Money laundering and the law

 

What is money laundering?

Money laundering is defined as moving money that has come from an illegitimate source to make it seem as if it has come from a legitimate source. It is the process by which criminals attempt to legitimise the monetary proceeds of crime so that it appears that the money came from a legal source.

In recent years the government has taken extra steps to prosecute those who launder money. Law on money laundering has been enacted by Parliament to combat it, including:

  • The Money Laundering Regulations (MLR)
  • The Proceeds of Crime Act (POCA)

Law also imposes custodial sentences on those who become involved in money laundering.

The MLR imposes obligations on businesses to carry out a range of money-laundering checks. If you run a business, there is a possibility that you may have to ensure you comply with the MLR and laws that apply to the laundering of money. Law enforcement officers and solicitors should be contacted as soon as possible if you suspect someone of money laundering.

The Proceeds of Crime Act 2002 (POCA) made it a criminal offence to become involved in money laundering. The Act is very wide-ranging and includes the offence of:

  • Concealing
  • Disguising
  • Converting
  • Transferring
  • Removing criminal property from England and Wales

The Act also introduced the crime of ‘arranging’, which states that a person is guilty of an offence if they enter into an arrangement where they know, or suspect, that it facilitates the acquisition, retention, use, or control of criminal property.

One of the most important money laundering cases for solicitors relating to POCA, is that of Bowman v Fels, which excluded litigation from the scope of the ‘arranging’ offence.

Using solicitors to money launder

Solicitors are typical targets for criminals attempting to launder money and as a result there have been some attempts to provide greater regulation in this area.

The Money Laundering Regulations 2007 place obligations on ‘relevant persons’ to notice risky transactions and clients and report the suspicions. ‘Relevant persons’, as defined by the Regulations, included most solicitors and as a result some changes were required in most firms.

  • Firstly, an officer had to be nominated and any transactions which could have been money laundering activities would require the nominated officer to be notified
  • The nominated officer would then decide whether an external referral to the Serious Organised Crime Agency should be made. This is one of the few circumstances that client confidentiality must be overridden

Solicitors also need to be responsible for verifying the identity of any clients and must exercise varying amounts of due diligence in determining the client’s identity, depending on the risk level of the client.

Money laundering law is complex and as a professional it is always worth taking advice to ensure that you are up-to-speed with money laundering laws. Failure to keep abreast of changes can have very serious repercussions, regardless of whether you knew or suspected money laundering was occurring.

For more advice on hiring a solicitor, see our information page on using a money laundering solicitor.

Do you require representation for a money laundering case? Contact Law works with specialist criminal lawyers who are apt at dealing with cases of money laundering, also having knowledge of financial laws. Please call us on 0800 046 1464 or complete the web-form above.

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