Money Laundering











What is Money Laundering?


Practitioners need to be aware of the requirements of the anti-money laundering provisions of the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007 (which replaced the Money Laundering Regulations 2003 from 15th December 2007). The original provisions came into effect on 1st March 2004 and apply to any knowledge or suspicion of money laundering that arises after that date.


The following commentary provides a very brief outline of the main money laundering provisions. It is not intended as a full exposition of the law relating to this subject and should not be taken as such.


Money laundering is specifically defined by the legislation. It occurs when someone:-


    • Conceals, disguises, coverts, transfers or removes (from the UK) criminal property


    • Enters into or is concerned in an arrangement which they know or suspect facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person


    • Acquires, uses or has possession of criminal property.





And they know or suspect that the property constitutes or represents a benefit from criminal conduct.


Tax evasion is criminal conduct, and criminal property includes the proceeds of tax evasion, no matter how small the amount; there in no de minimis limit. Examples of what constitutes money laundering in the field of taxation include:-


    • Deliberately understating profits


    • Deliberately overstating expenses


    • Failing to notify HMRC, once it comes to light, of an innocent or negligent error which leads to a loss of tax


    • Failing to notify HMRC of an over-repayment of tax when the repayment is known to be excessive.





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