Criminal Finances Act 2017

The Criminal Finance Act 2017 (CFA) creates new investigatory powers, extends existing arrangements in respect of suspicious transactions and brings into force new corporate offences. Some of the important new provisions in the CFA are:

• Unexplained Wealth Orders (s.1)

  In the aftermath of the Panama Papers Scandal, law enforcement agencies have been given powers to seize suspected criminal property without bringing a prosecution. This applies to Politically Exposed Persons or those involved or associated with a serious crime. Essentially, these new powers enable the High Court to make an order requiring a person to provide details of the nature of their interest in property, how they obtained it (include the price paid), to produce any trust instrument connected with the property where ownership is disproportionate to their income. Enforcement agencies who can apply for this include the NCA, FCA, SFO and HMRC. A Court must be reasonably satisfied that the property is held by the individual concerned and that its value is greater than £50,000.

• Offences of failing to prevent tax evasion (s.45 & 46)

  These sections criminalise tax evasion crimes, by individuals and companies, such as cheating the Revenue and includes dishonest facilitation of tax evasion. There is a corresponding offence for facilitating similar non-UK tax evasion. In both cases the sanction on conviction is a fine.

• FCA Power to seize assets (s.20)

  The FCA now has the power to recover property (including money in bank accounts) in circumstances where there has not been a conviction but where it can be shown on the balance of probabilities that property has been obtained through unlawful conduct. This essentially extends the confiscation order regime to the financial regulator.

• Protected Information Sharing (s.11)

  This enhances the sharing of information between entities in the regulated sector (such as Banks) to better combat money laundering. Regulated entities can now share information with each other where the NCA has been informed by way of a Suspicious Activity Report. This allows the submission of joint disclosure reports by institutions based on pooled information.

• Extended SAR Moratorium – (s.10)

  The NCA can now seek a court order to extend the period of time it has to investigate potential money laundering offences beyond the statutory 31 day period, up to a maximum of an additional 186 days.