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19 Dec 2018

Unintentionally funding terror and the implications for professionals

Consider the following statements:

  1. It is wrong to fund terrorism.
  1. It is right to criminalise those who intentionally fund terrorism.
  1. It is right to expect citizens to take reasonable care to avoid unintentionally funding terrorism.
  1. It is right to criminalise those who carelessly albeit unintentionally fund terrorism.

The first three will receive universal approval, but the fourth requires some thought.

Whilst (4) may be an effective means of enforcing (3), it tramples on the presumption that serious criminal sanction should only result from a guilty mind, whether that is characterised as intention, knowledge, recklessness or suspicion.

The Supreme Court judgment in R v Sally Lane and John Letts (AB and CD) [2018] UKSC 36[1] makes clear that providing financial support for terrorism is an offence, where Parliament intended to create criminal liability notwithstanding the absence of any of the above four types of mens rea.

The judgment has implications far removed from any terrorist scenario. In particular, for regulated professionals, who may encounter an analogous scenario in the form of their obligations to report knowledge or suspicion of money laundering under s330 Proceeds of Crime Act 2002 (‘POCA’). This article will explain why.

Ms Lane and Mr Letts (‘the Defendants’) were charged with entering into funding arrangements connected with terrorism contrary to s17 Terrorism Act 2000 (‘TACT’). They sought dismissal of their prosecution which the trial judge rejected. They launched an interlocutory appeal concerning the judge’s ruling on the meaning of s17 TACT. The Court of Appeal upheld the first instance decision and the matter came before the Supreme Court on 19 April 2018.

Section 17 TACT reads as follows:

  1. Funding arrangements.

A person commits an offence if –

  • he enters into or becomes concerned in an arrangement as a result of which money or other property is made available or is to be made available to another, and
  • he knows or has reasonable cause to suspect that it will or may be used for the purposes of

The question for the Supreme Court concerned (b) and whether ‘the accused must actually suspect, and for reasonable cause, that the money may be used for the purposes of terrorism? Or is it sufficient that on the information known to him there exists, objectively assessed, reasonable cause to suspect that may be the use to which it is put?’ (per Lord Hughes at para 4).

The Defendants argued that the presumption that an offence-creating provision should be construed to include a mens rea was not displaced by the wording of s17 TACT, and so the former was the correct interpretation. This was particularly so given that the offence was a serious one in comparison with minor and/or regulatory offences, where it was obvious that Parliament had intended to impose strict liability. The words were capable of either meaning and so the court should resolve the ambiguity in their favour.

Having considered the authorities on the presumption of mens rea relied upon by the Defendants, Lord Hughes turned to the evolution of terrorist funding offences in the UK. Such offences were introduced by the Prevention of Terrorism (Temporary Provisions) Act 1976, which made no reference to reasonable cause for suspicion. Rather, a defendant had to actually know or suspect the eventual use of the property for terrorism purposes in order to be convicted.

This drafting survived the subsequent 1984 statute but was revised by the Prevention of Terrorism Act 1989, which provided for guilt where the defendant made assets available ‘knowing or having reasonable cause to suspect that they would or might be use for terrorism purposes. This change, considered Lord Hughes, could only have been deliberate and showed an intention by Parliament to widen the scope of the offence and ‘remove the requirement for proof of actual suspicion’ (para 19). Such drafting had remained in TACT, and it was ‘not open to the court to ignore this kind of clear Parliamentary decision’ (ibid.)

Lord Hughes compared the wording of s17 TACT to that of s18 TACT, which concerns laundering property connected to terrorism and includes a defence of not knowing and not having ‘reasonable cause to suspect’, and s19 TACT, which concerns failure to report suspicions of terrorism and can only be committed where the defendant ‘believes or suspects’.  Parliament had clearly given some thought to the differing mental states which should apply to the various TACT offences. He held that had it been intended that s17 could only be committed by those with actual suspicion, the wording of s19 would have been applied.

The point was further emphasised by the drafting of a subsequent addition to TACT (s21A, added by the Anti-terrorism, Crime and Security Act 2001), which created an offence for those operating in the regulated sector of failing to disclose information suggesting terrorist offences committed by another. The first condition required to commit the s21A (2) TACT offence is as follows:

“(2) The first condition is that he –

  • knows or suspects, or
  • has reasonable grounds for knowing or suspecting, that another person has committed or attempted to commit an offence under any of sections 15 to 18.”

Lord Hughes held that ‘it is plain beyond argument that the expression “has reasonable grounds for suspicion” cannot mean “actually suspects” (para 22).

Lord Hughes rejected the argument that his construction of the offence meant that it was one of strict liability. He observed that it could not be committed where the defendant was completely ignorant of the circumstances that formed the actus reus of the offence. Rather, the relevant exercise for the jury was to consider the information the defendant had at the time of the alleged offence and to decide whether this should have given a reasonable person grounds for suspicion. For this reason, s17 TACT was not an offence of strict liability because the mind-set of a person with such knowledge could not be ‘accurately described as in no way blameworthy’ (para 24).

As such, the Supreme Court concluded that the Crown Court and Court of Appeal were correct in their interpretation of s17 TACT, and so it was open to the jury to convict even if they conclude that the Defendants did not actually know or suspect the eventual use of the funds.

Implications for failure to report suspicions of money laundering

Those working in the regulated sector will recognise that the wording of s330 POCA mirrors that of s17 TACT:

330 Failure to disclose: regulated sector

(1) A person commits an offence if [the conditions in subsections (2) to (4) are satisfied] 1 .

(2) The first condition is that he—

(a) knows or suspects, or

(b) has reasonable grounds for knowing or suspecting,

that another person is engaged in money laundering.

With this in mind, Lane & Letts supports the argument that s330 is not an offence of negligence (i.e. one which can be committed in ignorance of information related to the substantive offending). In particular, it would be incorrect to contend that the prosecution need not prove any mental element on the part of the defendant. Rather, the prosecution must prove that the defendant was actually aware of the information that the prosecution says constitutes reasonable grounds for knowledge or suspicion. As such, both s17 TACT and s330 POCA have a mens rea closer to recklessness than negligence. Although the defendant might deny that he saw the ‘risk’ (i.e. had a suspicion), he is guilty if the prosecution can successfully prove he was nonetheless aware of the facts which, when objectively assessed, would have provided the reasonable grounds for knowledge or suspicion.

This approach is also supported by the recent Court of Appeal decision on an offence with a markedly different actus reus but a similar approach to mens rea. In quashing the gross negligence manslaughter conviction of Honey Rose in 2017, the Court of Appeal held that, when assessing whether there was a serious and obvious risk of death (a necessary element of the offence), the jury should refer to the knowledge actually held by the defendant at the time. The jury should not decide its verdict based on what the defendant ought to have known if he or she had acted competently. In the case of Honey Rose, this meant that the jury should have disregarded what she would have known had she acted competently and carried out the examination which would have revealed symptoms indicative of her patient’s fatal condition.

The lesson to be drawn from Honey Rose and Lane & Letts is that, whilst some offences of unintended consequence may on first reading appear to criminalise conduct irrespective of mens rea, the courts have repeatedly decided that these are not strict liability offences, and that some proof of a culpable mental state is required. As such, both judgments are good news for regulated professionals, who can take comfort that a prosecution under s330 POCA is unlikely to succeed where the suspect information is merely available but not actually known to the defendant.

[1] https://www.supremecourt.uk/cases/docs/uksc-2017-0080-judgment.pdf

This article was published in Lawyer Monthly and CrimeLine. A shorter version of this article was published in The Law Society Gazette here

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