Sole Survivor: Clean up the Money Laundering Act

by Elaine Clark, cheapaccounting

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14 May 2012

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Sole Survivor

HAVING RECENTLY SURVIVED the stresses of a house move I am not sure whether I should laugh or cry about my experiences at the hands of so called money laundering legislation.

If I have to prove my identity just one more time I think I will scream!

I lost count of the number of times the passport and latest utility bill made an appearance; the IFA for finance, the loan provider, the lawyer to name but a few all needed to see the same documents.

My documents are almost worn out by the number of times that they have been viewed by those with little knowledge of what to actually look for to check validity and originality. I know myself that I would not be able to spot a fraudulent passport - let's face it the authorities have years of training to spot such fakes. What hope the ordinary business owner?

So just how useful is checking original documents as a valid proof of identity check?

Given that a member of staff at my local Santander branch told me that they could not validate the documents because they did not know me, it seems that even the largest of businesses struggle with what they actually have to check and what the checks mean.

Surely there must be an easier way to prove my identity once and for all and for a central database to hold such information. Now there is a scary thought!

The cost to UK businesses covered by this act must be phenomenal- yet again many businesses are unpaid administrators of a UK law that seems to result in very few prosecutions but with an unnecessary impact on the life of many.

It seems to me, whilst there may be some very good experts around on this subject, the actual day-to-day implementation of this legal requirement can border on the ridiculous.

Some have got themselves into a situation where the fear of breaching this often poorly understood legal requirement results in processes lacking in any semblance of common sense, legality and commerciality?

Inconsistently there are some who do not even adhere to the rules of money laundering at all with little consequence as there seems to be no clear governance of the implementation of this law.

Let me tell you about my (now ex) lawyer who could not accept that in this day and age a bank account can be operated entirely on line without paper statements.

Unfortunately this resulted in her implication that she thought I was laundering the funds to pay for my new property purchase. I guess that means that she must have made a suspicious activity report on me - even though she was later advised by her professional body that her actions were incorrect and she reversed her decision.

So what would happen if someone is incorrectly reported for a suspicion of money laundering?

What if reporting an innocent person damages their reputation and good standing?

It seems with money laundering you are guilty until proven innocent!
All of us accountants have to comply with Money Laundering regulations - do you think they are worth the paper that they are written on and the cost incurred by your firm to apply them? Is money laundering really helping fight against crime?

Elaine Clark is a chartered accountant and MD of accountancy practice She blogs for Accountancy Age on the issues facing smaller practices and their clients

Image credit: Shutterstock


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