Anti-Money Laundering Case Update
The recent case of Iraj Parvizi v Barclays Bank  EWHC B2 (QB) was heard in the High Court on 21 May 2014. Key themes considered in the case were the Proceeds of Crime Act 2002 ("the Act") and the meaning of suspicion giving rise to disclosures required under Part 7 of the Act where money laundering activities are suspected.
The claimant, Mr Parvizi, claimed that he had suffered considerably because Barclays Bank had denied him access to his funds at a critical time. If Barclays had allowed access to the funds, Mr Parvizi claimed that he would have been able to make substantial gains through his betting activities.
The bank had submitted a suspicious activity report under the Act relating to Mr Parvizi's account. In addition to this, the bank had applied for consent to comply with Mr Parvizi's instructions and transfer funds to him. This required consideration of the meaning of 'suspicion' under the Act. The case of R v Da Silva  EWCA Crim 1654 established that any suspicion of suspicious activity must be 'more than fanciful' and that a 'vague feeling of unease' would not be sufficient to constitute suspicion.
The court also considered the case of Shah v HSBC Private Bank (UK) Ltd  EWHC 1283 which established that it was for the bank, as the party asserting suspicion, to establish the primary fact of the suspicion in order to justify not following Mr Parvizi's instructions to transfer funds to him.
Following standard disclosure by both sides (which did not take place in Shah), the bank's suspicious activity report was criticised for a lack of logic and detail. Nevertheless, the court decided that evidence produced by an analyst in the bank's anti-money laundering team did evidence a clear suspicion of money laundering which more than merely 'fanciful'. On that basis, there was no reason why this case should proceed to trial, it had no real prospect of success and it was struck out.