Jail threat over laundering rules

Link: Anti-money laundering rules hit pensioners

The stark warning follows the recent sentence of six months’ imprisonment passed down on a solicitor who failed to report a suspicion of money laundering, even though the judge accepted that he misunderstood the law, rather than intended to flout it.

RSM Robson Rhodes forensic investigations partner Bill Cleghorn said he had ‘no doubt that before long we are likely to see an accountant ending up in jail’ as a result of the Proceeds of Crime Act 2002 and the implementation of the second European Union money laundering directive.

The situation is confused because professionals are still waiting for the government to finalise all the requirements, some of which have been published while others are still in draft form and out for consultation.

The Act, which is expected to come into force next year, extends the scope of reporting money laundering to all crimes and introduces tough new requirements. The EU directive extends reporting and other responsibilities for practitioners and their staff and comes into force by the summer of 2003.

Professional firms will have to appoint a ‘nominated officer’ – who should be a senior member of staff – who will ensure that firms have adequate systems in place to deal with any suspected cases of money laundering and decide whether to report to the authorities.

Deborah Chaplin, head of the ICAEW audit faculty, said: ‘The institute has been talking to government to ensure that the legislation is as realistic as possible. We realise money laundering is a serious issue but we are worried that the onerous provisions of this legislation means that accountants will have no choice between breaking the law and risking imprisonment or reporting huge numbers of trivial matters.’

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