The regulations obliging accountancy firms to report suspicions of money
laundering have been reformed after criticisms that they were too onerous and
unworkable.
Changes introduced with the Serious Organised Crime and Police Act 2005 mean
that stringent rules introduced last year have been lifted. Accountants will no
longer have to report a financial crime as a matter of course even without any
information about the culprit or the whereabouts of any property or cash.
The Act, which supersedes parts of the Proceeds of Crime Act 2002,
acknowledges that such reporting is of little use to law enforcement agencies
and adds to the financial and regulatory burden on business.
The ICAEW, which has campaigned for the changes, said businesses had been
given some practical relief.
‘This is an important step as previously this requirement imposed reporting
costs on businesses,’ said Felicity Banks, head of business law. ‘While an
effective money laundering regime is fundamental to maintaining confidence in UK
business, the approach should not be over prescriptive,’ she added.