Понедельник, 12 августа 2019

7. Introduction. Evaluation of the current law

Chapter 7: Reasonable Excuse


7.1 In chapter 3, we set out our recommendations in respect of statutory guidance. In this section, we examine how statutory guidance on reasonable excuse could be used to support our overall objective of improving the prevention, detection and investigation of money laundering and terrorist financing by reducing the scope of unnecessary and unhelpful reporting.

The current law

7.2 As we discussed in chapter 4, reporters have an obligation under the Proceeds of Crime Act 2002 («POCA») to disclose a suspicion of criminal property or a suspicion that another person is engaged in money laundering subject to specific exemptions and defences. In relation to both the principal money laundering offences and the disclosure offences, a reasonable excuse defence is provided for in POCA.

7.3 First, a money laundering offence will not be committed if a reporter makes an authorised disclosure and obtains appropriate consent in accordance with the exemption. If the reporter fails to make an authorised disclosure and obtain appropriate consent, the individual reporter could rely on a reasonable excuse defence for not making such a disclosure. Sections 327 to 329 provide that if the individual intended to make such a disclosure but had a reasonable excuse for not doing so, an offence would not be committed.

7.4 Secondly, the same defence exists in relation to the disclosure offences, although it is expressed differently. Under sections 330 to 332, the individual would not commit an offence if he or she had a reasonable excuse for not making the required disclosure.

Evaluation of the current law

7.5 In the next section, we will summarise some of the problems that arise from the breadth of the United Kingdom's reporting obligations. We will then set out the different sets of circumstances that we provisionally proposed might amount to a reasonable excuse not to make a disclosure and could therefore be included in statutory guidance. We will go on to consider how consultees responded to the substantive proposals in our Consultation Paper. Finally, we will outline our recommendations for reform.

7.6 We observed in our Consultation Paper that the combined effect of a low reporting threshold (suspicion), an «all-crimes» approach and a broad definition of criminal property is to capture a wide range of activity which banks and businesses are required to report, backed by the threat of criminal sanction. We had pre¬consultation discussions with reporters, those who represent them and law enforcement agencies. They identified a number of situations triggering authorised disclosures (DAML SARs) that generate little intelligence or useful raw data, but which still impose a burden on resources to report. Presently there is no means of exempting categories of case from the reporting obligation even in circumstances where both the reporter and the UKFIU consider that it is unlikely to be useful.

7.7 In our Consultation Paper, we explained that stakeholders with reporting obligations felt that there was scope to take greater responsibility for the quality of disclosures by making common sense judgements about the usefulness of a report. Stakeholders told us that there was a gap between the legislative provisions and industry guidance on what may constitute a «reasonable excuse». Sector-specific guidance differed in the way it approached the reasonable excuse defence which made it difficult for reporters to make a sensible judgement on whether to make a disclosure with sufficient confidence. This lack of confidence, in their view, created significant numbers of unhelpful or low intelligence value disclosures.

7.8 A number of examples illustrate this point. For instance, many stakeholders argued that in relation to low value transactions, the burden of reporting was disproportionate to the value of intelligence gleaned and should not result in an authorised disclosure obligation. Additionally, a substantial number of consultees saw no benefits from lodging authorised disclosures in relation to funds which were moved internally within a bank solely for administrative reasons. Likewise, few considered it to be beneficial for duplicate reports to be lodged with the UKFIU, for example where a fraud was committed and reporters also reported the crime directly to Action Fraud.

7.9 We provisionally proposed that statutory guidance should be issued to provide examples of circumstances which may amount to a reasonable excuse for not making a disclosure to the UKFIU. Statutory guidance would assist reporters in making important decisions on how best to comply with their obligations under POCA. We focussed exclusively on authorised disclosures as they are more resource intensive for both reporters and the FIU and are time-sensitive. However, our provisional proposal was that in all these instances a required disclosure would still be made. This would have a number of significant benefits. First it would ensure that time was not devoted to processing authorised disclosures which are necessarily generated because of the breadth of the current legislation but are, in fact, of little intelligence value. Secondly, it makes the system more proportionate as the subjects of such marginal disclosures will not be denied access to funds pending a decision on consent. Thirdly, it stops law enforcement agencies apportioning time and resources to considering these disclosures where action is unlikely to follow as a result. Finally, it prevents unnecessary duplication of work. In our Consultation Paper we set out a non- exhaustive list of the types of authorised disclosure which, it was generally agreed by stakeholders, generated low intelligence value. The list was as follows: 

(1) low value transactions;

(2) internal movements of funds within a bank or business with the intention of preserving criminal property;

(3) duplicate reporting;

(4) information in the public domain;

(5) property transactions within the UK;

(6) multiple transactions on the same account or related transactions such as those relating to the same individual or business;

(7) repayments to victims of fraud;

(8) historical crime;

(9) transactions with no UK nexus; and

(10) disclosures instigated by law enforcement agencies.

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