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Money Laundering - Legislation
by Billy Steel
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A Brief History
What is Money Laundering?
How Big is the Problem?
The Money Laundering Process
Stages of the Process
Money Laundering Methods
How Can We Prevent It?
Effects on Financial Institutions
Business Areas Prone To Money Laundering
Money Laundering Offences
LEGISLATION - Part 1
It is, I hope, understood that due to limitations of time and space, I cannot hope to give a comprehensive account of the law relating to the financial crime of MoneyLaundering. For that you will have to refer to the references I will mention.
The UK has long noticed that third parties may be involved in facilitating the realisation of property which has been obtained unlawfully. Under Section 22(1) of the Theft Act 1968:
A person handles stolen goods if (otherwise in the course of stealing) knowing or believing them to be stolen goods he dishonestly receives the goods, or dishonestly undertakes or assists in their retention, removal, disposal or realisation, by or for the benefit of another person, or if he arranges to do so.
This provision, while being very wide-ranging in its effects, relates solely to goods which are or which represent the proceeds of stolen goods. This section covers a wide range of 'laundering' activities when money or other realisable property is dishonestly handled. Thus Michael Relton could be charged with offences relating to dishonest handling because he was handling the proceeds of the Brinks Mat robbery. This law however, did not cover the drugs issue. This was left to a later piece of legislation, namely, Section 27 (1) of the Misuse of Drugs Act 1971, which permitted the court:
By or before which a person is convicted of an offence under this Act…. To order anything shown to the satisfaction of the court to relate to the offence, to be forfeited and either destroyed or dealt with in such other manner as the court may order.
Thus a court could order the forfeiture of property, whether money, drugs, weapons or vehicles found in the possession of the convicted person and used in the continuance of offences under the Misuse of Drugs Act 1971.
However, in 1980, the House of Lords made an historic ruling, which restricted the scope of section 27 of the Misuse of Drugs Act 1971. In the case of R v Cuthbertson an appeal was allowed against the forfeiture of £750,000 and was significant in that it exposed the limitations in the present laws regarding forfeiture. This resulted in the setting up of the Hodgson Committee with the brief of inquiring into ways of filling the vacuum created in the law by this decision.
The Committees findings, along with the deliberations of the Home Affairs Select Committee which followed, led to the passing of the Drug Trafficking Offences Act 1986 (DTOA). This was the first statute to categorise money laundering as a criminal offence and therefore notable in the chronology and evolution of laws to fight the money launderer. Subsequently, this has now been extended to new laws, which cover laundering of the proceeds of all crime while various other related provisions have been added.
Brown (1996) states: UK money laundering legislation can be said to have three themes that run through it:
Copyright © 1998/2006 Billy Steel. All rights reserved.