BCL Solicitors, David Hardstaff and Daniel Jackson, have raised an important issue in relation to the Proceeds of Crime Act 2002 (POCA), anti-money laundering (AML), and the re-scheduling of cannabis based medicinal products for human use (http://www.bcl.com/a-green-light-for-business/). Others have also done so.
The problem arises in relation to the definition of “criminal conduct” in s.340(2) POCA, namely, conduct which “(a) constitutes an offence in any part of the United Kingdom, or (b) would constitute an offence in any part of the United Kingdom if it occurred there” [emphasis added].
A money laundering offence under ss.327-329 POCA is not committed if a person “(a) …knows, or believes on reasonable grounds, that the relevant criminal conduct occurred in a particular country or territory outside the United Kingdom, and (b) the relevant criminal conduct (i) was not, at the time it occurred, unlawful under the criminal law then applying in that country or territory, and (ii) is not of a description prescribed by an order made by the Secretary of State”. However, the Proceeds of Crime Act 2002 (Money Laundering: Exceptions to Overseas Conduct Defence) Order 2006, provides limited protection.
It would be a harsh result if a person fell foul of the money laundering provisions when handling, in the UK, money obtained by a reputable pharmaceutical company from the manufacture overseas (and under licence there) of a drug which, in the UK, is a “controlled drug” (MDA 1971) and not licenced for production in the UK. Can this result be avoided? It may not be tenable to say that because the company had acted under licence overseas, the same “conduct”, “if it occurred [in the UK]” (i.e., licensed production), would therefore not constitute an offence. This would be to treat the grant or absence of a licence as a circumstance of the “conduct”. If this were held to be sufficient to escape liability, then the outcome would (arguably) be more generous than the limited exception granted by the 2006 Order. In any event, as the writers point out, a “‘like for like’ comparison of the UK’s controlled drug licensing regime with that of another country is unlikely to be straightforward”. Perhaps the most satisfactory answer is to amend the 2006 Order and provide a wider exception or range of exceptions.
See also my post re the regulations in respect of CBMPs [Link]