Chapter 2 · Money Laundering — The Offences

The UK Proceeds of Crime Act 2002 creates three principal money-laundering offences that apply to anyone (not just the regulated sector):

These are distinct from the regulated-sector offences (s.330-333) covered in §4 below.

s.327 lists five verb-forms, and each captures a distinct handling method:

1. Conceal — hide physically OR obscure the nature, source, location, ownership
2. Disguise — mask origin (e.g. through layering)
3. Convert — change form (cash → crypto → gold)
4. Transfer — move between people or accounts
5. Remove from the UK (specifically — get it out of jurisdiction)

"Concealing" is broader than physically hiding — disguising the nature, source, location or ownership of the property qualifies.

s.328 catches the helpers: solicitors setting up structures, accountants doing books, bankers processing transfers, agents facilitating property purchases.

Being CONCERNED in the arrangement is enough — you don't need to be a principal or a beneficiary. Requires knowledge or suspicion that the arrangement facilitates acquisition, retention, use or control of criminal property.

s.329 catches the end-recipient of laundered proceeds — anyone who acquires, uses or possesses criminal property.

Three defences are unique to s.329:

1. Authorised disclosure — to the MLRO / NCA
2. Knowledge or suspicion arose only AFTER the acquisition
3. Adequate consideration — bought at market value in good faith

Example of "adequate consideration": a solicitor paid a normal fee is not liable even if the money came from crime — provided they didn't know.

The mens rea for the principal offences is knowledge OR suspicion that the property represents proceeds of crime.

Key points:

• NOT proof of intent to launder — merely knowledge or suspicion
• NOT recklessness — that's a lower standard than suspicion
• NOT wilful blindness alone — though it can support inference of suspicion
• "Suspicion" is a low threshold: more than fanciful, but need not be conclusive

Case law (R v Da Silva, 2006): suspicion is a "possibility, more than fanciful", of the relevant facts.

Maximum sentences under POCA:

Also: confiscation, civil recovery, cash forfeiture orders, unexplained wealth orders (UWOs) — see [[Ch 4]] for civil recovery mechanisms.

"Criminal property" under POCA is property that constitutes or represents a person's benefit from criminal conduct, where the alleged offender knows or suspects that.

Key: property need not still be the original proceeds — it can be property representing benefit (e.g. cash converted into a car, then sold for a boat).

POCA follows the "all crimes" principle: any criminal offence can be a predicate for money laundering. There is:

• NO minimum sentence threshold
• NO closed list of qualifying predicates
• NO de-minimis financial value

Contrast with EU 6MLD, which lists 22 harmonised predicates. UK is broader.

Foreign predicate offences can also trigger POCA if the conduct would be criminal in the UK (dual criminality). Certain narrow exceptions apply where UK law would treat the conduct differently (e.g. conduct legal in the UK but illegal abroad may not qualify — the tax exception is the classic example).

Applies to people working in the regulated sector — banks, investment firms, insurers, MSBs, TCSPs, high-value dealers, lawyers, accountants, estate agents (in scope of MLR 2017).

Offence: failure to make a disclosure to the MLRO / NCA when you know, suspect, or have reasonable grounds to know or suspect money laundering.

The reasonable grounds limb is the key — see §2.4 below.

Every regulated firm must appoint a Money Laundering Reporting Officer (MLRO) — the nominated officer under POCA:

• Sole authority to file SARs to the NCA (staff report internally to MLRO)
• Must be of sufficient seniority + independence
• Cross-reference: FCA-regulated firms designate a "MLRO" under SYSC 3.2.6R — a specific SMF role under SMCR (SMF17)

See [[Ch 4 — Prevention Framework]] for the full MLRO responsibilities catalogue.

s.331 mirrors s.330 but applies specifically to the MLRO: they commit an offence if, having received an internal report, they fail to consider it and (if warranted) submit a SAR to the NCA.

Practical: MLROs must document their decision-making — a "no SAR" decision needs a reasoned record.

The most important interpretive point in POCA:

s.330 asks whether you knew, suspected, OR had reasonable grounds to know or suspect. The third limb is objective: it doesn't matter what you personally thought — a reasonable person in your position would have suspected.

This is why banks train staff on red-flag indicators: if you failed to spot indicators a reasonable colleague would have flagged, s.330 catches you regardless of your subjective state.

An offence for a regulated-sector person to disclose that a SAR has been made OR that an investigation is being conducted, where that disclosure is likely to prejudice the investigation.

Key features:

• Applies only to regulated-sector people (contrast s.342, below, which is broader)
• Doesn't require you to name the SAR — even hinting at the fact is enough if it would prejudice
• Max 2 years imprisonment

Not every disclosure is tipping off. Permitted:

1. Within the same undertaking — internal escalation within the firm
2. Between undertakings in the same group
3. Between professionals in different firms about the SAME client / SAME transaction, subject to safeguards
4. Legal privilege situations — legal advisers can discuss with client to dissuade from criminal conduct

Broader than tipping off:

• Applies to anyone (not just regulated sector)
• Covers making disclosure OR falsifying / destroying documents likely to be relevant
• Max 5 years imprisonment

Practical: destroying business records after learning of an investigation triggers s.342 alongside potential obstruction charges.

These are often confused:

• Failure to disclose (s.330) — you didn't tell the MLRO/NCA when you should have
• Tipping off (s.333A) — you told the CUSTOMER (or someone who'd warn them) that a SAR exists / investigation is on

They're opposite failures — one is under-reporting to authorities, the other is over-reporting to the wrong audience.