On 12 October 2017, the government published the Criminal Finances Act 2017 (Commencement No. 2 and Transitional Provisions) Regulations 2017 (“the Regulations”), which will bring into force several more sections of the Criminal Finances Act 2017 (the “Act”) on 31 October 2017.
The Act received royal assent on 27 April 2017. It contains various measures intended to “tackle money laundering and corruption, recover the proceeds of crime and counter terrorist financing”. For more information, see our blog post here.
The first commencement regulations under the Act were introduced on 13 July 2017, and brought into effect the “failure to prevent the facilitation of tax evasion” offences from 30 September 2017. For more information on these offences, please see our blog post here.
The Regulations provide for the coming into force of a number of sections of the Act, including the changes to the Proceeds of Crime Act 2002 in relation to aspects of the suspicious activity reports (“SARs”) regime:
Extended moratorium period: A person making a SAR may request “appropriate consent”/a defence against money laundering from the National Crime Agency (“NCA”) to carry out a transaction. Currently, if the NCA refuses consent, the entity is subject to a moratorium period of 31 days, at which point deemed consent applies. From 31 October 2017, a senior officer (as defined) will be able to apply to the Crown Court to increase the moratorium in up to 31 day increments, up to a total of 217 days. It remains to be seen how frequently this provision will be used, but companies should be mindful of the potential challenges inherent in delaying a transaction for this length of time, and in avoiding tipping off the subject of the SAR in the moratorium period.
Information sharing: The Regulations also provide for the coming into force of the Act’s provisions relating to a new procedure for information sharing in the regulated sector. Provided a notification has been made to the NCA, regulated entities will be able to share information relating to suspected money laundering with each other for the purpose of developing a joint disclosure report to the NCA (known as a “super SAR”). This is intended to: (i) allow regulated entities access to more information before jointly submitting a SAR (and therefore the super SAR should, in theory, be more detailed than if each entity provided an individual report); and (ii) ease the administrative burden on the NCA by reducing the number of reports it will be required to process. The process is voluntary, and is subject to a number of detailed conditions, which may limit its usefulness outside certain defined circumstances (such as JIMLIT).
Other: Other provisions being brought into force at this time include section 12 of the Act (a power for the magistrates’ court to make Further Information Orders following a SAR), section 15 (new forfeiture powers), section 17 (certain amendments to SFO powers), and amendments to the SARs provisions of the Terrorism Act 2000 corresponding to those referred to above in relation to money laundering.