International - Written by Barry & Richard on Monday, January 17, 2011 4:19 - 0 Comments
The UK is now tough on white collar: A return to the “good old days” is not on the cards.
At a conference this week The Daily Telegraph reports that Richard Alderman will say:
“We can still consider money-laundering legislation if any part of the contractual sum has passed through the UK,”….”Sometimes it seems to me that people concentrate on corruption law without also looking at our own money-laundering legislation. I think from some of the discussions that I have that there is a potential liability to money-laundering charges that is not always appreciated by corporates and their boards.”
Last year we wrote that the UK money laundering laws were an overlooked part of the SFO’s arsenal when it comes to dealing with corruption and dealt with them comprehensively in the context of the Bribery Act and corruption.
We were surprised that the provisions of the Proceeds of Crime legislation had gone overlooked. It was even more surprising given Mr. Alderman’s comments in February 2010 when he said:
“Which of you would like to go and visit your CEO and CFO in a police station where they are being held following arrest on money laundering charges. Those charges will be based upon decisions by the CEO and CFO on your advice that disclosure will not be made to the SFO and that the benefit of the corruption will therefore be retained within the corporate. I can imagine some difficult discussions.”
These laws are in force now.
Like the new Bribery Act, which has been described in the media as draconian, the UK’s money laundering laws have been described by the courts as “justifiably draconian”.
The SFO and other UK criminal prosecution agencies routinely use the confiscation provisions of the money laundering legislation today. They will enforce anti-corruption laws using the money laundering legislation.
With penalties which in some cases exceed the Bribery Act (14 years in prison instead of 10) the ability to confiscate the full value of a contract (not just the net profit but instead all revenues flowing from it) the UK’s money laundering legislation is a very potent weapon.
While there is no positive obligation imposed on organisations to report corruption under the Bribery Act under the money laundering laws failure to report a suspicion of money laundering results in an offence under Section 328 of the Proceeds of Crime Act. This is something that Directors of every company up and down the land need to be aware of when considering what to do when faced with a question.
We wrote at the weekend that we do not consider that the Bribery Act will undergo any material change as a result of the review when we looked behind the headlines to the real story. However, regardless of this organisations need to take steps now to put in place anti-corruption measures to act as a defence to laws on the books and in force now.
Please do not be lured into a false sense of security by the current media circus surrounding the Bribery Act. Calls for review or suspension will only increase in the run up to April 1.
Organisations need to understand that the UK has ushered in a tough new stance on enforcement and shall use the UK’s existing tough anti-money laundering laws to crack down on corruption and white collar crime.
It is wishful thinking to continue to hope that a return to the old days and the UK’s then (correctly) perceived relaxed stance on white collar crime and corruption is on the cards.
Organisations and the Boards and senior officers of corporates ignore the SFO’s warnings at their peril.
Image © Crown Copyright 2011