Money laundering is an offence under the Proceeds of Crime Act and during an investigation into what has happened to the money and property that are the proceeds of criminal activity, suspected money laundering offences will often be discovered and investigated.
Money laundering is the way that money gained from the proceeds of crime, such as drug trafficking or fraud, is placed in temporary accounts, disguised, used to fund terrorism, hidden, or used to purchase goods and services where receipts can be produced to make it appear legal. Sometimes it can be as simple as smuggling cash out of the country or as complex as investing illegal money with the full knowledge and assistance of financial professionals at home and overseas. The aim is that the money can eventually be brought into the mainstream without being traced back to any criminal activity.
The prosecution does not have to prove that the money came from a specific crime; and they don’t have to wait for a conviction in a criminal case before they can charge you with money laundering connected with it.
You can be charged with money laundering on your own, or as part of a conspiracy, even if you were counselling or aiding or abetting in some way; and if you are convicted you face a prison sentence, having your finances investigated and a Confiscation Order to seize your assets, including your family home.
Money laundering insight
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William Lahive BA (hons) Law
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What is money laundering?
Money laundering is the process of transforming the proceeds of crime into ostensibly legitimate money or other assets. However, in a number of legal and regulatory systems, the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing and evasion of international sanctions. Most anti-money laundering laws openly conflate money laundering (which is concerned with source of funds) with terrorism financing (which is concerned with destination of funds) when regulating the financial system.
The principal money laundering offences carry a maximum penalty of 14 years imprisonment.
Money Laundering Regulations are designed to protect the UK financial system, as well as preventing and detecting crime. If a business is covered by these regulations then controls are put in place to prevent it being used for money laundering.
Money laundering is broadly defined in the UK. In effect any handling or involvement with any proceeds of any crime (or monies or assets representing the proceeds of crime) can be a money laundering offence. An offender’s possession of the proceeds of his own crime falls within the UK definition of money laundering. The definition also covers activities within the traditional definition of money laundering, as a process that conceals or disguises the proceeds of crime to make them appear legitimate.
Unlike certain other jurisdictions (notably the US and much of Europe), UK money laundering offences are not limited to the proceeds of serious crimes, nor are there any monetary limits. Financial transactions need no money laundering design or purpose for UK laws to consider them a money laundering offence. A money laundering offence under UK legislation need not even involve money, since the money laundering legislation covers assets of any description. In consequence, any person who commits an acquisitive crime (i.e., one that produces some benefit in the form of money or an asset of any description) in the UK inevitably also commits a money laundering offence under UK legislation.
This applies also to a person who, by criminal conduct, evades a liability (such as a taxation liability)—which lawyers call “obtaining a pecuniary advantage”—as he is deemed thereby to obtain a sum of money equal in value to the liability evaded.