327 to 329 of the UK Proceeds of Crime Act 2002 DO NOT have extra-territorial effect

The UK Supreme Court has found that offences under sections 327 to 329 of Proceeds of Crime Act 2002 do not have extra-territorial effect.

• This means that these sections, which deal with money laundering offences, cannot be applied to actions that occur outside the UK.
• This ruling has important implications for how money laundering cases are prosecuted, particularly those involving international transactions.
• It also clarifies that the UK authorities CANNOT pursue money laundering charges under these sections for activities conducted entirely outside the UK.

This arises as an important secondary issue in the context of a contested extradition.

• The USA requested the extradition of the appellant, a dual UK/Lebanese national living in the UK accused of insider dealing.
• The main judgment relates to the correct test for an extradition request made where the conduct takes place outside the jurisdiction.

See El-Khouri v Government of the United States of America [2025] UKSC 3 (12 February 2025).

• https://supremecourt.uk/uploads/uksc_2023_0127_judgment_5c217fbde6.pdf
• https://www.casemine.com/judgement/uk/67ace8ac3904d92542ace8d1#:~:text=Mr.%20El-Khouri%2C%20a%20dual%20UK%20and%20Lebanese%20national,received%20about%20merger%20negotiations%20involving%20six%20US-based%20companies.

An issue arose during the El-Khouri v Government of the United States of America appeal regarding

• The decision of the Court of Appeal in R v Rogers [2014] EWCA Crim 1680 and four decisions of the High Court in extradition cases in which

• Rogers was regarded as binding authority for the proposition that the substantive money laundering offences under sections 327 to 329 of the Proceeds of Crime Act 2002 (POCA 2002) have extra-territorial effect.

• Rogers was convicted under section 327(1)(c) of POCA 2002.
• He appealed on the basis that the UK did not have jurisdiction because all the relevant acts were committed in Spain in relation to a Spanish bank account.

The Court of Appeal rejected that argument on the basis that

• "Provision at section 340(11)(d) that money laundering is an act which would constitute an offence (including one under section 327) if done in the UK, appears to admit of no other construction than that Parliament intended, extra-territorial effect to this legislation".
• The court held that Rogers failed to recognise that section 340(11)(d)

• Merely defines "money laundering" and
• Does not either create an offence itself or
• Extend the territorial scope of the offences created by sections 327, 328 and 329 to acts done abroad.

• The court held that Rogers was wrongly decided.

• Acquiring, using or possessing in the USA money which represents the proceeds of a crime in the USA
• Cannot constitute an offence under section 329 of POCA 2002.

SOURCE

• https://supremecourtuk.co.uk/uploads/uksc_2014_0035_judgment_9d9b80b58c.pdf
• https://www.supremecourt.uk/cases/judgments/uksc-2023-0127