Money laundering part 5

There are three general money-laundering offences under the Proceeds of Crime Act 2002 as amended. There is concealing under section 327, entering into arrangements under section 328 and acquisition use and possession under section 329. We will in due course be considering the detailed requirements of each of these sections. Amongst the defences in each case is a defence in the same terms under section 327(2A), 328(3) and 329(2A). That defence is in the following terms:

Nor does a person commits an offence under subsection (1) if -

(a) he knows, or believes on reasonable grounds, that the relevant criminal conduct occurred in a particular country or territory outside the United Kingdom, and

(b) the relevant criminal conduct-

(i) was not, at the time it occurred, unlawful under the criminal law then applying in that country or territory, and

(ii) is not of a description prescribed by order made by the Secretary of State.

In each case the relevant criminal conduct is a criminal conduct by reference to which the property concerned is criminal property.

Therefore the starting point to consider whether there is a defence (obviously if the conduct would not be unlawful here in the United Kingdom then we do not get as far as this) on the first limb namely whether the accused person actually knows that the relevant criminal conduct occurred outside the UK. Presumably this will be restricted to circumstances where that is correct (you cannot "know" as opposed to "believe" something which is not correct). The next potential aspect of defence is that, short of knowledge, you believe that to be the position. That is a question of fact. You may say you believe something, but circumstances as a whole will demonstrate whether or not that is a tenable assertion or not. If there is belief, it has to be based on reasonable grounds. Therefore the starting point will be to assess is there knowledge, is there belief in the alternative, and if there is belief are their reasonable grounds to support the belief?

Of course what you know or believe must relate to whether criminal conduct occurred. The second part is a question of fact. Thus what you believe and the grounds for that belief is relevant to whether or not there is actually criminal conduct which occurred outside the UK. Once it is established that it is outside the UK, the next question is whether or not it was unlawful in that territory. (We shall consider in looking at the substantive defences the "mental element", and obviously questions of belief can be relevant to that, but that is a separate issue as to whether separate defences such as this one are made out). If it was unlawful in that territory than the mere fact that you know that the criminal conduct occurred in that territory, and that as a matter of fact you believe that the conduct was unlawful in that territory but in fact it was not, does not make out this particular defence.

An issue relevant to this is the question of timing. Something can be lawful at one point in time but not at another. Again there may be difficult issues as regards what you exactly believed. On the face of it the section is addressed to the actual time of the offence, not the time you believe the offence was committed. That could potentially mean that you correctly thought the offence was committed abroad, but got the timing wrong , so that at the actual time of the offence occurring it was unlawful but would not have been the time you thought it occurred. On the face of it that would not give rise to defence under this limb (although we shall assess the impact on the mental element of the offence in due course).

There is also the question of the orders of the Secretary of State. The effect of those is that the exemption will not apply to overseas criminal conduct if it would attract a maximum sentence in excess of 12 months imprisonment were the conduct to have occurred in the UK (so that one would have to look at the particular criminal consequences here and the maximum sentence: thus in the theft example referred to in previous articles in this series even if that was legal where it occurred, difficult though it is to believe that that could be the position, since the maximum sentence for theft here exceeds 12 months that would not constitute a defence in that although the conduct would have been legal abroad, it would have been conduct which would have attracted a sentence in excess of the maximum and therefore cannot be relied upon by way of defence under this subsection). Moreover in respect of particular offences the conduct will always be exempt, that being conduct which would constitute an offence under the Gaming Act 1968, the Lotteries & Amusements Act 1976 or s23 or s35 of the Financial Services and Markets Act 2000.