The Law Relating to Financial Crime in the United Kingdom PDF
Preview The Law Relating to Financial Crime in the United Kingdom
THE LAW RELATING TO FINANCIAL CRIME IN THE UNITED KINGDOM Karen Harrison is Senior Lecturer in Law at the University of Hull. Her teaching and research interests focus on criminal law, penology and the sentencing and man- agement of dangerous offenders. She has published extensively across these topics. Nicholas Ryder is Professor in Financial Crime at Bristol Law School, University of the West of England, Bristol. He teaches and researches in the areas of commercial law, financial crime and credit unions. He has published widely on these and related areas Comments on the 1st edition: ‘It is well-written, well-researched and academically stimulating; it is one of those rare texts which you could read in one go . . . a key text for anyone interested in the legal aspects of financial crime in the UK.’ Student Law Journal ‘This is a much needed and most timely book. Financial crime is a subject of increasing impor- tance which can no longer be ignored. The authors have produced an excellent text addressing topics such as fraud, insider dealing and market abuse in a manner which combines thorough- ness with accessibility. I unhesitatingly recommend the book to students as well as practitioners who are beginning to develop an interest in the subject.’ Jonathan Fisher QC, London School of Economics, UK ‘Karen Harrison and Nicholas Ryder have made a major contribution to advancing our knowledge of this increasingly important area of law by providing excellent ideas and recom- mendations for the future. The authors are to be congratulated for their efforts and the book deserves to be widely read.’ Roman Tomasic, University of South Australia and Durham Law School, UK ‘This book comprehensively and from a practical perspective addresses financial crime in this wider and more relevant context. It provides the reader with not only the substantive law, but sets it within the relevant regulatory and enforcement environment. This work is a vital tool for any- one concerned about protecting the integrity of their institution and bringing fraudsters to book!’ Barry Rider, Centre for International Documentation on Organised and Economic Crime, UK This page intentionally left blank THE LAW RELATING TO FINANCIAL CRIME IN THE UNITED KINGDOM 2nd edition Karen Harrison and Nicholas Ryder First published 2017 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2017 Karen Harrison and Nicholas Ryder The right of Karen Harrison and Nicholas Ryder to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice : Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book has been requested ISBN: 978-1-4724-6422-4 (hbk) ISBN: 978-1-4724-6425-5 (pbk) ISBN: 978-1-3155-5623-9 (ebk) Typeset in Bembo by Apex CoVantage, LLC CONTENTS List of abbreviations viii 1 Introduction 1 Introduction 1 What is financial crime? 1 The extent of financial crime 5 The importance of financial crime regulation 8 Contents overview 9 2 Money laundering 11 Introduction 11 The money laundering process 11 What is the offence of money laundering? 13 The extent of money laundering 19 Policy background – where did the offence originate from? 21 Financial institutions and regulatory bodies 24 Financial intelligence 33 Sentencing and recovery 36 Future recommendations 46 Further reading 47 3 Terrorist financing 49 Introduction 49 What is the offence of terrorist financing? 50 The extent of terrorist financing 53 vi Contents Policy background – where did the offence originate from? 58 Financial institutions and regulatory bodies 65 Financial intelligence 68 Sentencing and recovery 72 Future recommendations 81 Further reading 82 4 Fraud 84 Introduction 84 What is the offence of fraud? 84 Fraud and cybercrime 89 The extent of fraud 91 Policy background – where did the offence originate from? 94 Financial institutions and regulatory bodies 97 Financial intelligence 109 Sentencing and recovery 111 Future recommendations 121 Further reading 121 5 Insider dealing 123 Introduction 123 What is the offence of insider dealing? 124 The extent of insider dealing 129 Policy background 130 Financial institutions and regulatory bodies 133 Sentencing and recovery 138 Market manipulation 142 Future recommendations 146 Further reading 147 6 Market abuse 148 Introduction 148 What are the civil and criminal offences of market abuse? 148 The civil market abuse regime 153 Market abuse regulation 158 The extent of market abuse 159 Financial institutions and regulatory bodies 160 Reporting of suspicious transactions 160 Sentencing and recovery 163 Future recommendations 169 Further reading 169 Contents vii 7 Bribery and corruption 171 Introduction 171 What is the offence of bribery? 172 The extent of bribery 180 Policy background 182 Financial institutions and regulatory bodies 184 Financial intelligence 187 Sentencing and recovery 189 Future recommendations 198 Further reading 199 8 The avoidance and evasion of tax 200 Introduction 200 What are the offences? 201 The extent of tax evasion 203 Policy background 205 Financial institutions and regulatory bodies 209 Sentencing and recovery 210 Future recommendations 220 Further reading 222 9 Conclusions and recommendations 223 Money laundering 223 Terrorist financing 225 Fraud 227 Insider dealing 228 Market abuse 228 Bribery and corruption 228 Tax evasion/avoidance 229 Final thoughts 230 Bibliography 231 Index 259 ABBREVIATIONS AML anti-money laundering BEPS base erosion and profit shifting CIOT Chartered Institute of Taxation CJA Criminal Justice Act CMA Competition and Markets Authority CPS Crown Prosecution Service CTF counter-terrorist financing DPA Deferred Prosecution Agreement DPP Director of Public Prosecutions DTI Department of Trade and Industry ECA Economic Crime Agency ECHR European Convention on Human Rights EEC European Economic Community EU European Union FATF Financial Action Task Force FBI Federal Bureau of Investigation FCA Financial Conduct Authority FIU financial intelligence unit FSA Financial Services Authority FSMA Financial Services and Markets Act FTT First-Tier Tribunal GDP gross domestic product HMRC HM Revenue and Customs ICT information and communication technology IMF International Monetary Fund IRA Irish Republican Army Abbreviations ix ISA individual saving account ISIL Islamic State of Iraq and the Levant ISIS Islamic State of Iraq JMLSG Joint Money laundering Steering Group LIBOR London Interbank Offered Rate MAD Market Abuse Directive MAR Market Abuse Regulation MIB Marketing of Investment Boards MLRO Money Laundering Reporting Officer NCA National Crime Agency NFA National Fraud Authority NFIB National Fraud Intelligence Bureau OECD Organisation for Economic Co-operation and Development OFT Office of Fair Trading PCSU Public and Commercial Services Union P&O Peninsular & Oriental Steam Navigation Company POCA Proceeds of Crime Act PRA Prudential Regulation Authority SAR Suspicious Activity Report SCPO Serious Crime Prevention Order SEC Security & Exchange Commission SFO Serious Fraud Office SIB Securities and Investment Board SOCA Serious Organised Crime Agency SRO self-regulating organisation STR suspicious transaction reporting SYSC Senior Management Arrangements, Systems and Controls UK United Kingdom UN United Nations UNODC United Nations Office on Drugs and Crime US United States USA United States of America VAT Value Added Tax
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