Money laundering - Written by on Thursday, February 17, 2011 4:04 - 0 Comments

Richard Alderman, Director of the SFO: POCA Face? The importance of the Proceeds of Crime Act (POCA)

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Last Friday we met with Richard Alderman, Director of the SFO at the SFO’s offices in Elm Street, to discuss a number of matters. 

One item on our agenda was the use of the UK money laundering legislation under the Proceeds of Crime Act (POCA) in the context of corruption cases.

We have always been surprised about lack of commentary on POCA and the Bribery Act. It is doubly surprising since it is used as a matter of course in UK criminal proceedings including by the SFO.

In an effort to raise awareness of the likely use of POCA among advisers and organisations we wrote about it on this site  shortly after we launched and have also guest posted on it on the FCPA blog

When we met with Mr. Alderman on Friday he confirmed his intention to use the POCA in the context of corruption cases and told us he shared our surprise that not much has historically been said about the application of POCA in the context of corruption cases and the Bribery Act.

It is clear that the SFO intend to use POCA in this context. 

Yesterday’s announcement by the SFO that it has indeed done so, in relation to M.W. Kellogg Limited (MWKL) who have been ordered to pay just over £7 million in recognition of sums it is due to receive and which were generated through the criminal activity of third parties, therefore comes as no surprise to us.

The SFO press release on MWKL notes that MWKL took no part in the criminal activity which generated the funds and that the funds due to it are in fact share dividends payable from profits and revenues generated by contracts obtained by bribery and corruption undertaken by MWKL’s parent company and others. 

It is a good example of the wide net of the POCA legislation.

However, the POCA legislation can be used much more aggressively if there is unreported suspicion (which is under UK law an extremely low threshold to get over) about the origin of assets.  

Importantly potential penalties under POCA are more severe than those under the Bribery Act.  Think 14 year maximum tarriff sentences for individuals (i.e inlcuding directors) instead of 10 years under the Bribery Act.

POCA is in force today.  Do you fully understand how it might apply?

Image © Crown Copyright 2011

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