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How are ‘money laundering’, ‘terrorism financing’ and ‘fraud’ legally defined in your jurisdiction?
‘Money laundering’ is broadly defined under the Proceeds of Crime Act 2002 and covers virtually any act (including mere possession of property) that constitutes a person’s benefit from ‘criminal conduct’ (which is again broadly defined).
‘Terrorist financing’ under the Terrorism Act 2000 includes raising, providing, receiving, using or possessing funds or other property that the offender has reasonable cause to suspect may be used for the purposes of terrorism (including for the benefit of a proscribed organisation).
‘Fraud’ is defined in the Fraud Act 2006 as various acts of dishonesty (including making false representations, failing to disclose information or abusing a position) which are intended by the offender to make a gain for him or herself or another, or cause loss to another.
Principal and secondary offences
What are the principal and secondary offences in relation to money laundering, terrorism financing and fraud?
The principal money laundering offences are set out in Sections 327 to 329 of the Proceeds of Crime Act and include various acts in relation to criminal property, from disguising or converting the property to merely acquiring or possessing it, as well as becoming concerned in an arrangement that enables the acquisition or retention of criminal property by another person. ‘Criminal property’ is defined in Section 340 as property that constitutes or represents a person’s benefit from ‘criminal conduct’, which includes overseas conduct that is lawful where it occurs but which would be unlawful if it took place in the United Kingdom.
There are numerous secondary money laundering offences which mostly apply to persons in the regulated sector (including banks, accountants and most lawyers). The most important offences are failing to report money laundering (where there are reasonable grounds to suspect it) and tipping off a person about a report or an investigation.
The principal terrorist financing offences are outlined in Sections 15 to 18 of the Terrorism Act and include:
- raising, providing, receiving, using or possessing funds or other property that the offender has reasonable cause to suspect may be used for the purposes of terrorism (including for the benefit of a proscribed organisation); and
- becoming involved in an arrangement that makes funds available to another for the purposes of terrorism (likewise) or that facilitates the retention or control by another of ‘terrorist property’, which includes:
- property likely to be used for the purposes of terrorism;
- the resources of a proscribed organisation;
- the proceeds of acts of terrorism; or
- the proceeds of acts carried out for the purposes of terrorism.
Secondary terrorist financing offences include failing to report suspicions about terrorist acts, property and suspects.
The principal fraud offences are outlined in Sections 2 to 4 of the Fraud Act and include:
- making a false representation;
- failing to disclose information which the offender is under a legal duty to disclose; and
- abusing a position in which he or she is expected to safeguard (or not act against) the financial interests of another person.
In each case the act must be committed dishonestly and with the intention to make a gain for the offender or another, cause a loss to another or expose them to a risk of loss.
Secondary fraud offences include possessing, making or supplying articles for fraudulent use, participating in a fraudulent business and obtaining services dishonestly.
How are predicate offences defined?
The United Kingdom has adopted an all-crimes approach to predicate offences for the purposes of money laundering legislation (ie, there are no crimes for which the proceeds would not be capable of being laundered). It is unnecessary for a money laundering prosecution to define the predicate offence involved, provided the circumstances in which the money (or other property) was handled give rise to an irresistible inference that it constitutes or represents the proceeds of criminal conduct (following the judicial authority of R v Anwoir  EWCA Crim 1354). For the purposes of the specific money laundering offence in Section 18 of the Terrorism Act, any act of terrorism is effectively a predicate offence.
De minimis rules
What de minimis rules apply to money laundering, terrorism financing and fraud offences?
There are no de minimis rules in the legislation for money laundering, terrorist financing or fraud, except that under Section 339A of the Proceeds of Crime Act, certain principal money laundering offences do not apply to deposit-taking bodies where the amount concerned is under the threshold amount of £250.
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