Summary

One of the defences to the money laundering offences in sections 327-329 is the making of an authorised disclosure and the obtaining of appropriate consent.

An authorised disclosure (s.338) is a disclosure which is made:

• before a person does the act prohibited by sections 327-329,
• while a person is doing the act prohibited by s.327-329, the act having begun at a point when the discloser did not know or suspect that the property is the proceeds of crime and the disclosure being made on the discloser's own initiative as soon as practicalble after he first knew or suspected that the property is the proceeds of crime, or
• after the act prohibited by s.327-329 and is made on the discloser's own initiative as soon as practicable after the act

Appropriate consent is the consent of a constable, customs officer or SOCA officer to proceed with a prohibited act. (s.335)

A key element of consent is the specification of time limits within which the authorities must respond to an authorised disclosure in circumstances where a consent decision is required. The law specifies that consent decisions must be made within seven working days. If nothing is heard within that time, then the discloser can go ahead with an otherwise prohibited act without an offence being committed. If consent is withheld within the seven working days, then the authorities have a further 31 calendar days in which to take further action such as seeking a court order to restrain the assets in question. If nothing is heard after the end of the 31 day period, then the discloser can proceed with the transaction without committing an offence.

When seeking consent it is important to identify as clearly as possible:

• the suspected benefit from criminal conduct (the “criminal property”), including where possible the amount of benefit
• the reason(s) for suspecting that property is criminal property
• the proposed prohibited act(s) the reporter seeks to undertake involving the criminal property
• the other party or parties involved in dealing with the criminal property including their dates of birth and addresses where appropriate (such information should be held routinely by reporters in the regulated sector in order to comply with the requirements of the Money Laundering Regulations 2003)

All requests for appropriate consent are treated as a priority within SOCA. The aim is to provide the quickest possible response to a reporter. As soon as a decision has been made in relation to a request for consent it will be relayed to the reporter without delay.

The Notice Period

The seven day notice period commences on the day after a disclosure is made. The notice period consists of seven working days and excludes bank holidays and weekends.

The purpose of the seven day notice period is to allow SOCA and its Law Enforcement partners time to risk assess, analyse, research and undertake further enquiries relating to the disclosed information in order to determine the best response to the request for consent. SOCA aims to provide the quickest possible response to the reporter. But some decisions to consent requests will take longer than others.

Notification of Consent

In the first instance, a consent decision will usually be communicated to the reporter by telephone in order to provide the quickest possible response. SOCA will also send a letter by post recording the decision but there is no requirement to wait for this letter in order to proceed with the prohibited act if consent has been granted verbally.

SOCA is mindful of the sensitivity of SARs even within the same organisation and endeavours to communicate only with persons whose details are verifiable by SOCA. Reporters may, therefore, wish to appoint a specified deputy to deal with decisions relating to the consent request in their absence, in order to avoid delays. Details of reporters/MLROs and their deputies, including direct telephone numbers should be registered with SOCA. Registration is available through SAR Online or through forms available on the SOCA website.

When consent is granted by SOCA, the reporter is free to undertake the reported prohibited act(s) without committing a money laundering offence in relation to the act(s). Consent does not extend to any acts or criminal property not detailed in the initial disclosure or agreed with SOCA.

The Moratorium Period

Where SOCA gives notice that consent to an act is refused, a further 31 day period (the “moratorium”) commences on the day that notice is given. The 31 days include Saturdays, Sundays and public holidays. It is an offence to undertake the act during this period as the participant would not have the appropriate consent. The moratorium period enables SOCA to further their investigation into the reported matter using the powers within POCA in relation to the criminal property (e.g. imposing a restraint order). If the moratorium period expires and no such action has been taken, the reporter is free to proceed with the act(s) detailed in the initial disclosure.