DEFERRED PROSECUTION AGREEMENTS BECOME AVAILABLE AND DPA CODE OF PRACTICE PUBLISHED  

Deferred Prosecution Agreements ("DPAs") have been made available in the UK from 24 February 2014. DPAs are an alternative to criminal prosecution, which are intended to address the commission of economic crimes by commercial organisations. Under a DPA, a company will agree to certain conditions, which may include a financial penalty, reparation to victims, repayment of profits and measures to prevent future offending, as well as an agreed statement of facts setting out its wrongdoing. The prosecutor will lay – but not immediately proceed with – criminal charges against the company. The charges will be withdrawn after a specified period if the company has complied with the DPA conditions, with the result that the company will not formally be convicted of an offence. The DPA will be a public document, approved by a judge in open court.  

The Criminal Procedure (Amendment No. 2) Rules 2013 (SI 2013/3183) have been published, together with an explanatory memorandum. Among other things, the amendment adds a new Part 12 to the CrimPR to set out the procedure governing applications for the approval of DPAs and the associated proceedings. A Ministry of Justice (MoJ) guide to the Rules has also separately published. Parliament has also published the Crime and Courts Act 2013 (Commencement No 8) Order 2014. The order brought section 45 and Schedule 17 of the Crime and Courts Act 2013 into force on 24 February 2014, and makes provision for DPAs. The Order has been published alongside a Code of Practice issued by the Director of the Serious Fraud Office (SFO) and the Director of Public Prosecutions (DPP), which sets out their approach for:

  • the use of DPAs under the Crime and Courts Act 2013; and
  • applying to court for the approval of a DPA, and overseeing DPAs after their approval by a court (for example, in relation to variation, breach, termination and completion).

For more information on DPAs please see our briefing here.  

SENTENCING COUNCIL: DEFINITIVE GUIDELINE ON FRAUD, BRIBERY AND MONEY LAUNDERING: CORPORATE OFFENDERS  

The Sentencing Council has published a new definitive guideline on fraud, bribery and money laundering offences committed by corporate offenders which will come into force on 1 October 2014 at the same time as the guideline for individuals who have committed fraud, bribery or money laundering offences, which will be published later in 2014.

The Guideline is issued as part of a package of legislation to support the introduction of DPAs, and the Guideline is intended to assist as a point of reference when financial penalty levels within DPAs are being considered and negotiated with immediate effect. The guideline has the prospect of significantly increasing the level of fines imposed on companies for these offences. For more information please click here for our briefing.  

COURT OF APPEAL CONSIDERS MENTAL ELEMENT OF ATTEMPTED MONEY LAUNDERING OFFENCE  

The Court of Appeal has recently handed down judgment in R v Pace and another [2014] EWCA Crim 186 in which it held that proof of a mental element of suspicion was insufficient for the purposes of a count of attempted money laundering. The appellants successfully appealed against their convictions for attempting to conceal, disguise or convert criminal property contrary to the Criminal Attempts Act 1981 s.1(1), arguing that the Criminal Attempts Act required that a defendant intended to commit an offence and therefore precluded suspicion from being the applicable mens rea. A constituent element of the offence of converting criminal property was that the property in question was criminal property. Accordingly, an intent to commit the offence involved an intent to convert criminal property. The Crown's argument, that the appellants sought to intend to convert property, suspecting, if not knowing, that it was stolen was insufficient mens rea for s.1 (1). A similar analysis applies in the context of conspiracy to commit money laundering; see R v Saik [2006] UKHL 18.

JMLSG CONSULTATION ON CONSUMER CREDIT GUIDANCE  

The Joint Money Laundering Steering Group (JMLSG) has published a consultation on proposed guidance for firms offering consumer credit. When the FCA assumes regulatory responsibility for consumer credit on 1 April 2014, it will also assume responsibility for supervising such firms’ compliance with their anti-money laundering obligations.  

DPP ANNOUNCES PLAN TO TRACE MORE CRIMINAL ASSETS ABROAD  

The Director of Public Prosecutions for England and Wales has unveiled a new drive to clamp down on criminals hiding their assets abroad. The CPS now plans to deploy up to six specialist lawyers as Asset Recovery Advisors (ASA) overseas to priority countries, to work directly with local criminal justice agencies and partners in government to improve asset recovery in both the short and longer term. The CPS already have some specialist prosecutors in Egypt, the Caribbean, Italy and elsewhere who do asset recovery work as part of their role, but extra funds have now been made available to finance two new dedicated ARAs in Spain and the United Arab Emirates.

HMT ADVISORY NOTICE: MONEY LAUNDERING AND TERRORIST FINANCING CONTROLS IN OVERSEAS JURISDICTIONS  

HM Treasury has published a new advisory notice on money laundering and terrorist financing controls in overseas jurisdictions. On 14 February 2014, the Financial Action Task Force (FATF) published two statements (included as Annex A and B respectively) identifying jurisdictions with strategic deficiencies in their anti-money laundering and counter financing regimes. In response to the statements published by FATF on 14 February 2014, HM Treasury advises firms to consider particular jurisdictions deemed high-risk for the purposes of the Money Laundering Regulations 2007, and to apply enhanced due diligence measures in accordance with the risks.  

MAN CONVICTED OF £1.3M 'PONZI SCHEME' FRAUD  

Matthew Ames has been found guilty of two counts of fraudulent trading following a trial at The Old Bailey. Ames was the sole director of two companies which were found to have been operating a large scale 'ponzi scheme', defrauding investors out of more than £1.35m over a three year period. The scheme claimed to invest money in teak tree plantations that generated carbon credits, which could then be traded for profit. Out of the £1.6m that was invested across both companies, only £250,000 was ever returned to investors.