Воскресенье, 04 августа 2019

4. Evaluation of the current law

4.8 As we observed in our Consultation Paper, in adopting an «all-crimes» approach, the United Kingdom («UK») has chosen to exceed the minimum international standards required by European Union laws or recommended by the Financial Action Task Force («FATF»). This simplifies reporting obligations to some extent because reporters need not try to identify the types of crime that may have been committed. However, it does mean that all criminal activity that generates funds or other property is caught by both the consent regime and the required disclosure provisions regardless of the gravity of the crime.

4.9 The «all-crimes» approach has led to some unintended consequences. One is the disproportionate burden placed on the legal profession. We outlined Dr Sarah Kebbell's research on the anti-money laundering regime and the legal profession in our Consultation Paper. Kebbell noted that the legal sector tended to make authorised disclosures rather than required disclosures: 75.5% of all legal sector SARs were authorised disclosures seeking consent. There is a perception that a large number of those reports concern minor offences or «regulatory» offences that technically amount to money laundering because of the definition of criminal property. In Kebbell's research, this was identified as problematic as it shifted the focus away from serious crime:

A focus on technical SARs diverts resources away from areas of real money laundering risk. This focus can even foster a division between what is considered by the legal professional to be «real» money laundering, as separate and distinct from «technical» laundering.

4.10 For example, a solicitor executing a high value commercial transaction may identify a regulatory breach or the commission of a low-level offence (such as a copyright licencing infringement or planning law breach). Notwithstanding the non-serious nature of the offence, the solicitor will need to submit an authorised disclosure and seek consent to continue. So, for example, a solicitor may identify that a client has, at some stage, failed to comply with a tree preservation order during the development of a piece of land (a non-imprisonable offence). The transaction would be paused, pending consent from the NCA, resulting in delay and additional costs to all parties involved in the process.

4.11 Moreover, the crime may be historical and the criminal property in question may amount to a pecuniary advantage rather than a tangible asset such as money or property, for instance where an individual may have avoided paying for a software licence. If a person obtains a pecuniary advantage as a result of or in connection with criminal conduct, he or she is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the value of the pecuniary advantage. The reporting of such conduct has a disproportionate effect, because a transaction will be paused pending consent despite the crime potentially being historical and unlikely to require urgent investigation or intervention. This is illustrated in the example below.

Example of a legal sector authorised disclosure:

A solicitor executing a high value commercial transaction may identify a regulatory breach or the commission of a non-imprisonable offence (such as failing to comply with a tree preservation order when building new homes) but which results in a person obtaining a pecuniary advantage. In those circumstances, the solicitor will need to submit an authorised disclosure and seek consent to continue. The transaction would be paused, pending consent from the NCA, resulting in delay and additional cost to all parties involved in the process. The transaction could be delayed for up to 7 days initially, for a further 31 days if the case enters the moratorium period. An application could also be made to extend the moratorium period.

4.12 Stakeholders expressed the view that when reporters submitted SARs for what they perceived to be «technical» compliance, they felt the burden was disproportionate. Some stakeholders queried whether an obligation to file a SAR in every instance where such offending is identified may be disproportionate and whether it might be more appropriate to focus their energies on more «serious» crime, however that term might be defined.

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