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Preventing money laundering and the financing of terrorism

What is meant by knowledge and suspicion?

8.4 In the context of POCA, knowledge means actual knowledge. Having knowledge means actually knowing something to be true. In a criminal court, it must be proved that the individual in fact knew that a person was engaged in money laundering. Knowledge can be inferred from the surrounding circumstances, so, for example, a failure to ask obvious questions may be relied upon by a jury to infer knowledge (Refer to Baden v Societe Generale pour Favouriser le Developpement du Commerce et de l'Industrie en France [1983] BCLC 325). The knowledge must, however, have come to the casino operator (or to the employee) in the course of casino business or (in the case of a nominated officer) as a consequence of a disclosure under section 330 of POCA. Information that comes to the casino operator or employee in other circumstances does not come within the scope of the regulated sector obligation to make a report. This does not preclude a report being made should employees choose to do so. Employees may also be obliged to make a report by other parts of the Act. Further information can be found in Part 7 of POCA.

8.5 In the case of Da Silva [2006] EWCA Crim 1654, the Court of Appeal stated the following in relation to suspicion:”It seems to us that the essential element in the word “suspect” and its affiliates, in this context, is that the defendant must think that there is a possibility, which is more than fanciful, that the relevant facts exist. A vague feeling of unease would not suffice.” There is thus no requirement for the suspicion to be clear or firmly grounded on specific facts, but there must be a degree of satisfaction, not necessarily amounting to belief but at least extending beyond mere speculation, that an event has occurred or not.

8.6  Whether a person holds a suspicion or not is a subjective test. If a person thinks a transaction is suspicious they are not required to know the exact nature of the criminal offence or that particular funds are definitely those arising from the crime. The person may have noticed something unusual or unexpected and, after making enquiries, the facts do not seem normal or make commercial sense. It is not necessary to have evidence that money laundering is taking place to have suspicion.

8.7 A transaction that appears to be unusual is not necessarily suspicious. Many customers will, for perfectly legitimate reasons, have an erratic pattern of gambling transactions or account activity. Even customers with a steady and predictable gambling profile will have periodic transactions that are unusual for them. So an unusual transaction may only be the basis for further enquiry, which may in turn require judgement as to whether the transaction or activity is suspicious. A transaction or activity may not be suspicious at the time, but if suspicions are raised later, an obligation to report the activity then arises. Likewise, if concern escalates following further enquiries, it is reasonable to conclude that the transaction is suspicious and will need to be reported to the NCA. 

8.8 Unusual patterns of gambling, including the spending of particularly large amounts of money in relation to the casino or customer’s profile, should receive attention, but unusual behaviour should not necessarily lead to grounds for knowledge or suspicion of money laundering, or the making of a report to the NCA. The nominated officer is required to assess all of the circumstances and, in some cases, it may be helpful to ask the customer or others more questions. The choice depends on what is already known about the customer and the transaction, and how easy it is to make enquiries. 

8.9 In order for either an internal or external report to be made it is not necessary to know or to establish the exact nature of any underlying criminal offence, or that the particular funds or property were definitely those arising from a crime. Furthermore, it is not necessary to await conviction of a customer for money laundering or other criminal offences in order to have suspicion that money laundering has taken place.

Next chapter: What is meant by reasonable grounds to know or suspect?