Пятница, 02 августа 2019

3. Consultation


3.26 Consultees were overwhelmingly in favour of statutory guidance. Their responses can be broken down as follows:

(1) In relation to statutory guidance on suspicion, 28 out of 32 consultees were in favour of our provisional proposal; in other words, 87.5% of those who responded agreed that it would be beneficial. Likewise, if the threshold for reporting were amended to one requiring reasonable grounds to suspect, 27 out of 30 consultees who responded were in favour of statutory guidance; amounting to 90% of consultees who answered this question.

(2) On the reasonable excuse defence, 36 out of 40 consultees who responded were in favour of our broad provisional proposal that statutory guidance should be issued; this amounts to 90% of consultees who answered this question.

(3) In relation to our provisional proposal on issuing statutory guidance on appropriate consent, 26 out of 30 consultees were in favour of our proposal: 87% of consultees who answered this question.

3.27 In terms of individual responses, the National Crime Agency («NCA») were open to statutory guidance stating:

We are willing to explore, with policy departments, the development of a single, comprehensive, authoritative source of guidance (developed by Government, regulators, UKFIU and reporters) if that would drive up the clarity and consistency of SAR reporting.

3.28 The FCA agreed that statutory guidance would be welcomed by many reporters and observed that it has the merit of being more flexible and easier to update than definitions set out in law. The FCA did note that they had some doubts about the practicalities of providing guidance on many aspects of the SARs regime but were in favour in principle.

3.29 The Metropolitan Police Service («MPS») agreed that it would be beneficial for the UK to develop a single authoritative source of guidance supported by continuing education:

Collective learning and training should be considered alongside any authoritative document produced, to provide clarity and enhance the quality of reporting and the regime.

3.30 Only a small number of consultees, queried whether statutory guidance was the right approach at all. For example, The Association of British Insurers («ABI») suggested that consideration should be given to whether guidance issued by supervisors would be more beneficial than guidance issued by the Government. Tristram Hicks (former Detective Superintendent on the national Criminal Finance Board) in collaboration with Ian Davidson (former Detective Superintendent with national financial investigation responsibility) and Professor Mike Levi of Cardiff University suggested that the Joint Money Laundering Steering Group («JMLSG») would be best placed to issue such guidance.

3.31 Of those consultees who agreed with our provisional proposal that statutory guidance should be issued, there was a general consensus on three key points:

(1) there should be a single source of definitive guidance on the law;

(2) guidance should be produced in consultation with the reporting sector and law enforcement agencies; and

(3) compliance with guidance should provide reporters with a defence to a criminal offence under Part 7 of POCA («safe harbour»).

Single definitive source

3.32 Many of those in favour of statutory guidance noted that having a single authoritative document, applicable to all sectors, which covers the key concepts underpinning the reporting of suspicious activity would promote greater consistency in the application of POCA. Those opposed to statutory guidance commonly felt that there was a risk it could become too prescriptive and replace a risk-based approach.

3.33 Overall, consultees were attracted by the proposal for a single source of definitive guidance on the law. For example, the ABI stated that:

One set of guidance will improve consistency of application and make for a more effective SAR regime with improved quality of reports. Greater clarity would help to reduce the volume of low-quality SARs.


3.34 UK Finance favoured a collaborative partnership between the public and private sector to shape a single source of definitive guidance:

Some members thought this requirement should be mandated to the Secretary of State, but whatever mechanism is used, members were strongly of the view that it would be more useful to reporters if it was developed in discussion with the private sector to allow it to effectively addresses areas where there is a lack of clarity. If undertaken in consultation with the private sector, as described above, this would promote better quality SARs and reduce low value SARs.

In developing any guidance (and more generally), the utility of reports is likely to improve if the private sector had more insight into what is suspicious to the law enforcement agencies as those agencies see a broader picture of criminal activity. This role could potentially be one for the new National Economic Crime Centre. Subject to resourcing issues at the Financial Intelligence Unit («FIU»), some members would also welcome more direct feedback on the utility of their reports.

3.35 The Association of Accounting Technicians («AAT») agreed that any guidance would benefit from a broad range of input:

A joint consultative approach might result in better outputs as it would take into account the views of all affected parties providing definitions based on practical experience, and ensuring buy-in across the sectors.

3.36 The ABI also supported a joint approach to the drafting of guidance. They submitted that consultation during the drafting process would be crucial to ensure that guidance reflected accumulated expertise in identifying suspicious behaviour.

3.37 Dickinson Minto highlighted the need for a more collaborative approach in the future:

Moving forward, a greater dialogue between the regulated sector and the NCA should be encouraged. This would, no doubt, both reduce the quantity and improve the quality of SAR reporting.

3.38 The British Private Equity and Venture Capital Association («BPEVCA») also agreed that consultation with the reporting sector was vital. They proposed that any indicative lists should be provided in consultation with industry prior to publication.

Safe harbour

3.39 Freshfields Bruckhaus Deringer was strongly of the view that guidance would need to be statutory in order to achieve the desired impact:

We agree with the Law Commission that the Government should produce guidance on the suspicion threshold. We recommend, in particular, compiling a list of indicative factors which might contribute to, or detract from, a finding that there is suspicion of money laundering.

For guidance to have the most significant impact for both intelligence agencies and reporting institutions, it should be placed on a statutory footing and there should be a clear basis in law for relying on the guidance when interpreting the provisions of POCA. Compliance with guidance should not be mandatory, but compliance with the guidance should provide a safe harbour against potential sanctions/liability for those entities that do choose to comply.

3.40 In relation to the form any guidance should take, Dickson Minto submitted that guidance similar to that issued in relation to the Bribery Act 2010 would be helpful:

We note that the Bribery Act 2010 is, like POCA, drafted in broad terms but it is accompanied by useful guidance. POCA is not supplemented by any guidance at all. This should be remedied as part of this consultation process. The guidance could deal with both interpreting the meaning of suspicion as well as providing additional assistance on what the NCA is hoping to receive in terms of SAR reporting.

3.41 While the Proceeds of Crime Lawyers Association («POCLA») welcomed one source of definitive guidance, there was concern that it may not achieve its objectives due to the continued risk of criminal liability for individuals who fail to report:

Presumably, the intention is to protect some of those who fail to report (or who commit what would now be prohibited acts in relation to property that is or represents the proceeds of criminal conduct), and thereby reduce the volume of SARs. Clearly, such guidance has the potential to create problems as well as solve them, so the detail would be important. It has to be acknowledged that the requirement to make a report based on suspicion is an international requirement, but the sanction of criminal liability is not. As the sanction for not making a report in the UK is criminal liability and a sentence of imprisonment, reporters will continue to make reports on tenuous grounds.

Statutory guidance which replaces the plethora of conflicting material is to be welcomed, but it is naive to think it will make much practical difference. We believe the better solution is to remove the requirement to make a report from the criminal law completely. Reports of suspicions should be made a regulatory requirement. Then the mental element of the substantive money laundering offences can be converted to knowledge or belief, without impacting significantly on the obligation to make disclosure of suspicious transactions.

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