Adequate consideration and proceeds of crime

What you need to know

In June, the Court of Appeal (Civil Division) handed down its judgment in World Uyghur Congress v NCA and others [2024] EWCA Civ 715.

The judgment highlighted the limits of the ‘adequate consideration’ exemption from criminal liability for money laundering (section 329 of the Proceeds of Crime Act 2002).

The Legal Sector Affinity Group anti-money laundering guidance for the legal sector, updated in 2023, currently states:

“You will also have a defence if you received adequate consideration for the criminal property that is acquired, used or possessed.

“This exception applies where there was adequate consideration for acquiring, using and possessing the criminal property.

“It is important to note that the adequate consideration exception is restricted. Section 329 stipulates that consideration will not be adequate if:

• the value of the consideration provided is significantly less than the value of the property acquired, used or possessed; or
• the person who acquires, uses or possesses criminal property knows or suspects that his provision of services or goods may help another person to carry out criminal conduct”

We are very conscious of the issues arising from the Uyghur judgment and, in particular, the concerns about payment of fees for legal advice and how those funds may be used by solicitors.

We have received counsel’s advice, which has been shared with the Legal Sector Affinity Group (LSAG) and HM Treasury.

The 2023 LSAG anti-money laundering guidance for the legal sector remains Treasury-approved.

Based on the advice, we are of the view that the decision in World Uyghur Congress does not impose additional suspicious activity reporting (SARs) obligations on solicitors.

Solicitors representing clients or advising on their legal rights and obligations (which requires a reasonable sum to be paid for these services) are not engaged in money laundering, other than where a solicitor:

• is participating in money laundering, or
• knows, or is in fact, providing advice for the purpose of money laundering

Such activity is outside the scope of sections 327 to 329 of the Proceeds of Crime Act 2002.

What we’re doing

As your professional body, we amplify the powerful collective voice of more than 200,000 solicitors by advocating at the highest levels on the issues you’ve told us matter most.

We are discussing the advice and next steps with these stakeholders.

We will keep members up to date as the situation develops.