PracticeConsultingAccountants’ vigilance to be tested

Accountants' vigilance to be tested

Accountants working in the regulated financial sector could be found criminally liable in cases of money laundering, even if they can prove they had no knowledge of any illicit activities.

Current legislation under the Money Laundering Act of 1993 allows for the prosecution of an employee, working in the finance sector, who fails to report evidence of money laundering only if it can be proved they were aware of illicit operations, and chose to do nothing.

However, under the draft Proceeds of Crime Bill, introduced by home secretary Jack Straw yesterday, an employee could be jailed for up to five years if a court can be prove they should have known another person was engaged in money laundering.

A spokesperson for the Home Office told AccountancyAge.com that the new proposal would apply to ‘accountants conducting relevant financial business’ within the regulated sector.

To prove culpability, according to the new guidelines, the Home Office has proposed the introduction of a ‘negligence test’ to determine whether the defendant had sufficient and relevant access to ‘guidance issued by a supervising authority’ on money laundering.

Other measures in the draft Bill include the right to seize property suspected to have be acquired through criminal activities, and the right to recover the criminal assets where no conviction has been possible, such as in the case of a suspect fleeing the country.

The Bill also called for the establishment of a Criminal Assets Recovery Agency in England, Scotland, Wales and Northern Ireland, with the responsibility of recovering criminal assets and the power to tax suspected criminal assets.

Announcing the Bill, the home secretary said there was considerable scope for a more concerted focus on investigating and recovering criminal assets and added:

‘The Proceeds of Crime Bill will bring together in one act, and in an updated and strengthened form, the law governing investigations, money laundering offences and confiscation.’

Respondents will have until the 29 May to respond to the proposals, after which it will be put before parliament and is likely to enter the statute books sometime next year

Links

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Proceeds of Crime Bill – Draft clauses

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