Money-laundering report delays
Posted: 3rd November 2011
The money-laundering regulations that apply to banks compel them to notify the Serious Organised Crime Agency (SOCA) if there is a suspicion that a transaction they are being asked to complete is connected with criminal activity or the proceeds of crime. The transactions proposed are then ‘frozen’ for a period of time, which normally causes a delay of up to a week or more.
The Court of Appeal has recently confirmed, in a case in which d
amages of more than $300 million were claimed because a bank delayed carrying out various transactions whilst SOCA were dealing with its report, that if the bank’s suspicions were genuinely held, it had no liability to the customer for his losses.
If you have a large or unusual transaction, there is a chance that your bank may report it to SOCA and this may cause delay. You can take various steps to give the bank the advance assurance that it may need to avoid this course of action.
It is also sensible to make sure that any transaction that has the potential to be queried is, if possible, not subject to a tight deadline for completion.