"Tipping off" and client service under the Proceeds of Crime Act

Avoiding the offence of 'tipping off' a party about potential or actual investigations by the Serious Organised Crime Agency (SOCA), while ensuring business is as little affected as possible, is a duty that a money laundering reporting officer (MLRO) in the Regulated sector must attend to.

It is the Proceeds of Crime Act 2002 (the Act), as amended by Statutory Instrument 2007 No. 3398, that sets out the ways in which this offence can be committed, and the exceptions that provide a defence against allegations of tipping off. Section 333A of the Act relates to the Regulated sector, and section 342 to unregulated business. The importance of understanding and complying with this section should be clearly communicated by an MLRO in the Regulated sector to the workers for whom he is responsible, and anti-money laundering training provided where necessary.

Under section 333A, tipping off is committed when a person reveals information gained through work in the Regulated sector that a disclosure has been considered or made to an official, and where that information is likely to prejudice an investigation resulting from that disclosure. Sanctions against those who commit this offence include fines and imprisonment for up to two years.

However, there are permissible disclosures allowed under section 333B, 333C and 333D. There is no offence when disclosures are made, for example, within the same undertaking; nor when disclosures are made between financial institutions within the same group of companies; nor when disclosures are made between certain Regulated businesses of the same kind in jurisdictions within EEA states or those with similar anti-money laundering regulations. There are also exceptions that apply in certain circumstances, including those where a person does not know or suspect that the disclosure would prejudice a money laundering investigation, and where the disclosure is made in a valid attempt to persuade a client not to commit a money laundering offence.

What this means is that an MLRO must have full confidence in his charges that they will not be hampered by fear of the Proceeds of Crime Act. The exceptions and permissions in the Act are intended to provide firms within the Regulated sector with the ability to work in such a way that the full panoply of services may be offered to clients while ensuring evidence of fraud, planned or committed, is visible to SOCA; the firms that best take advantage of those permissions will establish the most efficient professional systems, and are likely to reap the commercial rewards.

Anti-money laundering training and the Proceeds of Crime Act
Through online courses, seminars, and packages tailored to our clients, ML Solutions 4U offers anti-money laundering training to firms throughout the Regulated sector. We have a deep understanding of the duties of an MLRO that ensure a company's compliance with the strict provisions of UK money laundering regulations, and we are happy to discuss ways in which our services can help discharge them.

For more information about our certified courses, please complete the online enquiry form or telephone an advisor on 0845 402 0001.

Money Laundering Information » Tipping off Offences and Exceptions Under the Proceeds of Crime Act