POCA prohibits receiving, dealing with, or being concerned in a transaction which facilitates (by whatever means) the retention or movement of the “proceeds of crime”. Under POCA, “proceeds of crime” means any known or suspected benefit arising from criminal conduct. The offences are broadly drawn and there are few useful exceptions to them. There is a carve out for criminal conduct which is illegal in the UK but legal in the country in which it occurs (the so-called “Spanish Bullfighter” exception). Some UK companies have sought to rely on the Spanish Bullfighter exception in dealing with overseas cannabis-related businesses but the exception only applies to offences which in the UK would result in a maximum custodial sentence of 12 months or less, whereas the maximum sentence in the UK for supplying or being concerned in the production of cannabis is 14 years.
UK companies and financial institutions could potentially be penalised for entering into commercial transactions with cannabis businesses (for example insuring or investing in a cannabis-related business, or receiving funds from a cannabis-related business for services or goods provided). Those within the UK regulated sector (including banks, accountants, insurers, and lawyers acting on transactions) could also face sanctions for failing to report suspicions of money laundering related to dealings with cannabis-related businesses by means of a suspicious activity report. FCA and PRA regulated firms and individuals may also need to consider their broader regulatory obligations.
The issue extends beyond those dealing directly with cannabis-related businesses: UK entities which do not transact with those businesses, but, for example, receive funds by way of dividend or cash pooling from a Canadian group company which does so, could also be caught by POCA because they may receive or deal with monies which are arguably tainted (the concept of fungibility means that even a small amount of criminal property can taint a wider asset, for example money in a bank account). There would also be potential issues for banks and asset managers receiving or being involved in the movement of funds from individual investors or owners of cannabis-related businesses.