4 Categories of criminal offences
The Proceeds of Crime Act 2002 is the legislation that primarily obstructs and prevents money laundering. It imposes obligations upon accountants, auditors and legal advisers, and it requires them to report money laundering to authorities.
Under the Proceeds of Crime Act 2002, there are three categories of criminal offences:
- money laundering
- failure to report
- tipping off.
Money laundering
The Proceeds of Crime Act 2002 outlines the offence of concealing with regard to money laundering.
Box 4 Section 327(1), Proceeds of Crime Act 2002
327 Concealing etc
- A person commits an offence if he—
- a.conceals criminal property;
- b.disguises criminal property;
- c.converts criminal property;
- d.transfers criminal property;
- e.removes criminal property from England and Wales or from Scotland or from Northern Ireland.
Concealing or disguising criminal property includes concealing or disguising its nature, source, location, disposition, movement, or ownership or any rights with respect to it.
Section 340(3) of the Proceeds of Crime Act 2002 defines property as criminal property if ‘it constitutes a person’s benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and the alleged offender knows or suspects that it constitutes or represents such a benefit’.
Section 334(1) of the Proceeds of Crime Act 2002 sets out a maximum penalty of 14 years’ imprisonment and/or a fine for money laundering.
Failure to report
Under section 330 of the Proceeds of Crime Act 2002, a person commits an offence of failing to report if four conditions are satisfied. Section 330 applies to the regulated sector, which is defined in schedule 9 of the Proceeds of Crime Act 2002.
Box 5 Section 330, Proceeds of Crime Act 2002
330 Failure to disclose: regulated sector
1 A person commits an offence if [the conditions in subsections (2) to (4) are satisfied.
2 The first condition is that he—
- a.knows or suspects, or
- b.has reasonable grounds for knowing or suspecting,
that another person is engaged in money laundering.
3 The second condition is that the information or other matter—
- a.on which his knowledge or suspicion is based, or
- b.which gives reasonable grounds for such knowledge or suspicion,
came to him in the course of a business in the regulated sector.
3A The third condition is—
- a.that he can identify the other person mentioned in subsection (2) or the whereabouts of any of the laundered property, or
- b.that he believes, or it is reasonable to expect him to believe, that the information or other matter mentioned in subsection (3) will or may assist in identifying that other person or the whereabouts of any of the laundered property.
4 The fourth condition is that he does not make the required disclosure to—
- a.a nominated officer, or
- b.a person authorised for the purposes of this Part by the Director General of the National Crime Agency,
as soon as is practicable after the information or other matter mentioned in subsection (3) comes to him.
A maximum penalty of 5 years’ imprisonment and/or a fine applies for failure to report.
Tipping off
Under section 333A of the Proceeds of Crime Act 2002, it is a criminal offence to make a disclosure that is likely to prejudice money laundering investigations. This can happen when an accountant informs the client that a report has been submitted to the National Crime Agency (NCA).
There is a maximum penalty of 2 years’ imprisonment and/or a fine for tipping off.