• In the case of R v Saik [2006] UKHL 18, it was established that although there were reasonable grounds for the substantive offence of money laundering, these did not apply for the conspiracy to commit this offence.
  • D did not know and did not intend to use the money in a criminal activity that D and his co-conspirators were planning to carry out

Facts of the Case

  • D ran a currency exchange office (bureau de change) in London
  • D was given money (pound sterling) for a foreign currency conversion and this large quantity of money was the profit of drug trafficking activities or other lawbreaking dealings
  • D had suspected that the money could have originated from illegal activities, but had not been certain as to that
  • D was charged for conspiracy for money laundering as per the Criminal Law Act 1977 s.1(1)
  • s.1(1) of the Criminal Law Act 1977 provided that the mens rea of the offence involved making an agreement with the co-conspirators first, after which the positive course of a conduct would satisfy the commission of the crime
  • Under s.1(2) of the Act, a further requirement on the mens rea was laid down in that D ought to have intended or known facts as to committing the crime (with suspicion being insufficient)
  • D pleaded guilty because of his previously mentioned suspicions

Issues in R v Saik [2006] UKHL 18

  • D appealed against his conviction
  • The primary issue in this case concerned whether the grounds for suspicion relevant to the offence of money laundering (i.e. the substantive offence) were also applicable to the conspiracy for committing this breach of the law
  • It was the burden of the prosecution to prove D’s intention and not mere suspicion

Held by the House of Lords

  • Appeal allowed – held that D was not guilty as he could not have known that by agreeing to convert the currency, he was about to convert capital obtained from drug trafficking
  • At the time of the currency exchange, D lacked the mens rea for the offence due to the absence of his precise knowledge on the origin of the money
  • R v Montila (Steven William) [2003] EWCA Crim 3082, [2004] 1 WLR 624, [2003] 11 WLUK 29 was applied to this case

Lord Nicholls 

Lord Nicholls allowed the appeal and outlined what the legislation stated and clarified how it operated by listing examples of conspiracies to commit different criminal offences, referencing Parliament and the Law Commission in his judgement

  • Lord Nicholls stated: “In my view, therefore, the preferable interpretation of section 1(2) is that the subsection applies to all offences. It applies whenever an ingredient of an offence is the existence of a particular fact or circumstance. The subsection applies to that ingredient.” [21]
  • Lord Nicholls was hesitant as to whether the phrase ‘know’ equated to ‘believe’: “Does “know” in this context have the meaning attributed to it in the Montila case when considering the substantive offence? If it does, the identified property to which the conspiracy related must actually be or represent the proceeds of crime, and the conspirator must be aware of this. Or does “know” in this context mean “believe”, as seems to be suggested in R v Ali [2006] 2 WLR 316, 335, para 98?” [25]
  • Lord Nicholls rejected the ‘believe’ interpretation of ‘know’
  • As D accepted a guilty conviction, Lord Nicholls disagreed that suspicion gave ground to this acceptance of the verdict: “Again I cannot agree. I readily accept that, evidentially and inferentially, it is a short step from proof that the defendant’s purpose was to assist someone to avoid prosecution to a conclusion that the defendant was aware the property had an illicit provenance. But that is an evidential inference. That step cannot properly be taken on the basis of a qualified plea which expressly proceeds on the footing of suspicion only.” [35]

Lord Steyn

Lord Steyn agreed with Lord Nicholls’ analysis, stating briefly:

  • “I have found the legal analysis set out in the opinion of my noble and learned friend Lord Nicholls of Birkenhead compelling. For the reasons Lord Nicholls has given I would also allow the appeal and set aside the Appellant’s conviction.”

Baroness Hale

Baroness Hale corroborated Lord Nicholls’ points and added that she recognised the different degrees of conditional intent

  • “Without that actual suspicion, he cannot act with the purpose required.” [102]

Lord Brown

Lord Brown allowed the appeal in attacking the prosecution for their usage of the offence and drew a distinction between the current case and handling offences

  • “Without that actual suspicion, he cannot act with the purpose required.” [102]
  • “I should say at this stage that the problem arising here is not one that arises in the context of handling offences. Handling is committed by those who know or believe that the goods are stolen. True, the offence is not committed if the goods, albeit believed stolen, in fact prove not to be. But if an agreement is made to handle goods believed to be stolen I for my part would have little difficulty in concluding for the purposes of section 1(2) of the 1977 Act that the conspirators intended or knew that they would be stolen.” [119]
  • “As Lord Hope makes plain, the reality here is that the Crown is using the offence of conspiracy purely as a device to circumvent the problems caused in England (although not, it appears, in Scotland) by the duplicity rule.” [123]