Money laundering: further clarity provided by the Court of Appeal on the operation of the consent regime

Abstract

Purpose

To summarise a key development that provides clarity for banks on the operation of the money laundering provisions in the UK Proceeds of Crime Act 2002.

Design/methodology/approach

The article provides the background leading up to the UK Court of Appeal hearing, the key issues in the appeal, the decision of the court and what this means for banks in the UK.

Findings

The Court of Appeal held that (i) where a bank suspects that money in its customer’s account is criminal property, freezes the account and seeks consent to deal with the money, the court should not intervene during the course of the seven-working-day notice period and 31-day Moratorium Period and (ii) in most cases the discretion to grant an interim declaration is unlikely to be exercised.

Practical implications

This decision is important for banks and brings much-needed clarity. Prior to the Court of Appeal decision, it was open to customers to challenge a bank’s decision to freeze an account (pending a response from the NCA to a consent request) on the basis that, on a balance of convenience, payments from a bank account should be permitted to be made.

Originality/value

Practical guidance from an experienced lawyer specialising in complex investigations, litigation dispute resolution and regulatory enforcement proceedings for financial institutions and large corporations.

Citation

Allen, D. (2017), "Money laundering: further clarity provided by the Court of Appeal on the operation of the consent regime", Journal of Investment Compliance, Vol. 18 No. 3, pp. 72-74. https://doi.org/10.1108/JOIC-06-2017-0043