Danny Robinson QC
The annual Authorisation to Practice online questionnaire will soon need to be completed. Part of the process requires each barrister to declare whether they are undertaking, have current instructions or in the last 12 months have undertaken work which falls within the scope of paragraphs 11(d) and 12(1)(a) to (e) of the Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ("the Regulations") or if they are undertaking, have current instructions or in the last 12 months have undertaken work as a trust or company service provider which falls within the scope of paragraphs 12(2)(a) to (d) of the Regulations.
If your work comes within these provisions, then you must comply with their requirements, including carrying out risk assessments, having anti-money laundering policies, controls and procedures that address the identified risks, conducting, where appropriate, customer due diligence, and, if required, submitting Suspicious Activity Reports to the National Crime Agency. So, it is obviously important to know whether or not the work you do is caught by the Regulations.
You should know whether you work inside the so-called "Regulated Sector" - a term used in both the Proceeds of Crime Act 2002 ("POCA") and in the Terrorism Act 2000 ("the TA"). Every barrister owes an obligation not to become involved in money laundering or terrorist financing. Money laundering is the process whereby the proceeds of crime are changed or disguised so as to hide their unlawful origin. Terrorist financing is the raising, moving, storing and using of financial resources for the purposes of terrorism. Given that these concepts are broadly defined, barristers sometimes mistakenly think that their work falls within the Regulations, when in fact it doesn’t. Indeed, there is authority from the Court of Appeal that the “ordinary conduct of litigation” does not fall within the concept of becoming concerned in a money laundering arrangement under s.328 of POCA 2002, which will mean that most of the things that you do as a barrister or advocate will not trigger anti-money laundering or counter-terrorist financing obligations (see Bowman v Fels  1 WLR 3083). This short article is intended to assist barristers in their understanding of whether their work does, in fact, come within the provisions.
So what types of work undertaken by barristers do come within the scope of the Regulations? The relevant areas of work are defined by Regulation 11(d) and 12(1):
Para 11d provides:
“Auditors and others
11. In these Regulations—
(d)“tax adviser” means a firm or sole practitioner who by way of business provides advice about the tax affairs of other persons, when providing such services.
Para 12 provides:
Independent legal professionals and trust or company service providers
12.—(1) In these Regulations, “independent legal professional” means a firm or sole practitioner who by way of business provides legal or notarial services to other persons, when participating in financial or real property transactions concerning—
(a)the buying and selling of real property or business entities;
(b)the managing of client money, securities or other assets;
(c)the opening or management of bank, savings or securities accounts;
(d)the organisation of contributions necessary for the creation, operation or management of companies; or
(e)the creation, operation or management of trusts, companies, foundations or similar structures,
and, for this purpose, a person participates in a transaction by assisting in the planning or execution of the transaction or otherwise acting for or on behalf of a client in the transaction.”
The final clause of Regulation 12(1) is critical: if the work that you are undertaking is not transactional within the meaning of reg. 12(1), and you are not providing advice, material aid or assistance in connection with the tax affairs of other persons, then you are not subject to the Regulations.
The transactional aspect of the Regulations is central to the proper determination of whether the Regulations are engaged. Applying that analysis, it is clear that representing someone who is charged with a money laundering offence does not come within the Regulations: in those circumstances you are not acting for a client in a financial or real property transaction. In the same way, if you are representing a client on a criminal charge and you suspect s/he is involved in money laundering and/or terrorist financing, the Regulations are not engaged because your work is not transactional. In a matrimonial property case your work does not come within the provisions if you are instructed to advise on proposed litigation relating to property. If your work involves advising on tax planning, creating companies, or advising on property transactions, then it is more likely that the Regulations will apply to you, and you should be aware of your obligations.
Those not in the Regulated Sector still need to be aware
Most barristers practice work which is outside the Regulated Sector and therefore outside the scope of the Money Laundering Regulations. That’s good news, as it means that most barristers will not have to implement the regulatory compliance systems required for Regulated Sector work. However, there are a number of risks that all barristers should be aware of, whatever kinds of work they do.
Those risks include the substantive money laundering offences. When it comes to the main offences in POCA (ss.327-329), the statute does not discriminate between barristers who work in the Regulated Sector and those who do not. The offences apply universally to all persons. No person is allowed to carry out activities that assist another to launder property. Bowman v Fels is not a general get out of jail free card. It will not protect you, for example, if you are involved in sham litigation. Nor will it help you if you give ancillary tax advice to a client at the same time as litigation advice and representation - unless you are dealing with tax litigation. POCA (s.342) also criminalises certain disclosures which would prejudice an ongoing or proposed criminal investigation (similar to the tipping off offence).
The risks also include the terrorist financing offences. The TA contains a number of offences, the main ones of which (ss 15-18) apply universally. They will apply to you whatever type of work you are doing. Whether you are working in the Regulated Sector or not, s.19 of the TA requires you to report any suspicion that another person has committed a terrorist financing offence.
Assistance is available
Although all of this can feel a little daunting, the Bar Council is here to help you. It hosts the Money Laundering Working Group of specialists who have drafted the Money Laundering, Terrorist Financing and Proceeds of Crime guidance which can be accessed on the Ethics Hub here. The Working Group also provides assistance to the Bar Council's Ethical Enquiries Service and its Helpline, which assists barristers identify, interpret and comply with their professional obligations under the BSB Handbook. In addition, the Bar Council offers training on anti-money laundering and terrorist financing. Please see our training and events page for more details.