1. ‘Money Laundering’ Professor Nicholas Ryder
Bristol University
Monday 29th January pm

2. Introduction What is money laundering? The history of money laundering
The global scale of money laundering
How is money laundered?
Where does money laundering occur?

3. Introduction A global money laundering policy
United Kingdom money laundering policy
Recent Developments
Conclusions

4. What is money laundering?
Money laundering is:
the illegal process or act,
by which these individuals or groups attempt to,
disguise, hide or distance them from their illegal activities.

5. What is money laundering?

6. What is money laundering?
How is money laundered?
Where is money laundered?
Financial institutions,
Virtual currencies,
Property transactions,
Cash intensive businesses,
Mobile devices,
Cash couriers or money mules,
Professional services providers such as lawyers, accountants and financial advisors
Everywhere!
Caribbean,
Europe,
Asia Pacific,
Middle East,
Africa,
North and South America.

7. The scale of money laundering
Global Estimates
United Kingdom
Between 2 and 5 % of Global GDP (IMF, 1998),
Between $590bn and $1.5tn per year (FATF, n/d),
$1.6tn (United Nations Office on Drugs and Crime, 2009) and
There is no visible data on the amount of money laundered.
Financial Services Authority: £23-£57bn,
HM Treasury: £10bn,
National Crime Agency: £36bn-£90bn,
Harvey between £19-48bn,
Transparency International £49bn.

8. A global AML policy
Implementation of international legal AML instruments
Recognition and implementation of international best practices and industry guidelines
The adoption of a risk based strategy
Creation of AML authorities
Criminalisation of money laundering
Mutual legal assistance
Preventative measures
Confiscation of the proceeds of crime

9. International Institutions
United Nations
European Union
Vienna Convention (1988)
Criminalised money laundering of proceeds of drug trafficking
Palermo Convention (2000)
Criminalised money laundering of serious criminal offences
Corruption Convention (2003)
Criminalised the laundering of the proceeds of bribery and corruption
Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime (1990),
the Warsaw Convention (2005)
Four Money Laundering Directives (1991, 2001, 2005 and 2015)

10. International Institutions
Established in 1989
The 40 recommendations are not legally binding
Sanctions can be imposed on countries that fail to follow the recommendations
Remit extended to include terrorist financing since 9/11 (9 Special Recommendations)
Extended in February 2012 to include bribery and corruption

11. The United Kingdom
The implementation of the UK policy is divided as follows:
Primary Competent Authorities
Secondary Competent Authorities
Tertiary Competent Authorities (Ryder, 2012)

12. The UK Legislative Approach
The current money laundering legislation is:
Part 7 of the Proceeds of Crime Act 2002
Terrorism Act 2000
Crime and Courts Act 2013
The Money Laundering Regulations 2017
Criminal Finances Act 2017

13. Criminalisation Proceeds of Crime Act 2002 Terrorism Act 2000
Concealing the proceeds of criminal conduct (s.327)
Assisting another to retain the benefits of criminal conduct (s.328)
Acquisition, use and possession of the proceeds of crime (s.329)
Fund-raising (s.15)
Use and possession (s. 16)
Funding arrangements (s. 17)
Money laundering (s. 18)
Disclosure of information: duty (s. 19)
Disclosure of information: permission (s. 20)

14. The Money Laundering Regulations 2017
A wide range of institutions must apply customer due diligence measures where they suspect the transaction concerns money laundering or terrorist financing
This means that the firm is required to authenticate the identity of the customer and monitor their business relationships
If a firm suspects that it is being used for the purposes of money laundering, it is required to notify its Money Laundering Reporting Officer (MLRO)
Complete a suspicious activity report (SAR) and file it with NCA, who determines if further action is to be taken

15. The Money Laundering Regulations 2017
What is by knowledge?
How do you define suspicion?
Actually knowing something to be true,
Knowledge can be inferred from the surrounding circumstances,
The knowledge must, however, have come to the firm (or to the member of staff) in the course of business
R v Da Silva [2006] EWCA Cro,
K v National Westminster Bank, HMRC, SOCA [2006] EWCA Civ 1039.
Shah v HSBC Private Bank (UK) Ltd. [2010] EWCA Civ 31; [2010] Lloyd’s Rep F.C. 276 (CA (Civ Div).

16. The Money Laundering Regulations 2017
Defensive Reporting:
In 2008, SOCA reported that it had received 210,524 SARs;
increased to 240,582 in 2010,
247,601 in 2011,
278,665 in 2012,
316,527 in 2013,
Defensive Reporting
354,186 in 2014
381,882 in 2015
634,113 in 2017.
See NCA (2017)

17. Enforcement/Sanctions
FCA have adopted a credible deterrence strategy:
imposing financial sanctions on individuals and firms (s.206(1) FSMA 2000) and
Prosecutions (s. 402 FSMA 2000)

18. Enforcement/Sanctions
MLRO
Bank
Michael Wheelhouse was fined £17,500 (October 2008)
Sudipto Chattopadhyay fined £14,000 (May 2010)
Syed Itrat Hussainn £17,500 (May 2012)
Coutts & Company £8.75m (March 2012)
EFG Private Bank £4.2m (March 2013)
Standard Bank Plc £7.6m (January 2014)
Deutsche Bank £163m (January 2017)

19. Recent Developments Criminal Finances Act 2017
the ability to investigate the proceeds of crime,
provisions to improve the use of suspicious activity reports (SARs),
obligations to enhance the confiscation of the proceeds of crime,
instruments to tackle the facilitation of tax evasion and
amendments to the counter-terrorist financing legislative (CTF) framework.

20. The Sanctions and Anti-Money Laundering Bill 2017
The Bill seeks to ensures that when the UK leaves the EU, the UK can continue to impose, update, and lift sanctions and AML regimes.
The UK needs to be able to impose and implement sanctions in order to:
comply with our international obligations, including those under the United Nations (UN) Charter
support foreign policy and national security goals

21. Conclusions International cooperation not sufficient
Too many vulnerable governments have not criminalised all forms of money laundering
International cooperation not sufficient
Laws and regulations fail to keep pace with new ways to launder money

22. Suggested Reading P. Alldridge Money Laundering Law (Hart 2003).
M. Gallant Money Laundering and the Proceeds of Crime – Economic Crime and Civil Remedies (Edwards Elgar 2005).
N. Ryder Money laundering – an endless cycle? A comparative analysis of the anti-money laundering policies in the United States of America, the United Kingdom, Australia and Canada (London 2012),
B. Unger B The Scale and Impacts of Money Laundering (Edwards Elgar 2007),

23. Suggested Reading
Campbell, L. ‘Dirty cash (money talks): 4AMLD and the Money Laundering Regulations 2017’ (2018) Criminal Law Review, 2, ,
Herlin-Karnell, E. and Ryder, N. ‘The robustness of EU financial crimes legislation: a critical review of the EU and UK anti-fraud and money laundering scheme’ (2017) European Business Law Review, 28(4), ,
Cheung, R. ‘Money laundering - a new era for sentencing organisations’ (2017) Journal of Business Law, 1,