Former Tory cabinet minister Lord Peyton of Yeovil called the rules ‘just another one of those vexatious intrusions…which would not cause a money launderer to do more than twitch’.
Peyton demanded that government departments instigate investigations by accountants, bankers and stockbrokers into their own businesses in an effort to discourage money laundering.
Government spokesman, Lord Bassam of Brighton, defended the legislation, saying only 0.35% of reports of suspected money laundering came from accountants and 1% from lawyers. But he added: ‘These professions could be more helpful to the police in their inquiries.’
Peyton also protested about the burden being placed on private sector organisations to investigate their own customers: ‘There is something reprehensible about twisting the arms of private sector organisations into grilling their customers for information, some of which they have already and other aspects which are none of their business.’
He added ‘It shows that the government’s obsession with money laundering is going over the top.’
But Bassam claimed the government was getting ‘tremendous levels of co-operation from the private sector’.
He said the law imposed duties on financial institutions including customer identification and staff training and revealed there were over 31,000 reports of suspected money laundering last year.
He said it was in society’s interests to tackle the problem because it was associated with drug and people trafficking and terrorism.
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