Criminal Finances Bill

Friday 02 December 2016

The Criminal Finances Bill was introduced to the House of Commons on 13 October 2016 with the aim of improving the Government’s ability to tackle money laundering and corruption, recover the proceeds of crime and counter terrorist financing.

In 2016 the Government published the National Risk Assessment for Money Laundering and Terrorist Financing. The document identified a number of risks and areas which could be strengthened. 

Earlier this year, the Action Plan for Anti-Money Laundering and Counter-Terrorist Finance was published by the Government. The introduction of the Criminal Finances Bill coincides with the Government’s stance that they will not stand for money laundering or the funding of terrorism through the UK.

NAEA has engaged with the Government throughout the development of its proposals, including meeting with the Home Office, HM Treasury and the Department for Business Innovation and Skills (as was called until July 2016) to discuss how the Government’s Anti-Money Laundering and Terrorist Finance regime impacts on estate agents. 

Key elements of what the Government are proposing through the Criminal Finances Bill include:

Unexplained Wealth Orders
Unexplained Wealth Orders will mean an individual or company will have to explain the origin of assets that appear to be disproportionate to their known income and if they are suspected of involvement in, or association with serious criminality.

Disclosure Orders
A Disclosure Order can require any person considered to have information relevant to an investigation to answer questions, provide information or to produce documents. The Bill will create Disclosure Orders for money laundering investigations and will also simplify the existing process to make it easier for law enforcement agencies to use.

Power to obtain further information and extend the SARs moratorium period
Where an organisation in the regulated sector suspects that they may commit a money laundering offence, they are obliged to submit a Suspicious Activity Report (SAR) to the National Crime Agency, seeking consent to proceed.

The Bill proposes a power to extend the moratorium period to enable law enforcement agencies to gather the evidence necessary to secure a restraint order or other intervention; and a power for the UK Financial Intelligence Unit to obtain further information from SARs reporters. 

Information sharing
The Government sees public-private partnership as central to tackling money laundering and terrorist financing. The Bill therefore proposes measures to enable firm-to-firm information sharing through a legal gateway, with the aim of encouraging the reporting sector to share information to detect and prevent money laundering and terrorist financing.

Seizure Powers
The Bill will give law enforcement agencies new powers to seize and forfeit precious metals, precious stones, watches, artistic works, face-value gift vouchers and postage stamps, where they have grounds to suspect that they are the proceeds of crime, or are being used to commit further offences; and freeze and forfeit the proceeds of crime held in bank accounts. The Government also plan to amend the existing cash seizure provisions to allow seizure gambling chips and ticket-in-ticket-out vouchers.

Amending the Proceeds of Crime Act (POCA)
The Bill contains a number of legislative changes to the Proceeds of Crime Act 2002 that include providing HM Revenue and Customs and the Financial Conduct Authority with powers to seek the civil recovery of property before the High Court.

The Criminal Finance Bill will next be considered at Report Stage and Third Reading. If you have any comments about any aspects of the Bill please contact Tim Douglas, NAEA Policy and Campaigns Officer timdouglas@naea.co.uk.