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  3. Duties and responsibilities under the Proceeds of Crime Act 2002

Guidance

Duties and responsibilities under the Proceeds of Crime Act 2002

This advice explains how operators can make sure they and their employees comply with their obligations under The Proceeds of Crime Act 2002 (POCA).

Published
13 November 2020

Last updated
27 February 2023 - Changes

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  1. Contents
  2. Part 1 - Introduction and summary of the advice
  3. 9 - Duties under the Proceeds of Crime Act 2002

9 - Duties under the Proceeds of Crime Act 2002

POCA imposes duties on all operators to:

  • disclose instances where operators know or suspect that another person is engaged in money laundering
  • make disclosures in the prescribed form and manner
  • obtain a defence (appropriate consent) to do a prohibited act, where appropriate.

If a person carries out any action contemplated under the principal money laundering offences, the person can potentially commit one or more of the principal offences, except if an authorised disclosure is made prior to carrying out the action. The principal offences can be committed by any employee of the operator, except if a report is made to the NCA and, where applicable, a defence (appropriate consent) is obtained from the NCA. Therefore, in all instances where customers’ funds are known or suspected to have criminal origins, a report must be made to the NCA at the earliest opportunity.

Nominated officer

Whilst it is only incumbent upon those companies in the regulated sector (which, in the gambling industry, currently includes non-remote and remote casinos) to appoint nominated officers, the Commission recommends that operators in the non-regulated sector also consider appointing a nominated officer, as this will help them meet their obligations under POCA more effectively.

Where a nominated officer is appointed, they will normally be responsible for ensuring that, when appropriate, information or any other matter leading to knowledge or suspicion of money laundering is properly disclosed to the NCA. The decision to report or not to report suspicious activity is the responsibility of the nominated officer.

The nominated officer will:

  • receive internal disclosures under Part 7 of POCA (opens in a new tab)
  • decide whether these disclosures should be reported to the NCA
  • if appropriate, make such external reports to the NCA
  • ensure that a defence (appropriate consent) is applied for, as necessary.

The nominated officer should record all decisions made in this regard.

Suspicious activity reporting

All operators are required to make a report in respect of information that comes to them within the course of their business:

  • where they know
  • where they suspect

that a person is engaged in money laundering, including criminal spend.

In order to provide a framework within which suspicious activity reports (SARs) may be raised and considered:

  • each operator should ensure that employees make reports to the operator’s nominated officer, or an employee in a managerial capacity, where they know or suspect that a person is engaged in money laundering
  • the nominated officer, or the manager, should consider each report, and determine whether it warrants the submission of a SAR
  • operators should ensure that employees are appropriately trained.

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.

Whether you hold suspicion or not is a subjective test. Being suspicious of a transaction does not require knowledge of the exact nature of the criminal offence or that the funds are definitely those arising from the crime.

In order for a disclosure to the NCA 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 generate suspicion that money laundering has taken place.

If operators handle any proceeds of crime, they may commit a principal money laundering offence. However, if the operator submits a SAR to the NCA, this may provide a defence. There is a statutory mechanism which allows the NCA either to grant or refuse the 'prohibited act' going ahead. This statutory mechanism is called 'appropriate consent' and is referred to by the NCA as 'requesting a defence from the NCA under POCA and TACT'.

A defence (appropriate consent) is granted by the NCA's United Kingdom Financial Intelligence Unit (UKFIU) Consent Desk, who carry out the necessary internal enquiries, and will contact the appropriate law enforcement agency, where necessary, for a defence (consent) recommendation. Once the NCA’s decision has been reached, the disclosing operator will be informed of the decision by telephone, and be given a reference number, which should be recorded, along with the operator’s record of decisions made.

Operators duties under POCA, the status and role of the nominated officer, suspicious activity and reporting, and requesting a defence (appropriate consent) are discussed in Duties under the Proceeds of Crime Act 2002 of this advice.

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