Anti Money Laundering - Business Law and Practice

Entering into or becoming concerned in an arrangement which you know or suspect facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person

Scope of offence:

• Not only actually handling client money – processing is enough

• Mens rea can just be knowledge or suspicion

Exception when dealing with litigation – Bowman v Fels (2005) EWCA Civ 226:

• C and D engaged in civil litigation – D had not paid VAT on some property

• Not a requirement here for solicitors to report money-laundering suspicion

• UNLESS litigation is a sham (insurance fraud arising from staged accidents)

Failure to disclose suspicions of money laundering – objective test is applied

R v Griffiths and Pattison (2006) EWCA Crim 2155:

• “the absolute obligation [of all professionals involved in handling money/financial transactions] to observe scrupulously the terms of [POCA] and the inevitable penalty that will follow failure to do so”

Establish and maintain policies, controls and procedures to manage the money laundering and terrorist financing risks identified in the risk assessment.

• Nominate a money laundering reporting officer (MLRO)

• Train staff – Firms are obliged to provide training to employees in respect of money laundering, and particularly on how to recognise and deal with transactions that potentially involve money laundering.