Part VII of the Proceeds of Crime Act 2002 (POCA) imposes a
reporting regime which is complex and, at times, confusing. Failure
to comply may amount to a criminal offence. Solicitors trying to
decipher the different disclosure obligations set out in Part VII
may find it useful to remember the following:
1. Are the required elements to make a report present?
There are certain elements which must be present before you have
a duty to make a SAR.
Do you know or suspect, or are there reasonable grounds for
suspecting, that a person is engaged in money laundering (as
prohibited by sections 327, 328 or 329 of Part VII - see point 4
below for further details) or in activities which would be money
laundering if they occurred in the UK, or in a conspiracy or
incitement to commit such an act, or in aiding, abetting,
counselling or procuring such an act?
- can you identify such a person?; or
- do you know the whereabouts of the criminal proceeds?; or
- do you have information that will or may assist in identifying
such a person or the criminal proceeds?
If you answer no to all these three questions (a) to (c) you do
not have a duty to make a report.
2. Where did the criminal activity giving rise to the alleged
criminal property take place?
If the acts took place wholly outside the UK, consider whether
the overseas exemption might apply. Remember that conduct that is
criminal in the country in which it was committed but would not be
criminal in the UK is not "criminal conduct" for the purposes of
3. How did you obtain the information?
Did the information on which your knowledge or suspicion is
based come to you 'during the course of a business in the
regulated sector'? As a solicitor much of your work may be
'business in the regulated sector' although certain
practice areas, including dispute resolution, fall outside the
Did the information come to you in 'privileged
circumstances'? If so, there is no obligation for you to make
However, if you are advising clients in the regulated sector on
their own reporting obligations, remember that in most cases the
privileged circumstances defence will not apply to them, so they
may have a reporting obligation under POCA.
4. Do you need to get appropriate consent?
In cases where you suspect the presence of criminal property, do
you intend to deal with or advise or be concerned in arrangements
in respect of it (or property which in whole or in part represents
it) in any way? If so, you may be at risk of committing an offence
under sections 327, 328 and 329 of Part VII which prohibit the
acquisition, possession, use of criminal property as well as the
concealing, disguising and transferring of it or the entering into
or becoming concerned in arrangements which you suspect may
facilitate money laundering by another.
As a general rule, solicitors acting on matters involving
criminal property should seek consent in advance to carry out the
prohibited act save in the limited circumstances where Bowman v
Although the requirement to obtain consent is separate from the
obligation to report suspicions of money laundering, in practice a
single report containing a request for consent may be filed.
5. Try to be as accurate as possible while remaining
When reporting, provide all essential detail but avoid the
temptation to clutter your report with extraneous information. The Serious Organised Crime Agency (SOCA) (now known as the National Crime Agency (NCA))
needs to know the nub of the matter without getting submerged in
superflous detail (the NCA can always ask for further information if
they need it).
Extensive knowledge of the predicate offence is not required but
a reporter should be able to state the reasons for his or her
suspicion, name the relevant person suspected of money laundering
and/or point to the whereabouts of the proceeds of crime or give
information that may enable the enforcement agencies to do so.
Make it clear on the face of the report if you are seeking
consent to deal in criminal property - and draft your request
carefully to cover all the activities you are proposing to carry
6. SARs should not be used as a means of establishing whether
or not you can take on a client or even act on a particular
The NCA is not an integrity check provider. Where you have reasons
to be concerned about the integrity of your clients or the probity
of the matter you are acting on you should conduct your own checks
(and are required to do so under the Money Laundering Regulations
Routine requests to your clients for information about
themselves or the source of their funds will not generally amount
to a 'tipping off' offence.
7. Obtaining consent from the NCA will only protect you, by way of
a defence, from committing a money laundering offence under Part
It will not protect you from committing or facilitation of any
other criminal offence.
Julia Adams is a senior lawyer in Slaughter and May's
Compliance Department and a member of the Money Laundering