money laundering

money laundering
the moving of the proceeds of crime through the financial system so as to conceal its nature. As a result of a European directive, the UK has implemented rules against this practice mainly through the Criminal Justice Act 1993. Aside from controlling the actual criminals, persons can be guilty of offences if they do not report suspicions or information as soon as reasonably practicable where the laundering concerns terrorism or drug money. Assisting another person to retain the benefits of all types of crime is also made an offence.

Collins dictionary of law. . 2001.

money laundering
The Criminal Justice Act 1993, passed on 27th July 1993, includes provisions which make substantial changes to the present law on money laundering by extending existing offences to dealing with the benefits of any criminal conduct.
Summary. The Criminal Justice Act 1993, passed on 27th July, 1993, includes provisions which make substantial changes to the present law on money laundering and insider dealing (see Stock Exchange and Securities Regulation Bulletin, this issue).
Under present legislation, money laundering offences are largely limited to dealings in connection with drug trafficking and terrorism. This Act (which has not yet come into force) will extend the existing offences to dealings with the benefits of any criminal conduct. In addition, the Act extends the existing law to implement those requirements of the EEC Money Laundering Directive not already satisfied by the existing Drug Trafficking Offences Act 1986 and Prevention of Terrorism (Temporary Provisions) Act 1989:
• It imposes a positive duty to report suspected money laundering connected with drugs or terrorism to the authorities.
• It imposes a prohibition against disclosure to a customer or third party ("tipping off") of the reporting of the suspicion to the authorities or of any details of the authorities' investigation.
• It provides wider immunity to persons making disclosures to the authorities in good faith.
Existing law already encourages the reporting of suspicions by imposing primary liability on those who fail to report their suspicion and become involved in any arrangement which facilitates the retention and control of the proceeds of drug trafficking or terrorism. But similar liability will now lie on those harbouring unreported suspicions who become involved in any similar arrangement with regard to the proceeds of criminal conduct generally.
The Act now makes it a specific and separate offence in cases involving drugs or terrorism not to report a suspicion if the information giving rise to the suspicion came to the person's attention in the course of his trade, profession, business or employment. Effectively, the duty to report is extended to employees of business institutions where it is the institutions who may become involved in the arrangement and not the employees themselves. The institutions affected are those in the financial and professional services sector and include banks, building societies, credit institutions, authorised persons under the FSA 1986, life insurance companies, financial leasing companies, companies providing money transmission services, bureaux de change, stockbrokers, and dealers in money market instruments, foreign exchange, financial futures, options, foreign currency and interest rate instruments. Employees of such institutions will have a defence of reasonable excuse in relation to any failure to report where instead of reporting to the authorities they have followed their employers' internal reporting mechanisms.
Internal control systems. The imposition of an obligation on institutions to put in place such internal procedures has been left for secondary legislation in the form of The Money Laundering Regulations 1993, SI 1993 No. 1933. Like the Act, these Regulations have yet to come in force and will not do so until at least 1st April, 1994. This allows institutions an interim period in which to put into place the necessary housekeeping measures, which will involve:
• The establishment and maintenance of adequate systems of internal control and communication in order to forestall and prevent money laundering operations. The Regulations set out detailed requirements for the establishment of internal control systems for customer identification, record-keeping and reporting designed to ensure that an audit trail (accessible by the authorities) is maintained for all transactions.
• The development of awareness among employees of the legislative requirements and the provision of training for relevant staff in the recognition and handling of money-laundering transactions.
Any failure to implement these systems will in itself be an offence punishable by imprisonment or fine.
The Joint Money-Laundering Steering Group has issued consultative drafts of Guidance Notes in relation to mainstream lending and deposit taking activities, insurance, and investment business. These amplify on the regulations in reader-friendly narrative.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

money laundering
The process of taking the proceeds of criminal activity and making them appear legal.

Dictionary from West's Encyclopedia of American Law. 2005.

money laundering
The process of taking the proceeds of criminal activity and making them appear legal.

Short Dictionary of (mostly American) Legal Terms and Abbreviations.

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