Financial Crime UnitFinancial Crime Unit

Detective Sergeant Mike VenablesDetective Sergeant Mike Venables 1010thth May 2011 May 2011

ML OffencesConcealing, disguising, converting, transferring or

removing criminal property from the Island.Entering or becoming concerned in an arrangement

which facilitates the acquisition, retention, control or use of criminal property by or on behalf of another.

Acquiring, using or possessing criminal property.

Now includes laundering your own property.

Criminal ConductConduct is criminal if;It constitutes an offence on the Island, orWould constitute an offence on the Island if the

conduct had occurred here.There are defences for ML offences if the conduct

was outside the Island and it was not unlawful in the country it took place (must know), and

Is not of a description described by the DHA (UK any offence which carries over 12 months imprisonment)

Suspicion

Law requires you and your staff to report knowledge and suspicions of money laundering – not activities that are merely unusual.

There is no ‘right level’ of internal reporting suspicion.

Shah & Anor v. HSBC

SuspicionMust involve money laundering.

“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. But the statute does not require the suspicion to be ‘clear’ or ‘firmly grounded and targeted on specific facts’ or based on ‘reasonable grounds’.

Failure To Disclose (1)A person commits an offence if the conditions in subsections (2) to (4) are

satisfied.(2) The first condition is that the person-(a) knows or suspects; or(b) has reasonable grounds for knowing or suspecting

that another person is engaged in money laundering.

(3) The second condition is that the information or other matter-(a) on which the person’s knowledge or suspicion is based; or(b) which gives reasonable grounds for such knowledge or suspicion,

came to that person in the course of a business in the regulated sector.

Failure to Disclose (2)(4) The third condition is-

(a) that the person can identify the other person mentioned in subsection (2) or the whereabouts of any of the laundered property; or(b) that the person believes, or it is reasonable to expect the person to believe, that the information or other matter mentioned in subsection (3) will or may assist in identifying that other person or the whereabouts of any of the laundered property.

(5) The fourth condition is that the person does not make the required disclosure to-(a) a nominated officer; or(b) a constable or customs officer serving (in either case) with the Financial Crime Unit of the Isle of Man Constabulary,

Failure To DiscloseDefence-

That person has a reasonable excuse for not making the required disclosure.

Legal adviser etc

Organisational damage limitation is unlikely to be a reasonable excuse!

Authorised Disclosures (1)

(a) it is a disclosure to-

(i) a constable or customs officer serving (in either case) with the Financial Crime Unit of the Isle of Man Constabulary; or

(ii) a nominated officer,

by the alleged offender that property is criminal property;

(b) it is made in the form and manner (if any) prescribed for the purposes of this subsection by order under section 155; and

(c) the first, second or third condition set out below is satisfied.

Authorised Disclosures (2)

(2) The first condition is that the disclosure is made before the alleged offender does the prohibited act.

(3) The second condition is that-(a) the disclosure is made while the alleged offender is doing the prohibited act;(b) the alleged offender began to do the act at a time when, because the alleged offender did not then know or suspect that the property constituted or represented a person’s benefit from criminal conduct, the act was not a prohibited act; and(c) the disclosure is made on the alleged offender’s own initiative and as soon as is practicable after the alleged offender first knows or suspects that the property constitutes or represents a person’s benefit from criminal conduct.

Authorised Disclosures (3)

(4) The third condition is that-

(a) the disclosure is made after the alleged offender does the prohibited act;(b) the alleged offender has a reasonable excuse for the failure to make the disclosure before the alleged offender did the act; and(c) the disclosure is made on the alleged offender’s own initiative and as soon as it is practicable for it to be made.

Consent IssuesMust be appropriate!Legislative requirements conformed with.If not, returned – no 7/31 day moratorium.Cannot consent etc to relationships.Must involve the Isle of Man.FCU cannot consent to non-IOM matters.

Questions?Questions?

m.venables@fcu.gov.im