What Are The Key UK Money Laundering Offences?

According to KPMG UK’s mid-year Fraud Barometer, there has been an uptick in the number of money laundering cases that have reached the courts. 

The report states:

“The research, which records alleged fraud cases with a value of £100k and above heard in UK Crown Courts, has revealed 122 fraud cases in total were heard in the first six months of the year. This is up from 105 cases during the same period in 2023. By contrast, fraud value was just over £305 million, a 14% drop compared to the first six months of the previous year, when the total fraud value stood at £354.2 million.”

This news should ring alarm bells for organisations subject to anti-money laundering regulations. It is essential to understand a) how legitimate businesses and otherwise law-abiding people become caught up in money laundering and b) what the duties and responsibilities of regulated businesses are in relation to anti-money laundering.

Concerning the first question, several different people and organisations can come into contact with laundered money. For example, a Solicitor who acts as a Conveyancer for a person buying a property with laundered funds. Or a bank clerk who deposits cash from an unknown source into an account. 

Money laundering offences may be prosecuted under the Proceeds of Crime Act 2002 (POCA). POCA defines money laundering, the obligations there are to report it and what constitutes knowledge or suspicion. Alongside POCA, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) provides for the administrative and regulatory requirements for firms within the regulated sector.

If the suspected proceeds of crime predate 24 February 2003, POCA does not apply, and any enforcement action will be pursuant to earlier legislation.

What are the three primary money laundering offences? 

The three main money laundering offences set out in sections 327 -329 in POCA are:

  • The basic money laundering offence involves concealing, disguising, converting, or transferring the proceeds of crime, or removing the proceeds of crime from the jurisdiction of England and Wales.
  • Entering into, or becoming concerned in an arrangement in which the person knows or suspects the retention, use or control of the proceeds of crime. It is this aiding and abetting offence that causes companies to become embroiled in money laundering. 
  • Acquiring, using, or possessing the proceeds of crime – commonly referred to as handling stolen goods.

What does the Prosecution have to prove?

To show a person knew an offence under POCA was being committed, the Prosecution must prove the suspect knew that the property or funds originated from the proceeds of crime. For a suspicion to be established, the Prosecution does not have to prove that suspicion is firmly grounded in the person’s mind, only that it is more than fanciful.

What is failure to report money laundering offences?

There are four offences in POCA concerned with the failure to report money laundering:

  • Section 330 states that a person in a regulated sector commits an offence if they know or suspect that another person is engaged in an offence under sections 327 to 329 of POCA and does not tell a relevant nominated officer.
  • If a nominated officer fails to reveal, as soon as practicable, a disclosure of a known or suspected offence under sections 327 to 329 of POCA they will be committing an offence unless they have a reasonable excuse for the non-disclosure.
  • Under section 333A, it is an offence to tip off a person that an investigation is being contemplated or made under sections 327 to 329 of POCA.
  • Any interfering with relevant evidence or making a disclosure likely to prejudice an investigation into offences under sections 327 to 329 of POCA is an offence under section 342 of the said Act. Regulated and non-regulated people can commit this offence.

What is a Suspicious Activity Report?

A Suspicious Activity Report (SAR) is the mechanism for making a formal disclosure regarding knowledge or suspicion of offences under sections 327 to 329 of POCA. Normally, this type of report is made to the National Crime Agency (NCA). When a SAR is received, the NCA will analyse the information provided and either give or refuse the consent required to allow completion of the related transaction. If consent is given, the transaction can be completed without any risk of committing a POCA offence. If permission is refused, the transaction cannot be completed, and the Money Laundering Reporting Officer (MLRO) must ensure they do not take any action (or inaction) that results in a tipping-off offence being committed.

In summary

The Prosecution must prove many elements to secure a money laundering offence conviction successfully; for example, can you and/or your organisation be linked to any aspect of the offence, did the money actually originate from criminal activity, or did you have knowledge or suspicion of tipping off, to name but a few.

It is vital to instruct an experienced Criminal Defence Barrister if an enforcement body begins investigating you or your organisation in regard to money laundering. They can quickly identify any weaknesses in the enforcement body’s investigation and provide the best chance of ensuring the matter does not progress to a prosecution.

Get in Touch

Tanveer Qureshi specialises in general crime, white-collar crime and regulatory investigations and prosecutions.  If you require legal representation or have a related question, please contact me for free consultation or call me directly on ​0203 637 2190.