Proceeds of Crime

One aspect of ECCTA that will reduce the burden on businesses in the regulated sector is the introduction of two new exemptions to money-laundering offences under the Proceeds of Crime Act 2002. The first enables a firm to return up to £1000 to a customer who it suspects of committing a money laundering offence for the purposes of terminating the business relationship with the customer, without submitting a Defence Against Money Laundering (DAML) to the National Crime Agency. This will simplify the process of closing accounts and terminating existing relationships where a suspicion of money laundering has arisen.

The second new exemption relates to mixed accounts, where a part of the funds is subject to a suspicion on the part of the financial institution that it is criminal property, but it is not possible to identify which part. It enables transfers to be made from the account, without the filing of a DAML, where the value left in the account is at least as much as the amount suspected to represent the proceeds of crime.

While these changes will require review and modification of internal systems and controls, the overall effect should be to reduce the compliance burden relating to smaller incidents of suspected money laundering.

ECCTA also: (i) gives the NCA additional powers to obtain information before a Suspicious Activity Report has been filed; (ii) contains provisions to encourage businesses in the regulated sector to share information with each other that may assist in preventing, investigating or detecting economic crime; and (iii) expressly permits businesses to refer to lists of countries published by the Financial Action Task Force when assessing whether certain countries present a higher risk of money laundering or counter-terrorist financing requiring enhanced due diligence.