I work regularly in five jurisdictions (Guernsey, Jersey, Isle of Man, Gibraltar and the UK) and occasionally in others (Cayman Islands, Luxembourg, Ireland), and for me an absolute prerequisite is a good understand of the local AML legislation. Thankfully, as most of the places I go are UK-ish, this is not such a mammoth task as it could be; to be frank, everyone’s legislation is much of a muchness. There are the standard five money laundering offences, and then the standard four AML requirements (CDD, record-keeping, internal reporting, and staff training). There are little local differences (length of time one remains a PEP, or whether simplified due diligence is ever permitted) but for the most part, it’s all very similar. Except for tipping off. (Some places call it “tipping off” and others “tipping-off”, but that’s not what I mean.)
Tipping off is on my mind because Jersey has just this week brought out new tipping off legislation which comes into force on 4 August 2014. The Proceeds of Crime and Terrorism (Tipping Off – Exceptions) (Jersey) Regulations 2014 set out the situations in which revealing information about a suspicion will not be considered tipping off – in short, when it is done within your firm/group and “in good faith for the purpose of preventing or detecting money laundering”. This new legislation codifies for Jersey the situation that already exists in Guernsey, in the form of guidance issued by HM Procureur in October 2011, which states that “no prosecutions will be brought against persons who disclose the fact that a SAR has been or will be made, if the disclosure is made by one member of an organisation to another for the purposes of discharging AML/CFT responsibilities and functions”.
This is all fine and dandy if your offence of tipping off concentrates – as it does in the sensible jurisdictions of Guernsey and Jersey – on the blabbing of information around SARs. In the UK, however, the Proceeds of Crime Act is much more mealy-mouthed. Section 333, the tipping off offence, says this: “A person commits an offence if—(a) he knows or suspects that a disclosure… has been made, and(b) he makes a disclosure which is likely to prejudice any investigation which might be conducted following the disclosure referred to in paragraph (a).” That test of “likely to prejudice any investigation” was discarded in other jurisdictions many moons ago, and deserves to be binned here too. How is a member of staff expected to assess whether what he is saying is likely to prejudice an investigation? And – perhaps more importantly – how can such transgressions be prosecuted fairly? We have enough trouble with the objective test of suspicion elsewhere in the money laundering offences, with courts trying to judge what someone should have thought. When trying to communicate obligations to staff, it is much better to be able to make it simple: when you’ve made a SAR, zip your lip unless the MLRO says otherwise.
I hate money laundering 