In 2023, a solicitor was convicted for the first time ever for tipping off, alerting a client that they were under investigation for money laundering. It was a landmark moment.
Here is what tipping off means in practice, where the line is, and how to stay well clear of it.
Why has tipping off become a focus for law firms?
For years, tipping off appeared in AML training as a theoretical risk. Solicitors understood it was an offence, but many assumed enforcement actions were rare or confined to other sectors.
The 2023 conviction changed that perception. A solicitor was found guilty under section 333A of the Proceeds of Crime Act 2002, marking the first time a member of the legal profession had been convicted of this specific offence. The case sent a clear signal that the legal sector is within scope for enforcement and that regulators are taking a more active interest.
Understanding what tipping off means in practice, and where the risks arise in day-to-day work, is now an essential part of AML compliance.
What is tipping off under UK AML law?
Tipping off occurs when someone who knows or suspects that a Suspicious Activity Report has been made discloses information to another person in a way that is likely to prejudice any resulting investigation.
In practical terms, if a report has been submitted or is suspected to have been submitted, the firm must not inform the client. This includes avoiding any statements or behaviour that could suggest they are under scrutiny.
The offence applies across the regulated sector, including legal professionals, and carries a maximum penalty of two years’ imprisonment and an unlimited fine.
Where is the line between communication and tipping off?
Two conditions must be met for the offence to arise. The person making the disclosure must know or suspect that a report has been made, and the disclosure must be likely to prejudice an investigation.
In practice, the definition of what may prejudice an investigation is broad. Referring to delays as being due to “compliance reasons”, providing vague or evasive explanations, or indicating that a matter has been escalated internally may create risk depending on the context.
The safest approach is to avoid any reference to the existence of a report. Where a transaction is delayed, a neutral explanation such as the need to complete standard checks or allow more time is generally acceptable, provided it does not imply that a report has been made.
What is the SAR moratorium period and why does it matter?
Where a Suspicious Activity Report is submitted requesting consent to proceed with a transaction, the firm must wait for a response from the National Crime Agency.
The initial period is seven working days. If no refusal is received within that time, consent is deemed to have been granted. If consent is refused, a further 31-day moratorium period applies during which the transaction cannot proceed.
During this time, the client cannot be told why the matter is delayed. This creates a practical challenge, as clients may expect progress and seek explanations. Firms that manage this risk effectively tend to prepare standard responses in advance rather than relying on ad hoc explanations.
What related offences should firms be aware of?
Section 342 of the Proceeds of Crime Act 2002 creates a separate offence of prejudicing an investigation. Unlike tipping off, this does not require a report to have been made. If someone knows or suspects that an investigation is underway and takes steps that could interfere with it, the offence may apply.
This reinforces the need for caution at an early stage. The risk does not begin only once a report is submitted, but from the point at which suspicion arises.
How should firms manage tipping off risk in practice?
Managing tipping off risk requires preparation rather than improvisation. All staff involved in client work should understand what tipping off is and why careful communication matters.
The Money Laundering Reporting Officer should be involved as soon as a report is being considered, so that communication with the client can be managed consistently. Firms should also develop agreed language for responding to delays or questions, ensuring that fee-earners are not required to decide how to respond in real time.
It is also important to recognise that internal reporting to the MLRO is not tipping off. It is a separate legal obligation and a critical part of the firm’s AML framework.
Tipping off is best understood as a risk that arises from how information is communicated, rather than from the act of reporting itself. Once suspicion exists, even well-intentioned explanations can create exposure if they suggest what is happening behind the scenes. The legal threshold is broad, and the consequences are significant.
Firms that manage this effectively do so by putting clear processes, training, and agreed client communication in place so that responses are measured, consistent, and do not depend on judgement in the moment.
