Fraud crackdown sparks privacy fears

New legislation expected to be announced in the Queen’s speech next Wednesday could force accountants and tax officials to disclose confidential information about clients.

The English ICA has voiced serious concerns over a radical government anti-money laundering initiative that will strengthen powers of law enforcers to confiscate funds or properties gained by criminal activity through a new National Confiscation Agency. Under the proposals, police, the National Criminal Intelligence Service and Customs & Excise will be able to request confidential information from accountants and the Revenue.

Some of the institute’s concerns centre around proposals to relax client confidentiality, allowing the police to demand more information. It also cites the extension of statutory requirements to report suspected crimes and competition issues were also cited as potential stumbling blocks.

‘We have much anecdotal evidence to the effect that currently in many cases no action is taken by NCIS following the reporting of suspicions.

It is not appropriate to impose additional requirements on the public if those reports already being given are not acted upon appropriately,’ said a recent institute response to a government consultation.

It also argued that statutory requests to report suspicious transactions should be extended to all professions working in the financial sector and not just accountants.

‘This would be a wholly unacceptable distortion of competition between members of the different professions,’ said the response.

Felicity Banks, secretary of the institute’s Business Law Committee, told Accountancy Age this week: ‘It will be a burden on business. If all crimes were reported, it would swamp the NCIS and make it difficult for them to investigate.’

It is expected the new rules will only cover offences that generate substantial amounts of money. The Revenue this week moved to allay fears over the rules, which will give it a new power to disclose information for the purpose of criminal investigations.

‘We will have the power but not the obligation to disclose information will negotiate sensible arrangements with police,’ it said.

It is only currently obliged to disclose information to police for the purpose of investigating murder or treason; or if the police have a court order.

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