An ‘inefficient’ statutory defence available to solicitors who report suspicious activity could be removed as part of the government’s plans to overhaul the UK’s anti-money laundering regime.
The Home Office and HM Treasury this week published a detailed action plan for 'anti-money laundering and counter-terrorist finance' aiming ‘to make the UK a more hostile place for those seeking to move, hide or use the proceeds of crime or corruption’.
As part of efforts to build a ‘stronger partnership’ with the private sector, the government proposes to remove what it calls an ‘inefficient’ regime which allows those reporting suspicions to avoid prosecution.
Under the Proceeds of Crime Act (POCA), individual persons and businesses in the regulated sector are required to report suspicious transactions or activity.
Under section 335 of POCA a ‘reporter’ can avail themselves of a defence against committing a money laundering offence if they seek the consent of the UK Financial Intelligence Unit to conduct a transaction or activity about which they have suspicions.
Concerns about the consent regime were raised by respondents to the Home Office’s call for information on the operation of the SARs [suspicious activity reports] regime last year.
According to a summary of the findings, published as an annex to the action plan, many of the 60 respondents ‘say it causes delays, and difficulties with customers, and some also view it as incompatible with their business’.
The government envisages replacing the consent regime with an ‘intelligence-led approach’ supported by information sharing through the Joint Money Laundering Intelligence Taskforce.
Should the consent regime be removed, the act would be amended ‘to ensure that reporters who fulfil their legal and regulatory obligations would not be criminalised’.
The action plan states: ‘The government would create powers to enable reporters to be granted immunity for taking specified courses of action (eg maintaining a customer relationship when to terminate it would alert the subject to the existence of a law enforcement investigation).’
The annex document notes that concerns have also been raised about the ‘tipping-off’ offence in POCA. ‘Reporters are concerned that any sharing of information, even to assist in preventing or detecting crime, could be an offence,’ the document states.