Play fair on laundering pleads NCIS
Professionals have been accused of making false reports to the National Criminal Intelligence Service, just three months after the launch of the new money-laundering regime.
Link: NCIS convinced it can cope with flood of reports
NCIS has admitted for the first time that fears of spurious reporting to evade prosecution – defensive reporting – had become a reality.
The news will provide ammunition to critics of the new reporting regime, who argue that accountants are under undue pressure to ‘shop’ clients because they face jail sentences for failure to report.
David Winch, an expert on the new regime, said: ‘It is not at all surprising.
There are significant penalties for failing to report when required, so the motto is (to a certain extent) “if in doubt – report!”.’
In March, NCIS called on firms to act professionally, after it emerged during training sessions on the new reporting obligations that some accountants were planning a ‘shop-the-lot’ approach. NCIS warned that, far from offering effective protection, defensive reporting could backfire.
‘Reporting everyone is the same from our point of view as reporting no-one. Reporting when not suspicious is like not reporting at all,’ said a spokesman.
Felicity Banks, head of business law at the ICAEW, joined NCIS in attacking defensive reporting, saying: ‘It is not appropriate to report all cash clients – indeed there are dangers in doing so of breaching client confidentiality without a statutory override.’
But NCIS said most people were responding responsibly and insisted that the ‘flood’ of reports predicted by pundits had not materialised.
‘We are certainly not seeing a deluge. We are seeing some people reporting defensively where they are not suspicious,’ said a spokesman.
Meanwhile, it is understood attempts to update the present ‘interim’ guidance on reporting for accountants have stalled over disagreement between the Consultative Committee of Accountancy Bodies (CCAB) and government.
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Winch said: ‘It is too early to tell how the legal regime will bed down. Guidance from professional bodies is not finalised and we have not seen the effects of the legislation during the self-assessment tax return season.’
