When introducing the Criminal Finances Bill in October of last year, the government announced that it would significantly improve the ability:
- to tackle money laundering and corruption
- recover the proceeds of crime and
- counter terrorist financing
The Bill, promised in the 2016 Queen’s speech, purports to meet these ambitions by focusing on four key categories.
1. Improving the recovery of the proceeds of crime including international corruption.
As presently drafted the Bill:
- would permit seizure and forfeiture of the proceeds crime that are stored in UK assets, extending current provisions to include value stored in bank accounts and high-value property, such as precious metals and jewels; and
- creates unexplained wealth orders requiring those suspected of corruption to explain the sources of their wealth, helping to facilitate the recovery of illicit wealth and stopping criminals using the UK as a safe haven for the proceeds of international corruption. These unexplained wealth orders will be the subject of a separate article in due course.
2. Information Sharing between Public and Private Sectors
The Bill enables information sharing between regulated companies with a view to maintaining the best possible intelligence for investigation by law enforcement agencies.
Coupled with this development is the intention to strengthen the SAR regime by providing a power to extend the moratorium period. In addition, the NCA may obtain new powers to request information from regulated companies.
3. Criminal Offences of failing to prevent tax evasion together with enhanced regime for disclosure orders in money laundering investigations
The Bill creates a new offence for corporations and partnerships which fail to prevent their staff committing tax evasion offences or tax evasion facilitation offences in order to hold corporations/partnerships to account for their employees’ actions. The intention is clearly to ensure that, at board level, corporations enact robust global compliance regimes.
The Bill also strengthens law enforcement’s hand in money laundering investigations. Persons suspected of possessing relevant information to a money laundering investigation will be required to provide it by compulsion.
4. Continuing combating of terrorism finance
Changes to the law are set out which are aimed at combatting terrorism funding through vulnerable sectors of the regulated sector. Additional powers will be created that will permit investigation and enforcement in relation to investigations pursuant to the offences created by the Terrorism Act 2000.
The Criminal Finances Bill Progress
The Criminal Finances Bill is presently (March 2017) at the House of Lords Committee stage. As is usual in this jurisdiction in recent times, such amendments that have been made to the Bill have served only to make the original provisions bite harder and more widely. It is plain that the government means business – and particularly for corporates/partnerships with the intention of holding them to account.
In practice, however much will turn on law enforcement resourcing. In a recent Transparency International Report, Duncan Hames (Director of Policy TI-UK) noted:
“..the issue of corruption [is] centre-stage, and also the presence of the proceeds of corruption here in the UK. The new legislation, including Unexplained Wealth Orders, should increase the recovery of illicit assets, and ultimately their return to benefit the people from whom they were stolen. However, to achieve this, law enforcement needs the independence and resources to pursue cases and information from the promised register of the true owners of British real estate held in the names of overseas companies.”