The Criminal Finances Bill is out, described in the Home Office press release as “legislation to tackle money laundering and corruption, recover the proceeds of crime and counter terrorist financing”. When it was at the consultation stage, I responded – of course! – and voiced my concern at the proposed changes to the UK’s consent regime. (Quick reminder: under UK legislation, you can submit a consent SAR to the NCA. This triggers a period of 7 working days, during which the NCA can say yes, no or nothing. If they say no or nothing, a further moratorium period of 31 calendar days is triggered, during which they can say yes, no or nothing – which is a tacit yes.) And I am sorry to say that – at this bill stage anyway – my worst fears have been realised.
Under the proposed new provisions in section nine of the bill, the NCA can apply for a court order to extend the moratorium period, and they can apply for further extensions, as long as the total extensions would not “extend the period by more than 186 days (in total) beginning with the day after the end of the 31 day period”. 186 days is 26.54 weeks, or about six months. Of course there are safeguards proposed: the court, before granting the order, must be satisfied that “an investigation is being carried out in relation to a relevant disclosure (but has not been completed), (b) the investigation is being conducted diligently and expeditiously, (c) further time is needed for conducting the investigation, and (d) it is reasonable in all the circumstances for the moratorium period to be extended”.
But still, pity the MLRO who might have to keep a customer sweet, dancing around very valid concerns about tipping off, for up to six months! And what about the customer, who may be trying to buy a house or close a deal or make a timely investment and finds his transaction put on hold for half a year. Surely we should be encouraging more speedy responses, not enabling such impractical delays – or perhaps it’s simply an admission that the NCA, as currently staffed and funded, cannot cope with the number of consent SARs it receives.
I hate money laundering 
Yes so, just to be clear, the proposal is that the period on ‘hold’ should be six months longer than it is at present. So a customer could find his bank account frozen for between 7 & 8 months without explanation & without much opportunity to do anything but wait & hope!
Part of the problem it appears is that where monies have arrived in the UK from overseas the NCA would like to obtain information from the authorities in the country from which the funds originated. That information may not be received quickly (or ever) depending upon the co-operation which the NCA receive.
David
That’s how I’m reading it, yes, David. I can understand the thinking behind it – money laundering investigations are rarely simple and never speedy – but for day-to-day workability, putting an almost-8-month deadline on it is almost worse than having no deadline at all (as in most jurisdictions). Will courts have time/expertise to assess whether the investigation is really being conducted “diligently and expeditiously” – of course the NCA will always say that it is – and therefore truly deserving of an extension?
Best wishes from Susan
Yes and (for reasons one can understand) the account holder & his legal team may be excluded from “any part of the hearing” at which the court is dealing with an application for an extension to the moratorium period.
However one would hope that, as a minimum, the account holder (or his lawyer) would be able to tell the court about the difficulties being created by the ‘freezing’ of his account & perhaps suggest a way forward (such as transferring part of the monies into a new ‘unfrozen’ account to allow some sort of normality to continue pending resolution).
David
Welcome to the Guernsey experience where a ‘No Consent’ from the authorities can be endless in time, try sweet talking a client in these circumstances!
Welcome to the blog, Phil, and thank you for your comment. We feel your pain! But on the plus side, at least in Guernsey you can march up to Mignot Plateau and loom over the FIS lot until they pay attention to your plight – it’s nigh on impossible to get access to the NCA here in the UK.
Best wishes from Susan