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Anti Money Laundering Notes

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Main Money Laundering Offences for Solicitors - Proceeds of Crime Act 2000 [POCA]
Offence n 327
Concealing, disguising, converting or transferring criminal property or removing it from the UK
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 328
 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)

329 Acquiring, using or possessing criminal property
Failure to disclose suspicions of money laundering - objective test is applied
R v Griffiths and Pattison (2006) EWCA Crim 2155:

330  "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"
Tipping off a person whom you know or suspect has been laundering money that a report has 333A
been made or that an investigation is being carried out or contemplated 342
Prejudicing a money laundering investigation
Penalties under POCA
Conviction for the above-mentioned POCA offences carries a prison term of up to 14 years and/or a fine.
Main Defences
 Authorised Disclosure for s.328 "Arrangement" offence and s.330 "Suspicions" offence
 No knowledge/suspicion - s.328 "Arrangements" offence; s.330 "Suspicions" offence (but see objective test) and s.333A(3) "Tipping off" offence
 "Reasonable excuse"
 Individual solicitors' defence - lack of training
 Legal Professional Privilege (LPP) unless the information supplied by the client is given with the intention of furthering a criminal purpose.
Procedural Requirements - Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 [MLR]
Applies to persons acting in the course of business in the UK including "independent legal 8 professionals".
Firms must apply to the SRA for approval under the MLR - acting without such approval is a criminal 26 offence carrying a penalty of imprisonment and/or a fine.
18 Take appropriate steps to identify and assess the risks of money laundering and terrorist financing.
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)

21  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.
27 Instigate client due diligence (CDD) procedures - subject to limited exceptions, solicitors are obliged to obtain verification of the identity of each client before a business relationship is established and before a transaction is carried out.
28(11 Due diligence must be ongoing throughout the client relationship.

37 Simplified due diligence: low risk client/transactions (e.g. client is a public company listed in

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