The UK Government introduced the Criminal Finances Bill to Parliament today (13 October 2016), which will now start its passage through the parliamentary approval process before becoming law.
The Government hopes that the Bill “will significantly improve the government’s ability to tackle money laundering and corruption, recover the proceeds of crime, and counter terrorist financing”, and describes it as “a key element of one of the most significant changes to our anti-money laundering and terrorist finance regime in over a decade.”
The Bill will make major changes to existing law and will introduce an array of new enforcement powers and safeguards, which we summarise below.
One aspect that is of interest is actually what the Bill does not do. The UK Government had in May of this year announced plans to extend corporate criminal liability to hold companies criminally liable for failing to prevent fraud and money laundering.
Many anticipated that this Bill would implement those plans. It does not, and we expect that this omission will form part of the debate that will shape the Bill.
What the Bill will do is:
- Introduce a criminal offence for corporations who fail to stop their staff facilitating tax evasion, which will have global reach. The defence to this will be either for the corporate to have “prevention procedures” in place that would be reasonable to expect it to have or for the corporate to show that it is not reasonable to expect it to have any prevention procedures.
- Enable seizure and forfeiture of the proceeds of crime that are stored in UK assets, extending current law to include value stored in bank accounts and high-value property
- Create “unexplained wealth orders”, which would require those suspected of corruption to explain the sources of their wealth to enforcement agencies.
- Enable the sharing of information between regulated companies, helping to ensure that they provide the best possible intelligence for enforcement agencies to investigate.
- Introduce new powers to assist enforcement agencies investigations into money laundering, including a power to extend the moratorium period in which Suspicious Activity Reports (SARs) can be investigated and giving the UK’s National Crime Agency new powers to request information from regulated companies.
- Permit investigating agencies to pursue “Disclosure Orders” for money laundering investigations, which powers already exist for corruption and fraud investigations. A Disclosure Order requires someone suspected of possessing information relevant to an investigation to provide information to an enforcement agency.
We will continue to track the progress of the Bill and provide further analysis in the weeks and months to come.