Treasury refuses to back laundering advice

Link: CCAB launches anti-money laundering guidance

Experts warned this week that, without government backing, a court would be under no obligation to take the guidelines into account – creating a ‘theoretical possibility’ that an accountant who followed them could still face sanction for failure to report money laundering suspicions.

The news comes after months of anxiety among accountants over new regulations that compel them to report any suspicion of money laundering activity among clients to the National Criminal Intelligence Service.

The long-anticipated guidance on anti-money laundering requirements, issued on Monday by the Consultative Committee of Accountancy Bodies (CCAB), aims to help accountants avoid unwittingly committing reporting offences.

But the Treasury said that the document was ‘unlikely’ to receive its approval before 1 March, when new laws will mean that accountants who fail to report money laundering could be imprisoned for up to 14 years.

One financial crime expert said the lack of Treasury endorsement opened up ‘the theoretical possibility’ of prosecution – even if guidelines were used. The Treasury ‘stamp of approval’ was expected after it was mentioned in both the Proceeds of Crime Act 2002 and the money laundering regulations 2003 as a way of lending authority to the CCAB guidelines.

Approval from the Treasury would mean courts would have to take into account the use of guidelines by anyone accused of not following the regulations.

Chancellor Gordon Brown has repeatedly called for better coordination to tackle money laundering.

The Treasury denied that its failure to give approval would leave accountants facing jail or a fine, claiming the courts were likely to take industry guidance into account even without its backing.

Felicity Banks, secretary of the CCAB’s working party on money laundering, said the Treasury could still endorse the guidelines. A Treasury spokesman said: ‘We’re not in the business of approving all guidance regardless of its quality.’

The Treasury is worried it could face legal action if the courts disagree with guidelines it approves. The CCAB also urged members to seek their own legal advice.

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