3(3-4) Journal of Applied Security Research 373, 374.

[4] Nicholas Ryder, ‘The Financial Services Authority and money laundering: a game of cat and Mouse’ [2008] Cambridge Law Journal 635, 636.

[5] International Money Laundering Information Bureau, ‘History of money laundering’ <http://www.imlib.org/page1 hist.html accessed> 1 April 2017.

[6] United States v $4,255,625.39 551 F. Supp 314 (1982).

[7] Nicholas Gilmour and Nick Ridley, ‘Everyday vulnerabilities – money laundering through cash intensive businesses’ (2015) 18 (3) Journal of Money Laundering Control 293, 294.

[8] Peter Alldridge, Money Laundering Law: Forfeiture, Confiscation, Civil Recovery, Criminal Laundering and Taxation of the Proceeds of Crime (Hart 2003) 1.

[9] Karen and Ryder, (n 2) 12.

[10] Doug Hopton, Money laundering: a concise guide for all business (Gower 2006), 1.

[11] Financial Action Task Force, ‘Where goes money laundering occur?’ <http://www.fatf-gafi.org/faq/moneylaundering/#d.en.11223> accessed 4 April 2017.

[12] Home Office and HM Treasury, ‘Action Plan for anti-money laundering and counter-terrorist finance’ (Home Office and HM Treasury 2016) 7.

[13] National Crime Agency, ‘National Strategic Assessment of Serious and Organised Crime 2015’ (National Crime Agency 2015) para 72.

[14] M. Michelle Gallant, Money Laundering and the Proceeds of Crime: Economic Crime and Civil Remedies (Edward Elgar 2005) 11.

[15] Alldridge (n 7) 3.

[16] Zaiton Hamin and others, ‘Configuring criminal proceeds in money laundering cases in the UK’ (2014) 17(4) Journal of Money Laundering Control 374, 376.

[17] Karen and Ryder(n 2) 12.

[18] International Monetary Fund, ‘United Kingdom: Anti-Money Laundering/Combating the Financing of Terrorism Technical Note’ (International Monetary Fund 2011) 5-6.

[19] Bruce Zagaris, International White Collar Crime: Cases and Materials (Cambridge 2010) 67.

[20] Hopton (n 7) 2.

[21] Nichols Ryder, Money laundering – an endless cycle? : a comparative analysis of the anti-money laundering policies in the United States of America, the United Kingdom, Australia and Canada (Routledge 2012).

[22] Seymour (n 3) 375.

[23] Ibid.

[24] Jeffrey Robinson, The Laundrymen: Inside the World’s Third Largest Business (Pocket Books 1998) 4.

[25] FATF, ‘FAQ’ <http://www.fatf-gafi.org/pages/faq/moneylaundering/> accessed 5 April 2017.

[26] Michel Camdessus, ‘Money Laundering: The Importance of International Countermeasures’ (IMF, 10 February 1998) <https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp021098> accessed 5 April 2017.

[27] United Nations Office on Drugs and Crime, ‘Money-Laundering and Globalization’ <https://www.unodc.org/unodc/en/money-laundering/globalization.html> accessed 5 April 2017.

[28] United Nations Office on Drugs and Crime ‘Illicit money: how much is out there?’ <https://www.unodc.org/unodc/en/frontpage/2011/October/illicit-money_-how-much-is-out-there.html> accessed % April 2017.

[29] Jennifer Rankin, ‘City’s status as stolen-money haven a stain on UK, says ex-regulator MP’ The Guardian (London, 7 December 2014) <(https://www.theguardian.com/business/2014/dec/07/city-london-status-stolen-money-haven-stain-uk-regulator-mp-stephen-barclay> accessed 5 April 2017.

[30] UK Parliament, ‘MONEY LAUNDERING AND THE FINANCING OF TERRORISM’ <https://www.publications.parliament.uk/pa/ld200809/ldselect/ldeucom/132/13204.htm> accessed 5 April 2017.

[31] National Crime Agency, ‘National Strategic Assessment of Serious and Organised Crime 2016’ (National Crime Agency 2016) 28.

[32] Financial Action Task Force, ‘Third Mutual Evaluation Report Anti-Money Laundering and Combating the Financing of Terrorism’ (Financial Action Task Force 2007) 250.

[33] Hopton (n 7) 7.

[34] [2005] ALL ER 113.

[35] [2002] ALL ER 801.

[36] [2006] EWCA Civ 849.

[37] [2002] EWCA Crim 6.

[38] Financial Action Task Force (n 33).

[39] Hopton (n 7) 8.

[40] Serious Organized Crime and Police Act 2005, s. 95.

[41] The Strasbourg Convention 1990 (ETS No.141); UK Parliament, ‘Memorandum by MONEYVAL’ <https://www.publications.parliament.uk/pa/ld200809/ldselect/ldeucom/132/9042907.htm> accessed 6 April 2017.

[42] Financial Action Task Force (n 33).

[43] Karen and Ryder (n 2) 22.

[44] Hopton, (n 7) 25.

[45] Ibid 27.

[46] Dennis Cox, Handbook of anti-money laundering (Wiley 2014), 61

[47] HM Treasury, ‘Consultation on the transposition of the Fourth Money Laundering Directive’ (HM Treasury 2016) 4.

[48] Dennis Cox (n 47) 76-77.

[49] HM Treasury, ‘Consultation on the transposition of the Fourth Money Laundering Directive’ (n 49) 5.

[50] Hopton (n 7), 41.

[51] HM Treasury, ‘The Financial Challenge to Crime and Terrorism’ (London: HM Treasury 2007) 17.

[52] Proceeds of Crime Act 2002, s. 327.

[53] Proceeds of Crime Act 2002, s. 328.

[54] Proceeds of Crime Act 2002, s. 329.

[55] Karen and Ryder (n 2) 13.

[56] Proceeds of Crime Act 2002, s. 330.

[57] Proceeds of Crime Act 2002, s. 331.

[58] Proceeds of Crime Act 2002, s. 332.

[59]  As described by the Act, disclosure of the fact that a person is subject to an investigation for allegation of money laundering; Proceeds of Crime Act 2002, s. 333A.

[60] Proceeds of Crime Act 2002, s. 342.

[61] Proceeds of Crime Act 2002, s. 327 (3).

[62] Property will be considered as property regardless of situating in UK or abroad and includes money, property (personal, real, movable or heritable, other tangible property, and things in action; Proceeds of Crime Act 2002, s. 340 (3); Hopton (n 7) 43.

[63] Proceeds of Crime Act 2002, s. 340 (a).

[64] Proceeds of Crime Act 2002, s. 340 (b).

[65] Hopton (n 7) 44.

[66] Hopton (n 67).

[67] Nicholas Ryder, Financial crime in the 21st century: law and policy (Edward Elgar 2011) 37; This section amends and updates s. 50 Drug Trafficking Act 1994 and s. 93A Criminal Justice Act 1988, s. 38 Criminal Law (Consolidation) (Scotland) Act 1995 and Article 46 Proceeds of Crime (Northern Ireland) Order 1996.

[68] Ryder, Money laundering – an endless cycle? (n 21) 87

[69] R v DA Silva [2006] EWCA Crim 1654.

[70] R v Sail (Abdullah) [2006] UKHL 18, para 52.

[71] Shah v HSBC [2010] EWCA Civ 31; [2010] 3 All E.R. 477.

[72] Shah [2010] EWCA Civ 31; [2010] 3 All E.R. 477 at [22] and [25].

[73] Miriam Goldby ‘Anti-money laundering reporting requirements imposed by English law: measuring effectiveness and gauging the need for reform’ (2013) 4 J.B.L. 367, 370.

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[74] Keith Stanton, ‘Money laundering: a limited remedy for clients’ (2010) 26 (1) Professional Negligence 56, 58

[75] Ryder, Financial crime in the 21st century (n 74) 37

[76] [2004] Fam 1.

[77] Ibid, para 64.

[78] Bowman v Fels [2005] EWCA Civ 226.

[79] Proceeds of Crime Act 2002, s. 329 (1).

[80] Ryder, Financial crime in the 21st century (n 74) 38.

[81] Proceeds of Crime Act 2002, s. 338 (1) (a).

[82] Proceeds of Crime Act 2002, s. 338 (1) (b).

[83] Proceeds of Crime Act 2002, s. 327 (2).

[84] Proceeds of Crime Act 2002, s. 327 (2) (c).

[85] Proceeds of Crime Act 2002, s. 329 (2) (c).

[86] Sally Ramage, ‘2008 amendments of the Proceeds of Crime Act 2002 and other legislation that combats terrorist financing’ (2008) 182 Criminal Lawyer 1.

[87] Hopton (n 7) 4.

[88] Ibid 73.

[89] Ryder, Money laundering – an endless cycle? (n 21) 89.

[90] Terrorism Act 2000, s. 14(1)(a).

[91] Terrorism Act 2000, s. 14(1)(b).

[92] Terrorism Act 2000, s. 14(1)(c).

[93] Terrorism Act 2000, s. 15(1).

[94] Terrorism Act 2000, s. 15(2).

[95] Terrorism Act 2000, s. 15(3).

[96] Terrorism Act 2000, s. 15.

[97] Terrorism Act 2000, s. 16(1).

[98] Terrorism Act 2000, s. 17.

[99] Terrorism Act 2000, s. 18(1)(a).

[100] Terrorism Act 2000, s. 18(1)(b).

[101] Terrorism Act 2000, s. 18(1)(c).

[102] Terrorism Act 2000, s. 18(1)(d).

[103] Terrorism Act 2000, s. 18(2).

[104] Terrorism Act 2000, s. 19.

[105] Terrorism Act 2000, s. 21A.

[106] Dennis Cox (n 47) 91.

[107] Relating to the taking up and pursuit of the business of credit institutions, defined in Article 4(1)(a) of the Banking Consolidation Directive 2000/12/EC.

[108] This is defined as an undertaking, including a money service business, when it carries out one or more of the activities listed in points 2 to 12 and 14 of Annex 1 to the Banking Consolidation Directive.

[109] Any firm or individual who is a statutory auditor, Companies Act 2006.

[110] Any person who acts as an insolvency practitioner, Insolvency Act 2000, s. 3.

[111] A firm or sole practitioner, providing accountancy services to others, Money Laundering Regulations 2007, regulation 3(7).

[112] Firm or sole practitioner providing services of a legal nature, Money Laundering Regulations 2007, reg 3(9).

[113] Provides advice about the tax affairs of other persons, Money Laundering Regulations 200, reg3(8).

[114] As defined by the Estate Agents Act 1979, s. 1.

[115]A firm or sole practitioner who provides business services relating to the formation of legal entities or acts, Money Laundering Regulations 2007, reg 3(10).

[116] A casino holds an operating license by virtue of the Gambling Act 2005, s. 65(2).

[117] A business or sole trader that deals in goods where the payment is at least 15,000 euros in total. Money Laundering Regulations 2007, regulation 3(12).

[118] Karen and Ryder (n 2) 34.

[119] Dennis Cox (n 47) 92.

[120] Ryder, Money laundering – an endless cycle? (n 21) 77.

[121] The Money Laundering Regulations 2007, SI 2007/2157, reg 20(1).

[122] Ryder (n 21).

[123] (n 133) reg 5.

[124] Proceeds of Crime Act 2002, s. 328(1), s.330(2)(a) and s.331(2)(a).

[125] Proceeds of Crime Act 2002, s. 330(2)(b) and s.331(2)(b).

[126] See (n 74) to (n 83).

[127] KPMG, ‘Money Laundering: Review of the Reporting System’ (KPMG 2003) 15

[128] Home office and HM Treasury, ‘Action Plan for anti-money laundering and counter-terrorist finance (Home Office and HM Treasury 2016) 13; National Criminal Agency, ‘Suspicious Activity Reports (SARs) Annual Report 2015’ (National Criminal Agency 2015) 6

[129] Home office, ‘Report on the operation in 2004 of the Terrorism Act 2000’ (Home Office 2004) 19-20

[130] KPMG (n 139) 46-47

[131] Richard Charles Henry Alexander, Insider dealing and money laundering in the EU: law and regulation (Ashgate 2007) 119

[132] Mark Yeandle and others, ‘ANTI-MONEY LAUNDERING REQUIREMENTS: COSTS, BENEFITS AND PERCEPTIONS’ (Z/Yen Limited 2005) 24

[133] Proceeds of Crime Act 2002, s. 334(1).

[134] International Monetary Fund, ‘United Kingdom: Anti-Money Laundering/Combating the Financing of Terrorism Technical Note’ (Country Report No. 11/231, 2011) para 12.

[135] Ali Alkaabi and others, ‘A Comparative Analysis of the Extent of Money Laundering in Australia, UAE, UK and the USA’ [2010] Finance and Corporate Governance Conference 2010 Paper 1, 9.

[136] Karen and Ryder (n 2) 37.

[137] R v Ussma-el-Kurd [2001] Crim. L.R. 234 (CA).

[138] R v Griffiths (Philip) [2006] EWCA Crim 2155.

[139] R v Duff [2003] 1C. App. R. (S) 471.

[140] Griffiths (n 33).

[141] Duff (n 151).

[142] Karen and Ryder (n 2) 43.

[143] Financial Service Authority, ‘FSA Fines Alpari and Its Former Money Laundering Reporting Officer, Sudipto Chattopadhyay for Anti-Money Laundering Failings’ (5 May 2010) <http://www.fsa.gov.uk/library/communication/pr/2010/077.shtml> accessed 15 April 2017.

[144] Financial Services Authority, ‘FSA fines Habib Bank AG Zurich £525,000 and money laundering reporting officer £17,500 for anti-money laundering control failings’ (15 May 2012). <http://www.fsa.gov.uk/library/communication/pr/2012/055.shtml> accessed 15 April 2017.

[145] Financial Conduct Authority, ‘FCA fines Deutsche Bank £163 million for serious anti-money laundering controls failings’ (31 Jan 2017) < https://www.fca.org.uk/news/press-releases/fca-fines-deutsche-bank-163-million-anti-money-laundering-controls-failure > accessed 15 April 2017.

[146] Karen and Ryder (n 2) 45.

[147] UK launches cross-government taskforce on the ‘Panama Papers’ (10 April 2016) <https://www.gov.uk/government/news/uk-launches-cross-government-taskforce-on-the-panama-papers> accessed 15 April 2017.

[148] Criminal Finances Bill 2016-17 (HL Bill 124) (as amended by Committee) <http://services.parliament.uk/bills/2016-17/criminalfinances.html> accessed 15 April 2017.

[149] Jonathan Fisher and Natasha Reurts, ‘The Criminal Finances Bill: implications for financial service providers’ (2017) 32(2) JIBFL 92.

[150] Ibid 93.

[151] The current period during which no action furthering a transaction that is the subject of a SAR, or the ‘moratorium period’, is outlined in s 335(6) of POCA 2002.

[152] Criminal Finances Bill 2016-17 (HL Bill 124) (as amended by Committee), s. 9.

[153] Criminal Finances Bill 2016-17 (HL Bill 124), (as amended by Committee), s. 10.

[154] Fisher and Reurts (n 149) 94.

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