ECSH82835 - Sanctions for non-compliance: financial penalties: financial penalties framework: definition of deliberate

There is no legal definition of ‘deliberate’. Dictionary definition of deliberate is intentional or planned. Tribunals have found that deliberately means intentionally or knowingly.

Deliberate behaviour is when a person

  • knows what they are supposed to do
  • can do what they are supposed to
  • does not do it

Deliberate acts are done consciously. You must establish the behaviour and have sufficiently strong evidence to demonstrate that the behaviour was deliberate.

The case most often referred to in Tribunal decisions when determining the definition of deliberate behaviour is Auxilium Project Management Ltd [2016] UKFTT 249 (TC)

“In our [the Tribunal’s] view, a deliberate inaccuracy occurs when a taxpayer knowingly provides HMRC with a document that contains an error with the intention that HMRC should rely upon it as an accurate document. This is a subjective test. The question is not whether a reasonable taxpayer might have made the same error or even whether this taxpayer failed to take all reasonable steps to ensure that the return was accurate. It is a question of the knowledge and intention of the particular taxpayer at the time.”

The burden of proof lies on HMRC to show that deliberate behaviour has occurred, and that evidence must meet the evidential standard required by the tribunal or courts.

Deliberate behaviour does not only involve ‘deliberately acting’, it also covers ‘deliberately failing to act’

The case of REGINA v Griffiths & Anor | [2007] 1 Cr App R (S) 95 | England and Wales Court of Appeal (Criminal Division) | Judgment | Law | CaseMine, the lawyer should reasonably have known his clients were involved in Money Laundering but chose to turn a blind eye.  Griffiths was sentenced to 15 months in prison for failing to report suspicions as required under S.330(1) POCA 2002 (reduced to 6 months on appeal)

Another example is in the case of (Ahmad v HM Advocate [2009] HCJAC 60 - the relevant persons, see ECSH160000 for the definition of a relevant person, in a money service business (MSB) were convicted under S330 of the Proceeds of Crime Act 2002 (POCA) for failing to file Suspicious Activity Reports (SARs)

“knowing, suspecting or having reasonable grounds for suspecting that WILLIAM ANTHONY GURIE (their customer) was engaged in money laundering”.

In both cases, given their training and capability to perform in a key role, the lawyer (a professional in supervised authority) and the relevant persons, see ECSH160000 for the definition of a relevant person, should have suspected and therefore filed a SAR.

The case of Regina v Turbill and Broadway [2014] 1 Cr.App.R. 7, the Court applied the meaning of ‘wilful neglect’ (as set out in R v Sheppard [1981] A.C. 394) to an offence contrary to section 44 of the Mental Capacity Act 2005. The Court stated that the term ‘wilfully’ means deliberately refraining from acting or refraining from acting because of not caring whether action was required or not. 

In conclusion, it’s not just about the business/person deliberately acting in a certain way, therefore they did know better; failing to properly implement AML controls when the business should have known better can also be classed as deliberate. This is particularly the case for fit and proper sectors (MSBs and Trust or Company Service Providers (TCSPs)), where we test their training and capability to perform in a key role.