The following are the ‘main’ money laundering offences from Chapter 7 PoCA 2002, these offences are applicable to all. These should make sense after the discussions of this section.
- Section 327 Concealing etc – (1) A person commits an offence if he conceals, disguises, converts transfers or removes criminal property for UK jurisdiction. (3) 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 328 Arrangement – (1) A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.
- Section 329 Acquisition etc – (1) A person commits an offence if he acquires uses or has possession of criminal property without adequate consideration.
Let us restate these offences but from our own point of view as an employee working in the regulated sector.
Section 327 concealing etc
It is an offence for you to conceal, disguise, convert, transfer or remove criminal property from England and Wales, Scotland or Northern Ireland. You could commit a section 327 offence, for instance, if you:
- Deliberately omit some of your client’s income from his tax returns, with an intention of wrongly depriving HMRC of tax
- List suspect income or expenditure under a legitimate heading
- Facilitate your customers purchase of shares or insurance from suspect funds
- Transfer suspect funds to another jurisdiction.
- Exchange currency from suspect sources
- Cheque encashment of business income when there is an intention for non declaration
Section 328 arrangements
It is an offence for you to become involved in an arrangement which you know or suspect facilitates the acquisition, retention, use or control of criminal property by another person. For example, you could commit a section 328 offence if you:
- provide a mortgage application or reference without making the proper checks that the information you provide to the lender is accurate
- complete a client’s tax return when it appears that he has not declared all of his income or has overstated his expenses
- provide services in relation to suspect funds in order to disguise them
- provide services in relation to a transaction or transfer of funds when there is no apparent commercial rationale for the transaction or transfer
- Receive into and pay out from your client account funds that have no connection with a regulated service provide by you.
Section 329 Acquisition, use and possession
Accountants are unlikely to commit this offence but other regulated activities such as high value dealers should be wary of clients who have acquired property at an obvious undervalue. Prices of goods can vary greatly – an undervalue would be well below the market price.
These examples highlight the dangers all regulated staff potentially face when they are negligent or bow to customer pressure to act against their professional ethics and training.
Section 5: Self assessment. You should have a basic grasp of the concepts of the money laundering legislation.
- Do you know what criminal property is?
- Do you understand the criminal property is an ‘all crimes’ concept?
- Can you name the three predicate offences for money laundering?