This updated guide from the National Crime Agency (NCA) provides crucial information for lawyers on how to request a defence against money laundering and terrorist financing offences under the Proceeds of Crime Act 2002 (POCA) and the Terrorism Act 2000 (TACT).
The document emphasises the importance of understanding Part 7 of POCA and Part 3 of TACT. It clarifies that the term ‘consent’ is now referred to as a ‘defence to a money laundering offence’ or ‘defence to a terrorist financing offence,’ and it does not imply NCA approval of funds as clean. Lawyers should ensure they are familiar with anti-money laundering guidance from their professional bodies i.e. LSAG.
To request a defence, a Suspicious Activity Report (SAR) must be submitted through the secure SAR Portal on the NCA website. The report should specify whether it is under POCA or TACT and whether a defence against money laundering or terrorist financing is requested. Detailed information about the entities involved, the nature and value of the suspected criminal property, and specifics of the transaction or arrangement must be included.
After submission, a seven-working-day notice period begins during which the NCA will assess the information. They may seek additional information during this time. Decisions are based on proportionality and necessity, with a focus on the likelihood of a law enforcement response. A granted letter provides a defence but does not relieve the reporter of other regulatory and legal obligations. A refusal letter means no defence is granted until the end of the moratorium period (for POCA) or until further notice (for TACT).
Lawyers must ensure compliance with financial sanctions and refer to relevant guidance on terrorist groups, sanctions, and trade restrictions. Confidentiality of SARs must be maintained, and tipping off clients about investigations should be avoided. If a SAR must be disclosed in private litigation, the NCA should be informed to manage risks of prejudicing investigations.
The guide should be considered essential reading for law firm MLROs and should be flagged to wider teams to consolidate AML training. MLCOs should review the AML policy to ensure that it is consistent with the latest guidance.
