1) Money laundering is the process by which the proceed of crime, which have illegitimate origins, are converted into assets that appear to be legitimate. The process usually comprises of three distinct phases:
a) Placement – The disposal of the proceeds of crime into an apparently legitimate business property or activity.
b) Layering – The transfer of money from place to place, in order to conceal its criminal origins.
c) Integration – The culmination of placement and layering, giving the money the appearance of being from a legitimate source.
2) Money laundering was first made a criminal offence in the UK under the Drug Trafficking Offence Act 1986, but is now regulated by the Proceeds of Crime Act 2002 (PCA 02) amongst others.
3) The PCA 02 has defined three categories of offence, being:
a) Laundering – Being the offences of concealing, disguising, converting, transferring, or removing criminal property from the UK.
b) Failure to report – It is an offence for someone who knows or suspects that another person is engaged in money laundering not to report that fact to the appropriate authority. This offence only relates to individuals working in a regulated industry, i.e. accountants.
c) Tipping off – It is an offence to make a disclosure likely to prejudice a money laundering offence already being undertaken, or which may be undertaken.
4) The penalties for those found guilty of money laundering are:
a) Laundering – A maximum 14 year prison sentence is possible, and/or a fine. Additionally the police may seize the megitimate assets.
b) Failure to report – Punishable by a maximum five year sentence, and / or a fine.
c) Tipping off – Punishable by a maximum five year sentence, and / or a fine.
Money Laundering
