The End of Money‐Laundering Prosecution in the City?

Abstract

Money laundering is established as a criminal offence and, to date, the prosecution of money laundering has been the responsibility of the Criminal Prosecution Service (CPS) and the Serious Fraud Office (SFO). However, the Financial Services and Markets Bill will provide the Financial Services Authority (FSA) with the power to bring a prosecution for offences under the Money Laundering Regulations. This may result in some confusion as to who should prosecute, particularly as it is established that all three bodies cannot prosecute the same crime since this would allow the defendant to claim double jeopardy. It should be noted that the FSA has stated that it will only prosecute for failing to maintain adequate controls against money laundering and that prosecutions for money laundering itself will be left to the criminal prosecution authorities. Despite this limitation there will still be an overlap between offences that the CPS, SFO and FSA may prosecute. The situation is further clouded, as the FSA will also be able to undertake a disciplinary action. A disciplinary action for money laundering has not been specifically mentioned in the Financial Services and Markets Bill. However, the FSA is most likely to introduce an and money‐laundering statement of principle, particularly as the reduction of financial crime is one of the objectives of the FSA. If a regulated person or institution is found to breach this, they will be subject to a penalty imposed under disciplinary proceedings. In addition, a blanket provision of ‘misconduct’ would also trigger the imposition of a penalty. Therefore, the possibility arises of a criminal prosecution by the FSA for failing to maintain adequate controls against money laundering, a prosecution by the CPS or SFO for money laundering itself and for failure to maintain adequate controls as well as an FSA disciplinary action.

Citation

Chan, M. (1999), "The End of Money‐Laundering Prosecution in the City?", Journal of Money Laundering Control, Vol. 3 No. 2, pp. 128-131. https://doi.org/10.1108/eb027222