Court of Appeal refuses to endorse guidelines for financial institutions on anti-tip off legislation: A Bank v A Limited and Serious Fraud Office

The November 2000 issue of The Money Laundering Bulletin featured commentary on the case of A Bank v A Limited and Serious Fraud Office. In the intervening period the case went back to the Court of Appeal only to see its impact reduced by the new ruling. Michael Grant of London Guildhall University reviews the judgment.

The facts revisited

In September 1999 A Limited opened sterling and dollar accounts at the bank. Substantial sums of money were transferred into those accounts. The bank became increasingly alarmed. It believed that that the money may have been obtained through prime bank instrument fraud. The bank communicated with the police, the ICC Commercial Crime Bureau and the British Bankers’ Association. As a result it learnt that investigations were being conducted into activities closely associated with A Limited. The bank faced a dilemma. If it paid out the monies held in the account it could be liable to third parties as a constructive trustee. However, if it refused to pay out it believed that it could face action for revealing that the police were conducting inquiries under section 93D of the Criminal Justice Act 1988.