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Corporate and fraudulent behaviour

Money laundering

Introduction

Money laundering covers any activity by which the apparent source and
ownership of the proceeds of crime are changed in such a way that the
cash or other assets appear to have been obtained legitimately.

The two relevant pieces of legislation on money laundering are the Proceeds of
Crime Act 2002 and the Money Laundering Regulations 2007.

The legislation imposes important obligations on professionals, such as accountants,
auditors and legal advisers to report money laundering to the authorities and to have
systems in place to train staff and keep records.

The money laundering process

Money laundering covers any activity by which the apparent source of money or
property is changed and the process usually involves three phases:

 Placement

 Layering

 Integration

The offences

The Proceeds of Crime Act 2002 sets out three offences:

Money laundering

Under s.327 it is an offence to conceal, disguise, convert, transfer, or remove
criminal property from England, Wales, Scotland or Northern Ireland.

Concealing or disguising criminal property includes concealing or disguising its
nature, source, location, movement or ownership.

Under s.328 an offence is committed when a person enters into or becomes
concerned in an arrangement which he knows or suspects will facilitate another
person to acquire, retain, use or control criminal property.

Under s.329 an offence is committed when a person acquires, uses or has
possession of property which he knows or suspects represents the proceeds of
crime.

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