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Upper Tribunal should correct its money laundering warning to immigration solicitors
Credit: Nik MacMillan on Unsplash

Upper Tribunal should correct its money laundering warning to immigration solicitors

R (Shrestha & Ors) v Secretary of State for the Home Department (Hamid jurisdiction: nature and purposes) [2018] UKUT 242 (IAC) was another in the recent line of ‘Hamid’ cases in which the High Court and Upper Tribunal metaphorically publicly flog immigration lawyers who do not meet their own exacting standards.

There is a fine line between acting on your client’s instructions even though their case is weak, and taking forward a case that is wholly without merit and thus amounts to an abuse of process. Occasionally in these Hamid cases I have wondered whether the High Court and the Upper Tribunal (and subsequently the Solicitors Disciplinary Tribunal in the cases where immigration solicitors have been prosecuted) have drawn the line in the right place.

This does not seem to be an issue in this case as, from the facts disclosed, it seems to be a simple matter of appalling incompetence. Therefore, there is not much to comment on about the facts, other than to note with pleasure that the President does acknowledge that immigration law is “difficult and demanding” and it is only a minority of immigration lawyers who are failing in their professional responsibilities. The official headnote in full as is follows:

(1) The “Hamid” jurisdiction of the High Court and the Upper Tribunal exists to ensure that lawyers conduct themselves according to proper standards of behaviour. The bringing of hopeless applications for judicial review wastes judicial time and risks delaying the prompt examination of other cases, which may have merit. In many cases, the only tangible result of such an application is that the applicant incurs significant expense.

(2) Solicitors who practise in the difficult and demanding area of immigration law and who are properly discharging their professional responsibilities can only safely enjoy the recognition they deserve if the public is confident appropriate steps are being taken to deal with the minority who are failing in their professional responsibilities.

There is, though, a highly concerning aspect of this decision that is very important to immigration lawyers, although it does not relate directly to immigration law.

Inaccurate statement of the law on money laundering

Paragraph 21 states:

In answer to questions from Upper Tribunal Judge Lindsley, it was apparent that Mr Ali was unaware of the obligations of Harrow Solicitors under money-laundering legislation, whereby money received from clients which is considered to come from illegal earnings must be the subject of reporting to the relevant authority [emphasis added].

Is this statement correct? The short answer is no, but further explanation would be helpful.

Money earned by a client from working illegally or evading tax, or money from benefits (including asylum support) to which the person is not lawfully entitled, is the proceeds of crime. Therefore there is the possibility of an immigration lawyer committing a money laundering offence when dealing with client money which they have a reasonable suspicion contains the proceeds of crime.

Under section 329 of the Proceeds of Crime Act 2002 a solicitor will have a defence to possessing known or suspected criminal property where they have provided “adequate consideration”. The Crown Prosecution Service guidance for prosecutors says the defence applies where professional advisors, such as immigration lawyers, receive money for or on account of costs, whether from the client or from another person on the client’s behalf. Disbursements are also covered. The fees charged must be reasonable, and the defence is not available if the value of the work is significantly less than the money received.

Contrary to the statement in paragraph 21 of the Upper Tribunal decision, an immigration lawyer will not require consent from the National Crime Agency (NCA) to receive such funds into their account.

This is not necessarily the end of the matter. The real difficulty is when a client provides you with money (which you know or reasonably believe to be from the proceeds of crime) on account of your costs and perhaps also on account of Home Office fees or Counsel’s fees or other disbursements, and then changes their mind and does not wish to proceed. Returning the balance of an account to a client may be a money laundering offence if you know or suspect the money is criminal property. In that case, you must make an authorised disclosure and obtain consent from the NCA to deal with the money before you transfer it.

The best possible advice when you have any concerns about money laundering issues is to discuss matters with your firm’s Money Laundering Reporting Officer (MLRO) as soon as possible. Your MLRO has legal responsibility to receive reports from others, consider them and where appropriate pass them on and will usually be responsible for your firm’s compliance with the money laundering regulations. I am my firm’s MLRO and have been for many years. It is an extremely interesting and challenging role, particularly in a firm such as mine which has a large property department. It is also very responsible. As I keep telling my staff: be cautious, always discuss suspicions with me and ultimately my decisions are final as it is me that will go to prison if we get it wrong!

Anti-money laundering rules can be a complex issue with very serious consequences for lawyers and the matter is really not helped by the President making inaccurate statements in reported decisions. I hope that the Upper Tribunal will publish a correction to this decision as soon as possible, preferably with links to the best possible current guidance.


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