UK Supreme Court

The ruling, which narrows the UK’s jurisdiction over money laundering offences, will impact how cross-border money laundering offences are prosecuted going forward.

By Pamela Reddy, Clare Nida, and Annie Birch

The UK Supreme Court’s decision in El-Khouri1 has clarified the territorial limits of the Proceeds of Crime Act 2002 (POCA). The ruling confirmed that the primary money laundering offences under Sections 327 to 329 POCA do not have extra-territorial effect, narrowing the UK’s jurisdiction over money laundering offences and overturning the Court of Appeal’s decision in R v. Rogers.2

The El-Khouri Case

The case concerned an order for the extradition to the US of Joseph El-Khouri, who was accused of insider trading using confidential information about prospective mergers and acquisitions of companies listed on US stock exchanges. The US government contended that Mr El-Khouri’s significant cash payments and benefits, such as hotel stays in New York, in exchange for material non-public information, constituted a money laundering offence under Section 329 POCA for using, acquiring, or possessing criminal property. They argued that this, in turn, constituted an extradition offence under Section 137(4) of the Extradition Act 2003,3 due to POCA’s extra-territorial effect.

Limiting POCA’s Extra-Territorial Effect

The Supreme Court rejected this argument. It held that Sections 327–329 POCA only apply when the conduct which constitutes the primary money laundering offence occurs within the UK. These sections set out the primary money laundering offences and criminalise concealing, disguising, converting, or transferring criminal property (Section 327); becoming concerned in an arrangement which facilitates money laundering (Section 328); or acquiring, using, or possessing criminal property (Section 329).

In doing so, the Supreme Court rejected the Court of Appeal’s decision in Rogers, which had established that Sections 327–329 POCA have extra-territorial reach when a substantial portion of the underlying criminal conduct occurs in the UK. In Rogers, the appellant had laundered money in Spain with no act of money laundering in England, but the underlying fraud generating the criminal property took place in England and involved English victims. The Court of Appeal, in finding that POCA applied to the conduct, had asserted that “the offence of money laundering is par excellence an offence which is no respecter of national boundaries. It would be surprising indeed if Parliament had not intended [POCA] to have extraterritorial effect (as we have found it did)”.4 This decision has been widely criticised and prompted multinational corporations to consider their POCA risk in international transactions very carefully.

In its judgment, the Supreme Court addressed the argument relied on in Rogers that s.340(11)(d) extends POCA’s reach by referring to money laundering as an act that “would constitute an offence [under section 327, 328, or 329] […] if done in the United Kingdom”. The Supreme Court confirmed that s.340(11) is “merely a definition” of the term “money laundering” and does not create an offence or confer extra-territorial jurisdiction on the statute. Instead, it is intended to define money laundering in a way that facilitates the disclosure requirements under Sections 330–332 POCA.5 The Supreme Court criticised the reasoning in Rogers, stating that the “language [of POCA] is positively inconsistent with the notion that Parliament intended [Sections 327–329] to apply to acts done abroad”.6

The Supreme Court emphasised that if Parliament intended for a statute to have extra-territorial reach, the statute must explicitly state so. In the absence of such explicit wording within POCA, the presumption is that Parliament did not intend to criminalise acts committed entirely abroad. The Supreme Court stated that any suggestion to the contrary would be “a truly exorbitant extra-territorial jurisdiction for the United Kingdom to assert”.7

Potential Implications

By reaffirming the territorial limits of POCA, the Supreme Court has narrowed the UK’s ability to prosecute money laundering offences linked to conduct occurring beyond its borders. The decision reinforces the principle of territoriality, clarifying that POCA applies only to conduct within the UK unless Parliament explicitly states otherwise. Going forward, the Supreme Court’s decision may affect how multinational corporations and financial institutions evaluate legal risks in cross-border transactions.

This post was prepared with the assistance of Charlotte Ma in the London office of Latham & Watkins.

  1. El-Khouri v. Government of the United States of America [2025] UKSC 3 ↩︎
  2. R v. Rogers [2014] EWCA Crim 1680 ↩︎
  3. Section 137(4) of the Extradition Act 2003 sets out the conditions under which an offence committed outside a “category 2 territory” can still be extraditable. A “category 2 territory” refers to countries with which the UK has an extradition agreement, such as the US. The conditions are: (a) the conduct took place outside the category 2 territory; (b) the equivalent conduct, if it occurred in the UK, would be considered an extra-territorial offence punishable by at least 12 months’ imprisonment; and (c) the conduct is also punishable under the law of the category 2 territory. ↩︎
  4. Para 52, Rogers ↩︎
  5. Para 76-79, El-Khouri ↩︎
  6. Para 81, El-Khouri ↩︎
  7. Para 75, El-Khouri ↩︎