Cannabis has been legalised for both medical and recreational use in a number of countries over the past decade and more countries are expected to follow suit; this trend has fuelled tremendous growth in this market, with global revenue projected to reach US$47.2 billion in 2023 and increase by 12.7% per annum thereafter. As a result, the industry has benefited from massive investment as more and more individuals and organisations seek to profit from this growth. The fact that cannabis remains illegal across most of the world, however, has given rise to questions over whether the proceeds generated in a jurisdiction where cannabis is legal are classed as the proceeds of crime in jurisdictions where it is illegal. We find that this is ultimately a legal quagmire which requires further clarification from the government.
Cannabis is a Class B drug in the UK; this means that possession is punishable by up to 5 years in prison while production and supply are punishable by up to 14 years in prison. While there is no question over the legality of cannabis proceeds generated in the UK in light of this, the matter is far less clear when the proceeds are generated in a jurisdiction where cannabis is legal. The first point of reference for the latter is the Proceeds of Crime Act 2002 (POCA), which is a key piece of anti-money laundering legislation in the UK. According to the POCA, an individual commits a crime if they:
The reference to ‘criminal property’ means that cannabis proceeds generated in a jurisdiction where cannabis is legal will fall under the POCA due to cannabis’ status in the UK; this has reportedly been confirmed by the UK’s Financial Conduct Authority. However, the fact that the POCA did not contain an overseas exception meant that it was recognised as being too broad in scope. As a result, it was amended by the Serious Organised Crime and Police Act 2005 (SOCPA) which stated that an offence would not be committed provided that:
This is broadly referred to as the ‘Spanish Bullfighter’ exception as it means that a bullfighter working in Spain would not be committing an offence under the POCA if they brought their earnings to the UK as bullfighting is legal in most parts of Spain. While at first glance one may assume that this would apply to those dealing with cannabis proceeds generated legally, Article 2(2) of the Proceeds of Crime Act 2002 (Money Laundering: Exceptions to Overseas Conduct Defence) Order 2006 states that conduct which would constitute an offence punishable by over 12 months’ imprisonment does not fall under the exception. The fact that cannabis offences typically exceed 12 months means that there is continued uncertainty over the legality of foreign cannabis proceeds in the UK. It therefore comes as no surprise that both the Law Commission of England Wales and the UK All Party Parliamentary Group for Cannabidoil have called for the Proceeds of Crime Act 2002 to be reformed.
While there is yet to be a conviction for money laundering where an individual or organisation has brought cannabis proceeds generated legally in another country into the UK, it is clearly vital for businesses to take the necessary steps to limit their risk exposure, given this continued legal uncertainty.
Themis Search can be used to screen clients, suppliers and third parties for a range of financial crime offences, including drug dealing and money laundering. This is highlighted by a search for Barrington Walters, for example; he was convicted, alongside his co-defendants Mandy Silowka and Kiara Lanee Malone, for importing over £1.7m worth of cannabis into the UK in January 2023, as illustrated in the Themis Search risk map above. Significantly, Themis Search also provides you with access to our Special Interest List, which is our proprietary database of financial crime related conviction data; this data allows you to see the links between drug dealing and other financial crimes, such as modern slavery and human trafficking. If you are conscious of limiting your exposure to the growing threats of financial and reputational risk, please book a demo of Themis Search and our Special Interest List here.
Stay on top of the ever-changing financial crime landscape by accessing the latest information on emerging criminal techniques and the risks associated with carrying out business with particular industries or in particular jurisdictions.
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We’ve handpicked a selection of standout books our team discovered over the summer—perfect picks to kick off the “back-to-school" season. These compelling reads offer deep insight into financial crimes, the systemic vulnerabilities they exploit, and their far-reaching consequences.
AI is fast becoming a high-ROI tool in financial crime and compliance. From cutting costs and boosting efficiency to enhancing resilience, strategic AI investments are helping CFOs do more with less - transforming risk management and unlocking new value across the financial sector.
The UK’s latest National Risk Assessment (NRA) reveals how money laundering and terrorist financing are evolving—and how the UK is fighting back. A vital guide for AML policy, it arms businesses with intelligence to spot risks and stay protected.
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Many clients have heard of the OFAC 50 Percent Rule but aren’t sure how it affects them. It’s far-reaching, with hidden sanctions risks. This post explains the rule, why it demands deeper due diligence, and steps to identify and mitigate those risks.
In June, the EU removed the UAE from its list of high-risk jurisdictions from an AML perspective, signaling growing international confidence in the country’s financial crime oversight.
New updates to the Land Conversion and Financial Crime Risk Assessment link environmental harm to financial crime. Cattle rustling in Nigeria and Cameroon is now red-rated, with added risks on carbon credit fraud, child labour, mining corruption, and gold smuggling.
An overview of modern slavery, distinguishing between human trafficking, smuggling, and forced labor. It highlights the global prevalence of exploitation and the importance of understanding these definitions to combat such crimes.
Dubai’s $160B foreign-owned real estate market faces money laundering risks. The UAE now requires reporting of property deals over AED 55K via REAR. Criminals like Daniel Kinahan have exploited property to hide illicit funds, underscoring the need for strict compliance.
Examines how digital platforms and cryptocurrencies facilitate human trafficking, allowing traffickers to operate anonymously and at scale, posing challenges for law enforcement.
Investigates how sanctions intersect with trade-based financial crimes in Hong Kong, highlighting the complexities businesses face in navigating regulatory compliance.
Financial crimes cause more than economic harm—they hit mental health too. UK data shows 60% of fraud victims face distress; Ghana research links corruption to anxiety and depression. This blog calls for tackling both psychological and financial impacts.
Environmental crime worsens gender inequality, driving violence, trafficking, and hardship for women—especially in regions like the DRC and Peru. Women defenders face abuse, and climate change deepens risks like water scarcity, child marriage, and health threats. Tackling these crimes is key to protecting women’s rights and safety.
AI is transforming financial crime prevention—improving detection, reducing costs, and streamlining compliance. Generative AI and graph networks boost due diligence, while ethical, human-guided use counters criminal misuse. Themis champions tech-human collaboration.
Explores the application of fuzzy logic in Anti-Money Laundering (AML) systems, emphasising its role in improving name-matching accuracy and reducing false positives, thereby enhancing compliance efficiency.
This book focusses on the challenges faced by law enforcement in North West USA and in British Columbia to combat illegal logging, as well as those of the timber-industry communities established since the late 19th century to maintain meaningful and financially viable lives.
The FATF has highlighted the UAE’s progress in fighting financial crime. Its third enhanced follow-up report upgraded three recommendation ratings for the country, marking a step forward in meeting international standards.
Lebanon’s economic collapse, fuelled by debt, corruption, and instability, has led to hyperinflation and greater financial crime risk. In Oct 2024, the FATF grey-listed Lebanon. The country pledges a two-year reform plan to boost transparency and restore investor confidence.
The UK treats profits from legal overseas cannabis businesses as criminal property under the Proceeds of Crime Act. Few cases qualify for exceptions, creating a legal grey area—so anyone handling such funds should proceed cautiously and seek legal advice.
The UK’s 2023–2026 Economic Crime Plan commits £400M to tackle money laundering, kleptocracy, and fraud, with reforms to Companies House, crypto, and sanctions. Progress is clear, but critics urge more urgency and funding. Success depends on public-private collaboration.
Suspicious Activity Reports (SARs) are key to fighting financial crime, with 42% of fraud found via tip-offs. Rising UK SARs and account freezes show their impact. Themis urges strong reporting systems and whistleblower protections to foster transparency.
Corrupt elites still exploit the UK property market via offshore structures and relatives to hide assets. Over 18,000 firms remain non-compliant. With cases of children holding luxury homes, Themis calls for tougher enforcement as new UK and FATF guidance target transparency gaps.
Corruption undermines sustainable development, financial integrity, and DEI. A Themis–Denominator study links lower corruption to higher DEI scores. Marginalised groups, especially women, suffer most. Promoting diversity and transparency is key to fairer societies.
Hindenburg Research accuses India’s Adani Group of fraud, alleging stock manipulation, shell firms, and nepotism—halving Gautam Adani’s net worth and shaking investor confidence. The case highlights how financial crime can roil markets and the need for strong due diligence.
Supply chain failures have linked firms like Inditex and Skechers to forced labour and reputational risk. The EU’s CSDDD will require large companies to address human rights and environmental harms. Themis offers tools to assess suppliers and fight modern slavery.
On World Wildlife Day and CITES’ 50th year, Themis reflects on tackling illegal wildlife trade—the 4th largest financial crime. Laws, AI, forensics, and global cooperation drive change, but shifting demand, like ivory to hippo teeth, shows challenges remain.
Puppy smuggling in the UK has surged post-pandemic, with organised crime exploiting demand and loopholes to import sick or underage dogs. Despite new laws, enforcement gaps remain. Themis urges buyer vigilance—tools like Themis Search can help spot breeder risks
Romance scams rose 30% in 2022, with victims losing £8,234 on average—especially men and those aged 65–74. Scammers use fake profiles and emotional manipulation. Themis urges due diligence in dating; tools like Themis Search can flag risks and help platforms protect users.
Crypto plays roles in both social good and crime—over $50M has aided Ukraine, but bad actors use it to evade sanctions and launder funds, notably via the UAE and Central African Republic. Themis calls for stronger due diligence and compliance to curb misuse.
The Russian invasion of Ukraine has heightened trafficking risks for women and children. Over 2.5M flee, with traffickers exploiting chaos, especially in Moldova, Poland, and Italy. The OSCE urges swift action to warn refugees of false offers and protect them.
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