External accountants and auditors will be forced to demand proof of identification from clients if European Union ministers back a move to bring them within the scope of the UK’s money laundering regulations.
The European Commission has proposed an extension to the 1991 EU money laundering directive to expand its scope beyond the banking and financial sector to include external accountants and auditors.
If ministers accept the change, accountants – other than those working in-house – would have to demand formal identification of clients when dealing with transactions exceeding Euro 15,000 (£9,871).
They would also have to keep detailed records of such transactions that could be used by law enforcement authorities to compile an audit trail.
Accountants already have a legal duty to report suspicions of money laundering, but the crime of not reporting is limited to drugs and terrorism. This might now be extended to all organised crime.
‘The proposal would therefore require … accountants and auditors to be fully involved in the fight against organised crime,’ according to a Commission report.
‘These professions would be given protection against any liability under civil or criminal law arising from the reporting of money from a suspicious source.’
But with members of the European Parliament currently vetting the new commissioners – all 20, including prospective vice-president Neil Kinnock, resigned amid allegations of fraud and mismanagement in January – the new rules are unlikely to be approved before the end of the year.
The move follows the signing of anti-organised crime charter by European accountants body FEE and comes amid revelations that two Bank of New York executives are being investigated over accusations that they diverted $10bn (£6.3bn) in International Monetary Fund loans to Russia.
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