Most people will have heard the phrase ‘money laundering’ and many understand the concept of ‘cleaning money’ as being the mechanism to giving legitimacy to illicit funds. But why is the definition of ‘criminal property’ so important when faced with an investigation into a money laundering offence.
What is criminal property as defined by the Proceeds of Crime Act (POCA) 2002?
It is important first to look at how criminal property is defined by the Proceeds of Crime Act 2002. There are two parts which the prosecution must establish in proving criminal property. First, that it constitutes ‘a person’s benefit from criminal conduct, or it represents such a benefit (in whole or part and whether directly or indirectly)’
Second, that ‘the alleged offender knows or suspects that it constitutes or represents such benefit’. The prosecution does not need to prove that the alleged offender knew exactly what the criminal conduct was, merely that they suspected. But, whether and to what extent they questioned the origin is also highly relevant.
What is Criminal Conduct as defined by POCA?
Criminal conduct is behaviour which would be a criminal offence in the UK or would constitute an offence in the UK if it occurred elsewhere. For example, monies may have been obtained from a country where that particular conduct is not an offence, but if that conduct is an offence in the UK then those funds could be criminal property.
It is immaterial when the conduct was carried out, by whom or who has benefitted from it.
What types of property can be determined as criminal?
There are multiple types of property, including:
- Money or cash.
- Real property such as land or buildings.
- Personal property including jewellery, art or electronics.
- Things in action such as debts.
- Intangible property – which objects you cannot physically touch, but still has monetary value and can be transferred from one individual to another for example patents, trademarks, brand names or cryptocurrency.
What is concealing criminal property?
Concealing criminal property is the legal definition for money laundering or ‘cleaning money’. As explained above in layman’s terms, it is giving legitimacy to illicit funds. Under POCA 2002, it is an offence to conceal, transfer or remove criminal property from the UK. Concealing property is defined as concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it.
To prosecute money laundering, the authorities need to show that the property derives from unlawful conduct. Whatever the property in question is, the prosecution must prove that it is derived from criminal conduct. However, by demonstrating the circumstances in which the property was handled, it might give rise to an inference that it could only have been obtained from criminal conduct.
It is therefore crucial that any lawyer representing an individual accused of a money laundering offence understands and considers the ‘criminal property’ aspect of the offence.
What Defences are available for Money Laundering Offences?
In addition to a defence case that the property was not illicit or derived from criminality, there are a number of statutory exemptions such as:
- Authorised disclosure to a constable, customs officer or nominated officer as long as the disclosure is made before the prohibited act, and he has appropriate consent. This also applies if they intended to make the disclosure but had a reasonable excuse not too
- If the act is done through the course of enforcement regarding any provision of POCA or any other enactment to do with criminal conduct. For example, police or other enforcement authorities take possession of criminal property in the course of their duties
- If a person knows, or believes on reasonable grounds that the criminal conduct occurred outside the UK, the criminal conduct was not unlawful in that country and the conduct is not proscribed by POCA
- If the property was acquired, used or possessed for adequate consideration ie they paid a reasonable amount in good faith for an item they did not know was stolen
There is also a modern slavery defence defined in Section 45 of Modern Slavery Act for victims of trafficking or slavery.
Why do you need a solicitor when facing a Money Laundering Investigation?
Criminal solicitors are there to ensure that your legal rights are protected throughout the investigation process and to ensure a fair hearing if the case proceeds to court. If you find yourself prosecuted or investigated for a money laundering offence it is important that you find a legal expert with a wealth of experience in dealing with money laudering offences. Solicitors are there to put your defence forward with their expertise and professionalism whilst gathering evidence such as witness statements and other documents that may be fundamental to the success of your case.
If you have been accused of money laundering, contact us today.