Money Laundering laws have been in place in the USA for many years. They are significantly different from the laws in many other parts of the world (1). The US laws have an undue prominence because of the predominance of US originated television and fictional works.

Also, most of the published writing on the subject of money laundering has originated in the USA. This is largely because the USA has all the exciting stories: the reality of money laundering is that it relates to the proceeds of all crimes but it is fashionable to relate it to the more colourful activities of drug dealers. So entire television series will revolve around the sun and sand of vice in Miami and documentary makers will visit the Caribbean. (2)
Money Laundering is a simple process, but unless it is done, criminals face a higher risk of capture.

This book is needed for several reasons: at the time of writing (3) there is no easy to understand guidance on the UK law: even the Home Office has not, nearly two years after the law was brought in to effect, produced guidance notes for enforcement agencies, prosecutors and the Courts (4). Even Stones’ Justices Manual - the book without which magistrates’ courts and many law offices would grind to a halt - quotes the statutory provisions but makes, possibly uniquely, no significant additional comment on this area of law.

There are, I think, three (5) books on the UK market dealing, in part or obliquely, with the UK’s money laundering laws. They have a different market to this work.

This book is the first published in the UK to deal extensively yet simply with how criminal money is generated, how it is laundered, what the UK laws mean, how you need to comply with them and how to implement the changes within your organisation.

In this book we will look at a number of issues: we will define money laundering; we will assess the different systems of law; we will look at whether you or your organisation and its employees are at risk - both from criminals and the law - and give you guidelines on how to assess that risk.

We will make particular reference to those organisations which have special risk and those who have express responsibilities created by the law. We will also look at how to identify money laundering and show what to do if you suspect it is happening in your organisation. We will also look at how you face a risk of prosecution merely for knowing someone else may be involved in money laundering.

We will examine the change of business culture forced on your business by the laws.

In a book of this length, we will not be able to look in at the special powers which the Police and others have where money laundering is suspected but we will examine the provisions which make it impossible to assume that anyone - banker, doctor, priest or lawyer - can or even may be willing to keep your business or personal affairs confidential.

But there is one thing you can be sure of: this is a business management book not a law book. Or perhaps, to misquote from a Star Trek character “It’s a law book, but not as we know it”. I hope it is also, generally, an interesting book to read in its own right.

The law in the UK alone is found in several different sources. Internationally, most Governments who are addressing the issues are trying to keep the legislation together. Although the UK law is based in European law, it is UK law which is forming the basis of laws across the world. The British Commonwealth is beginning to address the issue and has in preparation a Model Law which will be available to Commonwealth nations to use as a menu selection: choosing those provisions which fit with their national law. That Model Law has much in common with Australian Law.(6)

There are concepts being drawn from a wide range of laws, international and domestic, civil and criminal. The UK law is the first law, other than emergency powers, which requires any British Citizen (indeed, any resident) to report to the authorities not just actual knowledge that a person is involved in a crime but also suspicion. Failure to make such a report is a criminal offence and the person who does not make a report can, depending on the precise circumstances, face up to 14 years in gaol.

The seriousness with which the Government views this issue is shown by the fact that sentences carry no remission: a person who is sentenced to 14 years will actually serve 14 years.

That is more than a person who commits murder.

It is interesting to note that the penalty for some offences is the same as that available for the more widely known offence of handling stolen goods.

The reason that this issue is treated so seriously is that the authorities world-wide are concerned that they are losing the global fight against international crime. Ironically, there is evidence that there is at present little organised crime in the UK. But there is a fear that international criminals have realised that in order to bring organised crime to the UK they have little criminal opposition and, basically, only to deal with the authorities - authorities who have relatively small amounts of money and manpower. As a result they may find the UK a good place to be.

Organised crime is all about doing business. It is simply that the business is illegal. Often, organised crime groups invest in legitimate businesses and they are able to hide their proceeds of criminal activity within their legitimate takings. It is known that there are a number of organised crime groups operating in the UK and the authorities are anxious to prevent them expanding their influence.

Increasingly, the authorities are using counter-espionage techniques such as infiltration and surveillance and even entrapment. In the UK, MI5, the intelligence agency which deals with internal security, is to be assigned the role of fighting organised crime - partly because, in the light of near global peace, there is less for them to do but also because they are less accountable for their actions than are the police.

Organisations will find that positions will be filled by highly trained security personnel who are charged with the investigation of activity, witting or not, within that organisation.

This may sound far fetched but it is known that infiltration of the organisation is an objective of organised crime groups. It is known that the Police and Customs and Excise place people in positions without the knowledge of the employer. In the case of the authorities, this is generally for the purposes of gathering information but it might also be for the purposes of securing evidence leading to a prosecution.