Money laundering considerations

By Tolley in association with Emma Broadbent of Grant Thornton
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The following Personal Tax guidance note by Tolley in association with Emma Broadbent of Grant Thornton provides comprehensive and up to date tax information covering:

  • Money laundering considerations
  • Introduction
  • Tax offences generally
  • Tipping off
  • Civil offences
  • Reluctance to correct past errors
  • Tax evasion
  • The privilege reporting exemption
  • Conclusion

This guidance note gives an overview of the obligations imposed on tax advisers in relation to money laundering offences.

Introduction

The Money Laundering Regulations 2007 came into force in December 2007 and all businesses that are covered by the regulations have to put in place suitable anti-money laundering controls. The regulations apply to different business sectors, including accountants. Businesses that are covered by the regulations must be monitored by a supervisory authority, for example a professional body. If a business is not covered by a supervisory authority, it may have to register with HMRC. The HMRC website   includes further details in respect of these regulations.

The regulations specify the policies and procedures that must be put in place in order to satisfy the anti-money laundering requirements. In particular, these consider the requirements of the Proceeds of Crime Act (POCA) 2002 (subscription sensitive), which is the primary legislation in respect of money laundering offences for tax advisers.

The definition of money laundering used to mean the movement of ‘dirty’ money (ie that deriving from serious crime) around the financial system to disguise its origins and thereby become ‘clean’ money within the system.

This is still one specific meaning of ‘money laundering’ and one an adviser must still be alert to and report. However, under POCA 2002 (subscription sensitive), the meaning is much wider and includes:

  • concealing criminal property
  • entering into an arrangement whilst knowing or suspecting that it facilitates the acquisition, retention, use or control of criminal property
  • acquiring, using or possessing criminal property

POCA 2002, ss 327-329 (subscription sensitive)

These offences are even wider than they may initially appear, because the broad definition of criminal property includes any property that “constitutes or represents a person’s (financial)

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