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Money Laundering - Offences
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
There are now five basic money-laundering offences:
Assisting another to retain the benefit of crime.
Under section 93A (1) of the CJA88 (as inserted by section 29 CJA93); Section 38 (1) of the Criminal Law (Consolidated) (Scotland) Act 1995; Section 11, Prevention of Terrorism (Temporary Provisions) Act 1989; and Section 50, Drug Trafficking Act 1994.
Assistance occurs where a person is involved in an arrangement with another person, and knows or suspects that the other person is, or has been involved in, or has benefited from drug trafficking or criminal conduct if the arrangement helps the other person to retain or control proceeds directly or indirectly or enables the other person to use the proceeds or to invest them for his benefit. The legislation allows ‘disclosure to a constable’ which is normally to the FIU of the NCIS. This covers terrorist related activities as well. The penalty for commission of an offence under this section is imprisonment of up to six months, or a fine not exceeding the statutory maximum, or both, on summary conviction. On conviction on indictment, the penalty is imprisonment of up to 14 years, or a fine, or both.
Acquisition, possession or use of criminal proceeds.
Under section 93B(1) of the CJA88 (as inserted by section 30 CJA93); Section 37 of the Criminal Law (Consolidation) (Scotland) Act 1995; Section 54(3) to (6) of the NIEPA91 (as inserted by section 16 CJA93); and Section 51, Drug Trafficking Act 1994.
Acquisition is the offence of use or possession of property which you know or have reasonable grounds to suspect to be the proceeds of drug trafficking or criminal conduct and have acquired at less than full value. The aim of the offence is to prevent criminal proceeds being passed on by criminals to be enjoyed by third parties. Here, the reference is to ‘property’, rather than to ‘funds or investments’ as in section 93A (‘property’ including money).
The penalty for commission of an offence under this section is the same as for assisting another to retain the benefit of crime.
Concealing or transferring proceeds to avoid prosecution or a confiscation order (also called Own Funds money laundering).
Under section 93C of the CJA88 (as inserted by section 31 CJA93); Section 14(1) and (2) of the Criminal Justice (International Co-operation) Act 1990; Section 54(1) and (2) of the NIEPA91; and Section 49, Drug Trafficking Act 1994
Concealing is disguising, removing or transferring proceeds (directly or indirectly) of drug trafficking or criminal conduct for the purpose of avoiding or helping someone else avoid prosecution. The offence is committed by a person who assisted in the offence if s/he knows or has reasonable grounds to suspect the nature of the property.
Concealing or disguising any property includes concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it.
The penalty for commission of an offence under this section is exactly the same as for the assisting and acquisition offences.
Failure to disclose knowledge or suspicion of money laundering.
Under section 26B(1) of the DTOA (as inserted by section 18 CJA93); Section 52, Prevention of Terrorism (Temporary Provisions) Act 1989; and Section 39 of the Criminal Law (Consolidated) (Scotland) Act 1995.
This offence only relates to drug trafficking and terrorism and not to proceeds of crime in general. A person is guilty of an offence if, as a result of something he learns in the course of his trade, profession or employment, he does not report a suspicion to a police or customs officer.
There is a question as to whether disclosure is a waiver of professional privilege or a breach of any express or implied duty of confidentiality owed to a customer or client. For example, legal privilege for solicitors. If there is a criminal transaction then disclosure to the police will not constitute a waiver of professional privilege nor will it give actionable grounds for a claim for breach of confidence.
The penalty for commission of an offence under this section is imprisonment of up to six months, or a fine not exceeding the statutory maximum, or both, on summary conviction. On conviction on indictment, the penalty is imprisonment of up to five years, or a fine, or both.
Under section 93D of the CJA88 (as inserted by section 32 CJA93); and
Section 36(1) and (2) of the Criminal Law (Consolidation) (Scotland) Act 1995; and
Section 17 of the Prevention of Terrorism (Temporary Provisions) Act 1989, (as amended by section 50 CJA93).
The requirement to report suspicions is not much use if the suspected person is tipped off to the fact that s/he is under investigation. In order to preserve the integrity of an investigation, the offence of ‘tipping off’ occurs when information or any other matter which might prejudice the investigation is disclosed to the suspect of the investigation (or anyone else) by someone who knows or suspects (or, in the case of terrorism, has reasonable cause to suspect) that: a police investigation into money laundering has begun or is about to begin, or the police have been informed of suspicious activities, or a disclosure has been made to another employee under internal reporting procedures.
The penalty for tipping off is the same as for the failure to disclose offence.
Copyright © 1998/2006 Billy Steel. All rights reserved.