The money laundering legislation the United Kingdom mainly contained in two principle forms of legislation which are the Proceeds of Crime Act 2002 (PoCA) and the Money Laundering Regulations 2003.

The Money Laundering Regulations 2003 were made in order to prevent the use of the financial system for the purposes of money laundering. The Regulations give effect to EEC Council Directive 91/308 on prevention of the use of the financial system for the purpose of money laundering, as amended by European Parliament and Council Directive 2001/97/EC. They came into force as follows; regulation 10 in so far as it relates to a person who acts as a high value dealer, on 1st April 2004, regulation 2(3)(h), on 31st October 2004; regulation 2(3)(i), on 14th January 2005; all other regulations, on 1st March 2004. The regulations have identified a number of professions which fall within the “Regulated Sector,’ they encompass a wide range of professions including auditors, banks, insurers, tax advisors, estate agents and stockbrokers. In recent years, there is evidence suggesting that firms of accountants and even solicitors have actually assisted criminals in money laundering.

Only persons carrying on "relevant business" are affected by the Act. A relevant business includes Regulation 2(2) Persons carrying on a relevant business must comply with requirements relating to identification procedures, record-keeping procedures, and internal reporting procedures Regulation 3(1)(a). The identification procedures are detailed at Regulation 4; and the circumstances where it is not necessary to obtain evidence of any person's identity are detailed at Regulation 5. Particular provisions are made in relation to the identification of persons before they are allowed to use a casino's gaming facilities at Regulation 8. The record-keeping procedures are at Regulation 6 and internal reporting procedures at Regulation 7.

They must also establish such other procedures of internal control and communication as may be appropriate for the purposes of forestalling and preventing money laundering Regulation 3(1) (b).  It is also relvant to take appropriate measures so that employees are made aware of the relevant provisions (i.e. the provisions of the Money Laundering Regulations 2003, SI 2003/3075, the PoCA 2002 ss 327–340, and the Terrorism Act 2000 ss 18, 21A (s 21A as added)), and are given training in how to recognise and deal with transactions which may be related to money laundering (Regulation 3(1)(c)).

Contravention of these provisions is an offence Regulation 3(2) and a person guilty of such an offence is liable: (1) on conviction on indictment, to imprisonment for a term not exceeding two years, to a fine, or to both;(2) on summary conviction, to a fine not exceeding the statutory maximum and see Regulation 3(2). The 'statutory maximum' is the prescribed sum within the meaning of the Magistrates' Courts Act 1980 s 32 as amended and see the Interpretation Act 1978 s 5, Sch 1 definition added by the Criminal Justice Act 1988 s 170(1), Sch 15 para 58.

Provision is made in the Regulations for the registration and inspection of money service operators and high value dealers (Regulations 9 - 25). The meanings of 'money service operator' and 'high value dealer' are at Regulation 2(1).

Supervisory authorities, which include inter alios the Financial Services Authority and the Bank of England, must disclose relevant information to the police if they know or suspect that someone has or may have been engaged in money laundering (Regulation 26).The Financial Services Authority has as one of its objectives the reduction of financial crime (see Financial Services and Markets Act 2000 s 2(2)) and the Authority may make rules in relation to the prevention and detection of money laundering (Financial Services and Markets Act 2000 Section s 146). There are also statutory provisions penalising those who assist in the retention of the proceeds of drug trafficking or criminal conduct and requiring banks and their employees to report suspicions or beliefs of money laundering to the police Proceeds of Crime Act 2002 Pt 7. Anti-terrorism legislation has been enacted to prevent the retention or control of terrorist property, including money Terrorism Act 2000.

A recent House of Lords' decision in R v Saik means fewer money laundering cases will be prosecuted as conspiracies. The avalanche of draconian legislation in recent years and the establishment of powerful agencies to stem the illicit flow of “dirty money” has not only led to legal practitioners coming out in cold sweats when faced with the dilemma of whether they are compelled to inform on their clients, it has also led to a dramatic rise in money laundering prosecutions.

Prosecutions often focus on large-scale operations involving several defendants with different levels of involvement and varying degrees of knowledge about the money's source. The substantive criminal offences, which previously resided in several Acts, have now been modified and replaced by the Proceeds of Crime Act 2002. In summary, a person is guilty of an offence if he enters into an arrangement which he knows or suspects facilitates the acquisition, retention, or control of criminal property. This point of view was supported by Gray Grant. 

PoCa 2002, has successfully replaced the earlier legislation dealing with laundering proceeds of crime in the Criminal Justice Act 1998 as well as the Drug Trafficking Act 1994 which dealt with laundering proceeds of drug trafficking.

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The PoCA has formed new mechanisms to examine and recover any proceeds of crime and now provides for three main offences contained in sections 327-329. The offences are, assisting another to retain the benefits of criminal conduct, concealing proceeds of criminal conduct and acquisition, use or possession of the proceeds of criminal conduct.

Any establishment within the ‘regulated sector’ may as well be found guilty of an offence under s330 of the PoCA if they be unsuccessful to make a disclosure of this information to a money laundering officer which has been nominated within an organisation.  

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