The Proceeds of Crime Act 2002 (POCA) is the cornerstone of the UK’s anti-money laundering legal framework. It creates the primary criminal offences, establishes the reporting regime, and gives law enforcement the tools to recover assets generated by crime.
The three principal offences
POCA 2002 creates three money laundering offences in sections 327–329:
- Concealing (s.327): concealing, disguising, converting or transferring criminal property, or removing it from the UK.
- Arranging (s.328): entering into or becoming concerned in an arrangement which facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person.
- Acquisition, use and possession (s.329): acquiring, using or having possession of criminal property.
“Criminal property” means property that constitutes or represents a benefit from criminal conduct, where the person knows or suspects that it does. The offences apply to any person, not just regulated firms. A person in a financial services firm who processes a transaction knowing or suspecting it involves criminal property commits a POCA offence.
The SAR regime
POCA establishes the suspicious activity report (SAR) regime. A person in a regulated sector who knows or suspects, or has reasonable grounds to know or suspect, that another person is engaged in money laundering must submit a SAR to the National Crime Agency via the UKFIU. Authorised disclosure (submitting a SAR before proceeding with a transaction) provides a defence against the arranging offence.
Tipping off
Section 333A of POCA makes it a criminal offence to tip off a person that a SAR has been submitted or that a money laundering investigation is underway, where that disclosure is likely to prejudice the investigation. This applies once a disclosure has been made or an investigation has begun.
Training implications
Relevant employees in regulated firms must understand the three POCA offences, the SAR regime and the tipping-off prohibition. The AML training requirements guide covers what the MLR 2017 and POCA obligations mean for a firm’s training programme.