Are Accountants Prepared for the Brave New World of Draconian Legislation?

 

 The late Lord Justice Harman once remarked ‘accountants are the witch doctors of the modern world, willing to turn their hands to any kind of magic.’ We should have regaled in this back-handed compliment but it seems that, from reading the recent threads on this Discussion Group, one would have the distinct impression that accountants are now behaving like rabbits caught in the headlamps of the proceeds of crime legislation. Is it not therefore about time that accountants, especially those in practice, moved on from simply debating the perceived iniquities, real and imagined in the legislation and its application, and started taking stock of how as professionals we should act and react in the present environment?  This is not to dismiss the need for vigilance and lobbying of government where we find the legislation unfair and prejudicial both to our clients and to the profession as a whole.    The Financial Action Task Force Guidance for Accountants Guidance for Accountants  issued in June 2008 stated the obvious ‘In many countries, accountants are the first professional body consulted by many small businesses and individuals when seeking general business advice and a wide range of regulatory and compliance advice.’ When accountants feel they are not qualified to give the necessary advice they are directed to ‘advise on an appropriate source of further assistance.’  We are not lawyers but we may well be the first port of call for clients with regulatory and compliance issues.  

One area where we do regard ourselves as having superior knowledge than the local solicitor is taxation and we should be aware that HMRC is rapidly extending its powers under a wide raft of legislation including Proceeds of Crime Act 2002 . On January 1 last year the Revenue and customs Prosecution Office (RCPO) merged with the Crown Prosecution Service (CPS) and became the Revenue and Customs Division (RCD) of CPS. Nine months after this marriage, HM Treasury announced that it intended a fivefold increase in prosecutions through a £900million boost to fight tax evasion. For the year ended 30 September 2009 HMRC had prosecuted 157 individuals for tax evasion.

 

It was little surprise that the main accountancy and taxation bodies in Great Britain issued  Professional Guidance in Relation to Taxation ,a salutary reminder of accountant’s responsibilities. The accompanying press release  to the Guidance issued by the Institute of Chartered Accountants of Scotland made specific reference to two cases that have been detailed in this Discussion Group  Firstly a report in the Sunderland Echo here concerning Mr Doshi.  Although the report was not specific about the offence it appeared that Mr Doshi, an accountant  had been convicted of prejudicing a money laundering investigation contrary to s342 PoCA 2002. The second case alluded to was that of  a taxpayer client had agreed with HM Revenue & Customs that he had failed to notify a tax liability and pay a relatively small amount of tax of around £3,500 for one tax year. His actions were found to have constituted “cheating the public revenue by failing to submit accounts for tax…with the intent to defraud” – a criminal act which meant he was then liable to settle around £700,000 calculated under the Proceeds of Crime Act 2002 as the extent of his unsupported assets deemed to have arisen from criminal activities. The case came to public prominence through the Court of Appeal, Steed v R [2011] EWCA Crim 75

It is patently clear that the legislative powers are going to  be invoked by a wide range of agencies in the coming year. Lord Justice Harman’s nanny has passed into the history books for telling him ‘the world is a very unfair place and the sooner you get to know it the better,’ Now there is a real challenge for the accountancy profession! 

 

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Gerard Murray's picture

Confidentiality of SARs

Gerard Murray | | Permalink

 

I wonder if the Home Office guidelines on Confidentiality & Sensitivity of SARs issued in 2005 re of relevance in setting minds at ease on this delicate subject. Paragraph 3 read-

A person making a SAR that another person is engaged in money laundering puts himself at risk of reprisals from the suspected person. There is therefore a great need to protect the identity of those making SARs in these circumstances. The aim of the guidance is to minimise the number of occasions where the identity of a person, or a firm, making a SAR is revealed in prosecution evidence or disclosed to the defence as unused material under the Criminal Procedure and Investigations Act 1996. Law enforcement and prosecutors should make every reasonable effort to avoid using SARs or SARs derived material, whilst complying with the law and reserving the right in exceptional circumstances to proceed with a case even where such disclosure is necessary. For example, obtaining production orders from disclosing institutions under POCA or the Police and Criminal Evidence Act should be the preferred option so that the evidential chain could begin with the production order rather than the SAR.’

At a number of SOCA seminars that I have attended, the issue of confidentiality has featured strongly.SOCA themselves recognise the importance of confidentiality. With an increasing number of governmental agencies now tapping into SOCA’s intelligence data, the reporting regulated sector needs to be assured that the wider dispersal of the contents of SARs does not prejudice the confidentiality of those reporting and that the thrust of paragraph 3, quoted above, remains central in the process.

 

Old Greying Accountant's picture

I wish ...

Old Greying Acc... | | Permalink

... I had David's faith in the "system"!

cymraeg_draig's picture

Disclosure

cymraeg_draig | | Permalink

'X' is entitled to see the evidence against him - which is the evidence obtained by the police investigation.  Typically the SAR is not of evidential value (and so the accountant will not be required as a witness) nor does it contain anything which would assist the defence or undermine the prosecution.  Therefore it is not disclosable to the defendant.  The disclosure officer will simply mark it "CND" (clearly not disclosable).

The defence are not entitled to see everything the police have or to rummage around in police files on a fishing trip!

David

 

Posted by davidwinch on Tue, 22/03/2011 - 18:39

 

Any defence cousel worthy of the name, will suspect that an SAR may have been filed.  If one has then it is clearly relevent to the defence as it is the basis upo which the whole investigation was commenced. A request for disclosure cannot, therefore be resisted by the prosecution. Indeed to deny access would render any subsequent conviction unsafe.

The SAR is clearly of evidential value, and any defence counsel not making a formal application for its disclosure, is, quite simply, guilty of dereliction of his duty to his client.  Further, one would never take the word of a disclosure officer, indeed I have repeatedly caught officers out trying to ommit clear defence evidence from disclosure.

Your statement that the SAR "is not disclosable to the defence" is totally wrong. The only items not disclosable are those which attract public interest immunity, and they are rare indeed.  Many cases have actually been abandoned by judges because refusal to disclose means the defence cannot obtain a fair hearing.

As OGA says, your faith in "the system" may be based on your own experience as an expert witness, but it is sadly misplaced as there is more corruption (and I deliberately use that word) amongst the prosecuting authorities than ever displayed by defendants.

Where a police officer makes a statement - I assume him to be lying.  Where a disclosure officer doesnt discllose something - I know damn well Its of use to the defence.  That is what 30+ years at the sharp end has taught me.  (And I dont believe a word HMRC say either).

 

 

 

Publicus's picture

SARs and Evidence in Court

Publicus | | Permalink

 

C-D ‘Any defence counsel worthy of the name, will suspect that an SAR may have been filed.  If one has then it is clearly relevant to the defence as it is the basis upon which the whole investigation was commenced.

 

Yet again, your ability to distort the law leaves me breathless. Remember what the initials SAR stand for-Suspicious Activity Report. When cases come to court the prosecution has to produce evidence not suspicions to lay before the jury. I have been involved in several money laundering cases and in each one of them it has been the evidence that has determined the guilt or innocence of the accused. The matter of any SARs didn't even enter the court. I have also filed SARs and eventually have seen cases in the courts that had a relevance to the SARs filed but in none of them was I ever called as a witness. If the defence has to resort to challenging the SARs it is not doing its job & is really scraping the barrel and must have little ability to challenge the evidence bring presented to the court.   From the passion of your posts I see that you really care about a concept of justice but as I see it you appear to have another agenda, which in fairness to you is somewhat worn on your sleeve and which is to encourage accountants in practice to have as little to do as possible with honouring their legal responsibilities under the proceeds of crime legislation. Please prove me wrong by producing evidence to the contrary!  

davidwinch's picture

By way of analogy

davidwinch | | Permalink

By way of analogy, suppose a police officer is investigating some suspected criminal conduct in a badly lit street at night.  He may get a torch and use it to shine a light to help guide him in finding evidence.  That does not make the torch of evidential value or require that it be produced to the defence.

By the same token a SAR may guide a police officer in making enquiries, obtaining documents, etc which then become evidence.  But that does not make the SAR of evidential value - nor does it make the SAR disclosable.

David

cymraeg_draig's picture

@ Publicus

cymraeg_draig | | Permalink

Yet again, your ability to distort the law leaves me breathless. Remember what the initials SAR stand for-Suspicious Activity Report. When cases come to court the prosecution has to produce evidence not suspicions to lay before the jury. I have been involved in several money laundering cases and in each one of them it has been the evidence that has determined the guilt or innocence of the accused. The matter of any SARs didn't even enter the court. I have also filed SARs and eventually have seen cases in the courts that had a relevance to the SARs filed but in none of them was I ever called as a witness. If the defence has to resort to challenging the SARs it is not doing its job & is really scraping the barrel and must have little ability to challenge the evidence bring presented to the court.   From the passion of your posts I see that you really care about a concept of justice but as I see it you appear to have another agenda, which in fairness to you is somewhat worn on your sleeve and which is to encourage accountants in practice to have as little to do as possible with honouring their legal responsibilities under the proceeds of crime legislation. Please prove me wrong by producing evidence to the contrary!  

Posted by Publicus on Tue, 22/03/2011 - 23:25

 

I am not sure whether you are deliberately attempting to be offensive, or, whether you simply have an unfortunate manner - but this is not the first offensive posting you have made.

However, your knowledge of the law appears to be lacking, and, I would strongly suggest that before attempting to lecture others, you first consider who you are lecturing. Your statement - "Yet again, your ability to distort the law leaves me breathless." is grossly offensive and an unacceptable slur on my professional integrity. I will leave it for you to consider how serious your statement is when made to a barrister.

You state - "If the defence has to resort to challenging the SARs it is not doing its job & is really scraping the barrel and must have little ability to challenge the evidence bring presented to the court", which setting aside the offensive innuendo for a moment, is an utterly ridiculous statement. In any case whether money laundering, fraud, rape, or shoplifting, it is demonstrably relevent to establish the complete chain of events which led to your client being selected and accused. The reason why the police (or whoever) initially targetted your client is a vital part of this (indeed possibly the most vital part). Any counsel not examining and considering whether or not the SAR should be challenged is in fact not doing his job.

As regards claims that a SAR is not disclosable -

CPIA 1996

 Application by accused for disclosure

(1)This section applies where the accused has given a defence statement under section 5, 6 or 6B and the prosecutor has complied with section 7A(5) or has purported to comply with it or has failed to comply with it.

(2)If the accused has at any time reasonable cause to believe that there is prosecution material which is required by section 7A to be disclosed to him and has not been, he may apply to the court for an order requiring the prosecutor to disclose it to him.]

(3)For the purposes of this section prosecution material is material—

(a)which is in the prosecutor’s possession and came into his possession in connection with the case for the prosecution against the accused,

(b)which, in pursuance of a code operative under Part II, he has inspected in connection with the case for the prosecution against the accused, or

(c)which falls within subsection (4).

(4)Material falls within this subsection if in pursuance of a code operative under Part II the prosecutor must, if he asks for the material, be given a copy of it or be allowed to inspect it in connection with the case for the prosecution against the accused.

(5)Material must not be disclosed under this section to the extent that the court, on an application by the prosecutor, concludes it is not in the public interest to disclose it and orders accordingly.

(6)Material must not be disclosed under this section to the extent that it is material the disclosure of which is prohibited by section 17 of the Regulation of Investigatory Powers Act 2000.]

 

As the prosecution may inspect a SAR, and indeed almost certainbly has, then it clearly falls under s4.  Quite clearly the motive behind the submission of the SAR, and its veracity, are qwuestions which "may assist the defence". There is, therefore a right, and indeed a duty, to inspect the SAR and to call the maker of that SAR as a witness, albeit a hostiile witness, for the defence.

Finally you state - "to encourage accountants in practice to have as little to do as possible with honouring their legal responsibilities under the proceeds of crime legislation".  I encourage people to think about their actions, their possible consequences, and the morallity, and at times legality, of those actions. Blind obediance to the law - "I was following orders" - is an excuse that didnt work for the Nazi's, and which wont work today if you find yourself being sued for submitting an unwarranted SAR. 

I await your apology.

 

 

 

 

@ David

Your anology is severely flawed - see above.

 

It strikes me that ,

The Black Knight | | Permalink

You are finished if you do and finished if don't, as neither side will have any respect for the accountant involved.

Choose free board and lodgings either at HMP or the Loony bin.

perhaps SARs should be worded so as to keep evidence (that will not have been provided with the SAR) in reserve so the defence get a surprise.

Or made anonymously, perhaps even using a pen name for the MLRO, no ID was ever checked for this.

I do not relish being bullied by the police or defence counsel.

Perhaps a few accountants will hang themselves first.

SARs by their very nature should be confidential, No exceptions.

 

 

I wonder what the answer would be ?

The Black Knight | | Permalink

Why did you make a report ?

Because I was being bullied with the threat of five years inside, I made the report to save myself, not very honourable I know.

davidwinch's picture

Application for disclosure

davidwinch | | Permalink

C_D

Your point seems to be that the defence may apply to the judge to have an SAR disclosed.  Whether the judge will order that disclosure depends upon whether the test in s7A CPIA 1996 is satisfied.  That is whether it is material which "might reasonably be considered capable of undermining the case for the prosecution against the accused or of assisting the case for the accused".

Let us suppose I am a discreditable liar and ne'er do well and that I make an allegation that my neighbour is a drug dealer.  A police investigation follows and the police find evidence that my neighbour is indeed a drug dealer.

It is the police evidence that will form the case against my neighbour and which will be presented at court.  The prosecution will not rely upon my report (quite properly) and it will not satisfy the test for disclosure in s7A.

David

Post 2 Stephen Morris..

petestar1969 | | Permalink

Do you seriously tell your clients you need to snitch on them if they don't comply, or are you joking? If you aren't joking you are probably guilty of tipping off and coud get clobbered yourself...

davidwinch's picture

Tipping-off

davidwinch | | Permalink

The relevant legislation is in s333A Proceeds of Crime Act 2002.

As you will see a tipping-off offence can occur after a Suspicious Activity Report (SAR) has been made under s330 PoCA 2002 / MLR 2007.  But for this purpose a SAR is made when it is made either internally to the firm's MLRO or externally to SOCA.

A tipping-off offence involves telling someone (outside your own firm) that a SAR has been made.

But you also need to be aware of avoiding doing anything which might impede a contemplated or actual investigation by the authorities.  In that connection see also s342.

Obviously if no report has yet been made then no investigation is underway or contemplated either, so there is no legal bar to informing a client of your statutory obligations in the event of him committing a money laundering offence. (Whether that would be a sensible thing to do is a different question!)

David

cymraeg_draig's picture

Apples v Pears

cymraeg_draig | | Permalink

Let us suppose I am a discreditable liar and ne'er do well and that I make an allegation that my neighbour is a drug dealer.  A police investigation follows and the police find evidence that my neighbour is indeed a drug dealer.

It is the police evidence that will form the case against my neighbour and which will be presented at court.  The prosecution will not rely upon my report (quite properly) and it will not satisfy the test for disclosure in s7A.

David

Posted by davidwinch on Wed, 23/03/2011 - 10:07

 

 

In your example a SAR would not have been filed.  We are discussing accountants (supposedly reputable & truthworthy) filing a SAR and that SAR triggering an investigation/prosecution. Quite simply, it is usually fairly obvious that a SAR may have triggered an investigation, and a smart defence will simply file an application for disclosure.

The prosecution cannot deny one exists and can only claim it does not meet the test for disclosure, or maybe attracts PII. Either way they have confirmed its existance, and with or without it the accountant is the obvious source of the SAR and can, and should, be called as a witness and cross examined - particularly if there is any likelihood that the SAR may have been filed maliciously.

What the prosecution relies on has no relevence to requests for disclosure, it is what the defence intends to rely upon which matters.

Incidently, as I have mentioned before, I always check the record of every police officer giving evidence, you will be surprised how many can quickly be shown to be unreliable by reference to disciplinary records, previous perjured statements to courts, etc.

 

davidwinch's picture

Witness?

davidwinch | | Permalink

C_D

If you are proposing to cross-examine a witness you are suggesting that he is called as a witness by someone other than yourself (presumably by the prosecution).  Why would the prosecution call as a witness a person who has provided no evidence which forms any part of the prosecution case?  How could you require them to produce a 'witness' who would be a witness of nothing?

As you may know, the vast majority of SARs are filed by banks and building societies - so I cannot see that the fact of a prosecution will lead to an obvious conclusion that a SAR has been submitted by an accountant.  But I do accept that the possibility that an SAR has been submitted by the accountant could occur to the defendant - and he could act on that.

There are risks for accountants arising from criminal activities.  But accountancy is not a high risk profession in that regard.  And there are ways to minimise the risks - starting with being careful about whom you take on as a client, whether you agree to handle client's funds and it what circumstances you do that, being careful how you write an SAR, and going on to how you deal with a police investigation.  Some of these areas have already been covered in other threads in this discussion group and some points are just plain common sense.

David

cymraeg_draig's picture

.

cymraeg_draig | | Permalink

If you are proposing to cross-examine a witness you are suggesting that he is called as a witness by someone other than yourself (presumably by the prosecution).  Why would the prosecution call as a witness a person who has provided no evidence which forms any part of the prosecution case?  How could you require them to produce a 'witness' who would be a witness of nothing?

Posted by davidwinch on Wed, 23/03/2011 - 10:49

 

Assuming the prosecution do not tender the witness, there is nothing to stop the defence from securing the attendance of a hostile witness.

Agreed the majority of SARs are filed by banks - but it is fairly obvious where an accountant is involved he will have filed a report - indeed if the bank does file a report, and the accountant (having had access to the clients bank statements) does not, then surely the question should be asked as to why the bank did and why the accountant didnt. Indeed this could, I suppose, indicate a failure to report by the accountant.

I disagree with your assessment that accountancy is low risk regarding money laundering - it used to be - but with increasing regulations, increasing demands for reports (snitching) etc. it is fast becoming a legal minefield.  A trusting accountant whose suspicions are not easily raised can quickly find himself facing a court being prosecuted for something that the prosecution say he "ought" to have done, rather than something he's actually done.

When money laundering referred to drug dealing etc an accountant was probably safe, but now the definition has been reduced to include almost anything, even bricklayers doing "cash in hand" jobs, every accountant is in constant danger of being inadvertantly caught up in a prosecution. 

 

 

 

 

Publicus's picture

SARs & Evidence in Court

Publicus | | Permalink

 

Previously from C_ D to Publicans  ‘I am not sure whether you are deliberately attempting to be offensive, or, whether you simply have an unfortunate manner - but this is not the first offensive posting you have made.’  

Please lighten up. I know you see yourself as the barrister’s version of Don Quixote, and this is meant as a compliment. This is a discussion site primarily for mere bean counters like myself, who must be allowed freedom of expression; it is not a Star Chamber, in which every adverse comment is taken as a personal slur on integrity and professionalism. not even barristers and High court judges are right all the time -that is why we have a court of appeal!

 

 

I have given my personal experience that in no money laundering cases in which I have been involved has the issue of a SAR been raised by the defence. In all cases it was the evidence not the intelligence gathering that was put before the court. I would find it helpful if you would indicate, in your experience as a barrister, how many times you have attempted to obtain the identity of the person making the SAR and how many times you have been successful in your requests!    

 

 

I have given my view, that based upon your postings you appear to trying  to encourage accountants in practice to have as little to do as possible with honouring their legal responsibilities under the proceeds of crime legislation.  Your response was ‘I encourage people to think about their actions, their possible consequences, and the morality, and at times legality, of those actions.’ When accountants seek advice from lawyers it is on matters of the law. If I am troubled by issues concerning morality I may consult a priest or philosopher but counsel’s opinion is meant to clarify a legal opinion. I am therefore somewhat surprised that as an officer of the court you would offer accountants advice  as to the ‘the morality, and at times legality, of those actions.' The accountants who consult lawyers expect them at all times to reflect the legality of proposed courses of action- that is why they consult lawyers in the first place.     

cymraeg_draig's picture

Publicus

cymraeg_draig | | Permalink

I would find it helpful if you would indicate, in your experience as a barrister, how many times you have attempted to obtain the identity of the person making the SAR and how many times you have been successful in your requests!    

Posted by Publicus on Wed, 23/03/2011 - 14:22

 

I don't deal with boring fraud cases, having specialised for many, many years in rape/sexual assault cases with occasional forays into police corruption cases and various other spheres of criminality. However, identifying and examining the veracity of any "informant" is always a course worth pursuing. I am not stating that in every case it will prove fruitful in defending a client, but, it is always a worthwhile course. You might be surprised how often it can be shown that investigations / prosecutions begin with a malicious allegation made by someone seeking some kind of "revenge" against the defendant.  

I would never, ever, rely on a police investigation as being anything more than biased at best. Police dont "investigate" - they make up their mind who they think is guilty, then set about looking for any evidence which supports their case whilst ignoring lines of enquiry that point away from their suspect. That is the reality of how the police work.

For that reason any decent defence will carry out its own thorough investigation, and that includes taking an in depth look at every witness or potential witness. There is no quicker way to undermine a prosecution that to show that their witness has a history which makes them unreliable.

 

_________________________________________________________

I have given my view, that based upon your postings you appear to trying  to encourage accountants in practice to have as little to do as possible with honouring their legal responsibilities under the proceeds of crime legislation.  Your response was ‘I encourage people to think about their actions, their possible consequences, and the morality, and at times legality, of those actions.’ When accountants seek advice from lawyers it is on matters of the law. If I am troubled by issues concerning morality I may consult a priest or philosopher but counsel’s opinion is meant to clarify a legal opinion. I am therefore somewhat surprised that as an officer of the court you would offer accountants advice  as to the ‘the morality, and at times legality, of those actions.' The accountants who consult lawyers expect them at all times to reflect the legality of proposed courses of action- that is why they consult lawyers in the first place.     

 

Posted by Publicus on Wed, 23/03/2011 - 14:22

 

You seem to be labouring under the mistaken idea that the law is black and white - it isnt. The law is constantly evolving, politicians may pass laws, but it is the courts, not the politicians, who intepret those laws and balances them against other, sometimes contradictory laws, especially european laws such as the HRA which overrides anything the muppets in Westminster might pass.

Of course morality is a consideration. The Nuremburg defence of "I was only following orders" does not wash.

Perhaps you think that we are all mere drones, dry as dust, simply regurgitating assorted Acts as required?  If thats what you want, buy a law book. My purpose is to represent my client by all means possible within the legal framework, and if that means challenging poor laws, and forcing a new interpretation then so be it.

If you believe that the law is so black and white, and that bad law shouldnt be challenged, then you are exactly what the control freaks in parliament want.

I also try to encourage everyone to consider the possible repercussions of filing a report - the potential for being subjected to threats of violence, or worse - the potential for being sued should your motives for filing it be less than pure - and the inevitable damage to your business when other clients leave in their droves.

In other words, it is  not a step which should be taken lightly.

 

 

Gerard Murray's picture

Confidentiality of SARs

Gerard Murray | | Permalink

 

 

 

In a previous thread I drew attention to Home Office guidelines on Confidentiality & Sensitivity of SARs , Circular 53/2005. Unfortunately, on the Home Office website this is a summary of a much more wide ranging document by the same name, which is better accessed through the Soca  website entering 'confidentiality and SARs ' in search.  

The following comments are relevant to  the present debate- 

'The content of the SAR will frequently be relevant to an investigation. Retained material which may be relevant to an investigation must be revealed to the prosecutor on a schedule of non-sensitive or sensitive material. The schedule of non-sensitive material will also be revealed to the defence... 

individual SARs are given in confidence...The safety of the reporters is a prime consideration. Under paragraph 6.12 of the Code of Practice, another example of material which may be sensitive is material relating to identity of persons supplying information to the police who may be in danger if their identities are revealed... 

items meeting the ‘sensitive’ test... remain hidden and undisclosed to the defence.

 

 

cymraeg_draig's picture

Sensitivity ?

cymraeg_draig | | Permalink

items meeting the ‘sensitive’ test... remain hidden and undisclosed to the defence.

 

Posted by Gerard Murray on Wed, 23/03/2011 - 17:26

 

Except, of course, where an application is made to the court by the defence. Whilst something attracting PII might remain undisclosed, the courts will not view the identity of the person submitting a SAR to be something that should be withheld from the defence unless it can be shown that there is a credible and very real liklihood that their life would be put in danger. 

Where a SAR exists it is only reasonable that the maker of that report should be available for the defence to examine. Whether that will assist the defence is, of course, something to be considered on a case by case basis by the defence. 

 

Quote from today's budget

Stephen Morris | | Permalink

In our professional and business services, one of our unsung success stories, we will reform our burdensome money laundering regime, promote the UK as the global centre of legal arbitration, and launch a new trusted business visa service. (My emphasis)

Yubba Dubba Do!

Gerard Murray's picture

Confidentiality and Sensitivity

Gerard Murray | | Permalink

C-D Interesting points regarding the issues of confidentiality and sensitivity. My understanding of the Home Office circular is that where the items contianed in the SAR are 'sensitive' but do not meet the 'disclosure' test then they remain hidden and undisclosed to the defence. 

However, where they meet the disclosure test then a hearing under Public Interest Immunity (PII) will be required. PII replaces the concept of Crown Privilege and means that in considering whether to allow evidence to be admitted, the court must balance the public interest which is served by maintaining confidentiality against the interests of justice in ensuring that the best evidence is availabel to the court. 

 

However the Home Office circular then outlines guidance provided in a previous House of Lords judgment, H & C  which, in its opinion, reinforces the disclosure test under the Criminal Procedure & Investigations Act 1996-'there is no duty to disclose material that is neutral or that is damaging to the defendant: . It then makes a very practical point- 'Any underlying SAR may tend to strengthen the prosecution case or be neutral, in which case there is no requirement to disclose it.' My own experience is that SARs tend to either strengthen the prosecution case and this appears to be the reason why so few are ever challenged by the defence, which focuses on issues of evidence such as the forensic accountant's report commissioned by the prosecution.

I would be interested to hear from any professional in the regulated sector who has made a SAR and been subsequently unmasked.   

 

 

 

Gerard Murray's picture

Budget Quote of the Day

Gerard Murray | | Permalink

Stephen posted 'we will reform our burdensome money laundering regime.'

 

The devil is always in the detail  and it might be some time before we see the concrete proposals. Best advice to the Chancellor is to have him sign up to this Discussion Group!He can always remain anonymous with a name like the Bullingdon Bandit 

cymraeg_draig's picture

Told you

cymraeg_draig | | Permalink

Stephen posted 'we will reform our burdensome money laundering regime.'

 

Posted by Gerard Murray on Wed, 23/03/2011 - 23:19

 

I did tell you that consultations were taking place (you'd be surprised how many accountants and legal professionals are members of the Conservative Party).

I think you will find it is to be ammended to fulfill its original intention - tackling terrorism and serious crime, not tax fiddling sub contractors and shoplifters.

Unless your clients name is Bin Laden or offers you some white powder in leiu of your fees, you may soon be able to worry much less about money laundering reports.

 

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