Tag: POCA

  • Landmark decision in Shah v HSBC Private Bank brings welcome relief for firms

    After four and half years, six reported decisions, three trips to the Court of Appeal and 27 days of trial, the High Court of Justice has today dismissed in its entirety Mr Shah and his wife’s claim for over US$300m against HSBC Private Bank (UK) Limited. This is a landmark decision that confirms a bank’s right to delay execution of a customer’s payment instructions and refuse to provide information in circumstances where the bank has a suspicion of money laundering that has been notified to the Serious Organised Crime Agency (“SOCA”).

    Berwin Leighton Paisner LLP reporting on the case state that Mr and Mrs Shah (the “Claimants”) were customers of the Bank. Between 20 September 2006 and 28 February 2007, the Bank delayed the execution of four separate payment instructions given by the Claimants, including an instruction to transfer approximately US$28 million. The reason for the delay was that the Bank held a suspicion that the funds in the Claimants’ account were criminal property and it had therefore made an authorised disclosure to SOCA seeking consent to make the payments. In each case, whilst the Bank was waiting for a response from SOCA (SOCA has 7 working days to respond), the Bank told the Claimants that it was complying with its statutory obligations but declined to provide any further information to the Claimants or their solicitors. Once consent had been given, the Bank complied with the payment instructions except for one instruction which the Claimants had previously cancelled.

    The Claimants lodged a claim against the Bank for breach of contract contending that the Bank’s failure promptly to carry out the payment instructions and to explain the reasons for not doing so had caused them substantial losses (over US$300m) in Zimbabwe. It was alleged that, upon hearing rumours that Mr Shah was suspected of money laundering in the UK, the Zimbabwean authorities became suspicious, froze and then seized Mr Shah’s assets.

    At trial the court was required to consider the following key questions:

    Did the Bank suspect money laundering? and
    Did the Bank have a duty to provide information about the delay?

    Mr Justice Supperstone of the Queen’s Bench Division rejected the Claimants’ claim in its entirety.

  • 23.07.09 SOCA – Belfast Anti-Money Laundering Conference

    SOCA – Belfast Anti-Money Laundering Conference

    Businesses in Northern Ireland are invited to a free one day conference on Tuesday 22 September 2009 to learn how to safeguard themselves against serious organised crime and money laundering.

    The event, organised by the Asset Recovery Working Group ‘Payback’ Team, and hosted by the Organised Crime Task Force (OCTF) and SOCA’s UK Financial Intelligence Unit (UKFIU) is aimed at small and medium sized businesses in Northern Ireland who are covered by the Money Laundering Regulations 2007.

    David Thomas, Head of the UK Financial Intelligence Unit, said: “Such businesses – by their very nature – are vulnerable to abuse by those attempting to launder the proceeds of crime. The conference will make businesses more aware of their role in identifying any suspicious activity taking place during their day-to-day work, thereby protecting their business and reducing harm caused to communities by serious organised crime.”

    This conference is specifically designed for employees of regulated businesses who are responsible for combating money laundering and aims to raise their awareness of the Suspicious Activity Reporting regime (SAR regime) and the requirements of the Money Laundering Regulations in order to better protect their businesses against the threat from money laundering.

    The conference includes presentations on law and practice, as well as smaller sessions, providing sector-specific guidance from regulators and case studies from the law enforcement community highlighting the value of SARs in reducing the harm caused by crime.

    The event will commence at 9.30am and finish at 4.30pm, anyone interested in attending should contact: eventmanagement@soca.x.gsi.gov.uk for an application form.

    Visit the BTC website for compliance help and support for firms in the regulated sector.

  • Q. When do I submit a SAR to SOCA?

    The Proceeds of Crime Act 2002 expanded, reformed and consolidated the UK’s criminal money laundering offences. Most of the offences under the Act apply to all individuals and businesses in the UK, however, some apply only to those doing business in the ‘regulated sector’.  

    A SAR should be made as soon as the knowledge or suspicion that criminal proceeds exist has arisen, especially if consent may be required, or at the earliest opportunity thereafter.

    SOCA’s preferred method for reporters to submit their suspicion is the SOCA Suspicious Activity Report Form. SOCA prefers these forms to be submitted electronically but hardcopy versions of the forms (including Limited Intelligence Value Reports) can be found on the SOCA website or obtained directly from SOCA. These can then be posted to the address below. Hardcopy consent requests should be faxed to 0207 238 8286.

    If you currently submit by post but would like to report electronically visit the SAR Online System or alternatively contact the Money.web support team

    Acknowledgement Letters
    SOCA will not acknowledge any SAR sent by fax, post, or by letter. Electronic submissions through money.web, bulk submission or through the SAR Online system, will receive an acknowledgment which will include an automatically generated ELMER reference number.

    If you have submitted a consent request, the Consent Team will contact you directly with the decision by telephone within the seven day notice period, and then post the appropriate letter to you as confirmation.

    If you have any queries relating to acknowledgments please write to the SAR Team at UKFIU, PO BOX 8000, London, SE11 5EN.

    Visit the BTC website for compliance help and support for firms in the regulated sector.

  • Q. What is the Proceeds of Crime Act 2002?

    POCA is the UK’s primary money laundering legislation. 

    Chapter 7 sets aout the predicate offences of money laundering applicable to all, S327 Conceals, S328 Arrangement and S329 and Aquires.

    Chapter 7 is also the area that concerns the professional in the regulated sector. It places a responsability on all employees in the regulated sector to report suspicious activity when they have “reasonable grounds to suspect” that money laundering is taking place. The responsability for compliance is placed upon the individual, not a firm. S330 is the offence of failing to report. 

    There is no de-minimus limit on the perceived value of the crime to be reported. A £10 proceed is to be treated the same as a £10,000 proceeed. Tax evasion is given no special status as a crime and is to be treated the same as any other type of crime.

  • Q. What are the Money Laundering Regulations?

    The ML Regulations are the UK’s secondary legislation in the AML/CFT regime. they where first introduced in 1993 and the 2007 Regulations are just the latest version.

    The 2003 Regulations, effective 1 March 2004 bough the professional such as the accountant, estate agent or solicitor into the regulated sector. The Regulations are activity based so therefore does not discriminate between the qualified or the unqualified.

    The Regulations are for firms to adopt policies and procedures to reduce the risk of money laundering taking place within their business. They are to help the individual fulfil their obligation to report suspicious activity under POCA.

    The 2007 gives rise to compulsory registation and supervision for compliance for all firms in the regulated sector regardless of membership of professional associations.

    The 2007 regulations also give rise to the “risk based” approach under which firms assess their risks according to a number of criteria and operate their polices and procedures according to that risk assessed and then demonstarte that to their supervisor.