What is Anti Money Laundering?
The 2010 Act widened the definition of money laundering. It includes all forms of handling or possessing proceeds, where the person knows or believes such proceeds is or represents the proceeds of criminal conduct, including possessing the proceeds of ones own crime, and facilitating any handling or possession of such proceeds. There are no de minimus provisions. Criminal conduct is defined in Section 6 of the Act and captures not only criminal offences but all other offences which result in proceeds. Therefore any offence which results in proceeds may represent money laundering and may fall to be reported. For example cost savings achieved from breaches of mandatory health and safety regulations and savings as a result of tax evasion may fail to be reported as money laundering.
Proceeds of Crime Act 2002 (POCA)
We have a duty under section 330 of the Proceeds of Crime Act 2002 to report to the HM Revenue & Customs if we know, or have reasonable cause to suspect, that you, or anyone connected with your business, are or have been involved in money laundering. Failure on our part to make a report where we have knowledge or reasonable grounds for suspicion would constitute a criminal offence.
The offence of money laundering is defined by section 340(11) of the Proceeds of Crime Act and includes the acquisition, possession or involvement in arrangements for concealing the benefits of any activity that constitutes a criminal offence in the UK. This definition is very wide and would include:
Tax evasion through deliberate understatement of income or overstatement of
expenses or stocks; or
Deliberate failure to inform the tax authorities of known underpayments.
We are obliged by law to report to H M Revenue & Customs without your knowledge and consent and in fact we would commit the criminal offence of tipping off under section 333 of the Proceeds of Crime Act were we to inform you of any suspicions or that a report had been made.