John Binns speaks with CDR Magazine in their article ‘Legal cannabis investment carries POCA risk’

John Binns speaks with CDR Magazine in their article ‘Legal cannabis investment carries POCA risk’

BCL partner, John Binns discusses with Commercial Dispute Resolution (CDR) magazine the Proceeds of Crime Act risk to UK investors of legal cannabis companies.

Here’s a short extract from the article which is available in full on the CDR website*:

‘As legal cannabis becomes a multi-billion dollar industry in the US, Canada and beyond, UK investors in cannabis corporations risk falling foul of the Proceeds of Crime Act. CDR speaks to corporate crime practitioners about potential exposure.

With the size of the global legal cannabis industry estimated to reach upwards of USD 65 billion in the next five years, and mass legislative reform in the United States and Canada having led to an increase in companies listing on reputable exchanges such as NASDAQ, many institutional and individual investors in the United Kingdom already have skin in the game.

However, without clear guidance as to the legality of receiving legal cannabis-related profits or dividends into UK bank accounts, there are concerns over whether participating in such investment activity is in breach of the UK Proceeds of Crime Act 2002 (POCA).

John Binns, a partner at BCL Solicitors, says that due to a 2006 Order, “unhelpfully… a specific defence for lawful overseas conduct has been removed for all but the least serious offences”.

…pointing to the English and Welsh Court of Appeal’s ruling in R v Rogers in 2014 which considered the jurisdictional scope of POCA and held that its money laundering provisions apply globally, “so even non-UK companies are caught”; albeit he acknowledges that many practitioners doubt the judgment “and it’s hard to make it workable in practice”.

One suggestion “for the more risk-averse investor” is to obtain consent for that investment under POCA by making a disclosure and waiting for a statutory period to expire if the NCA makes no objection to the disclosure, he says, which “reduces the criminal risk to zero”, something his firm has done for a few of its clients.’

*This article was originally published by CDR on 30th October 2019.



John Binns is a partner at BCL specialising in all aspects of business crime, with a particular interest in confiscation, civil recovery and money laundering under the Proceeds of Crime Act 2002 (“POCA”). His business crime experience includes representing suspects, defendants and witnesses in cases invoking allegations of bribery and corruption, fraud (including carbon credits, carousel/MTIC, land-banking, Ponzi and pyramid scheme frauds), insider trading, market abuse, price-fixing, sanctions-busting, and tax evasion. He has coordinated and undertaken corporate investigations and defended in cases brought by BEIS, the FCA, HMRC, NCA, OFT, SFO and others.