Peers are expected to take up the issue after the government voted down Tory and Liberal Democrat attempts to safeguard ‘innocent’ professionals whose ‘inadvertence’ could leave them facing prison sentences of up to five years under the Proceeds of Crime Bill – by 306 votes to 172.
The decision followed the warning from left-leaning Glasgow Labour MP Ian Davidson that if negligent failure to disclose was subject to a fine alone, ‘I can envisage lawyers, accountants and others regarding a small fine of £5,000 as simply a business expense…No doubt accountants would write it off against tax.’
Davidson argued there was no need to establish a guilty mind to prove an offence, adding: ‘I have a pretty good idea of what is in the minds of accountants, lawyers, bankers and others who handle these ill-gotten gains. It is money, money, money. They do it for the money.’
The Bill, which has passed all its Commons stages, is now due to be considered in the Lords.
It has cross party support overall for cracking down on money laundering and giving courts draconian powers to seize the assets of crime barons.
Tory spokesman Dominic Grieve said those who knew money laundering was taking place should face jail but ‘those who may have been merely inadvertently negligent’ should only risk being fined.
Liberal Democrat spokesman Norman Baker said: ‘There is a difference between being negligent and wilfully intending to commit an offence.’
But Home Office minister Bob Ainsworth defended the bill as ‘fully justified against a background of several money laundering cases that have taken place in the City which were not reported to law enforcement.’
He insisted: ‘It is in the interests of the City and its financial reputation that we demand the highest standards of diligence.’
He later protested: ‘There is continuing evidence of slackness in the reporting of suspect transactions.’
Ainsworth said judges would take negligence into account in mitigation of sentence, but added that incompetence and ignorance should not be a defence for firms’ staff who had not been properly trained, since failure to give proper training was an offence in itself.
The minister said he would also consider a demand from the Northern Ireland Committee for accountants and other staff of the proposed Assets Recovery Agency to be given statutory anonymity to protect them from criminal and terrorist thugs.
There have been repeated demands during the passage of the Bill for the government to ensure there are enough professional staff for the proposed ARA to do its job.