Money Laundering – Institute steps up fraud fight

The English ICA is rewriting guidance for its members on spotting and reporting cases of money laundering.

It is understood the move reflects the institute’s desire to bring the current five-year-old guidance up to date and to highlight the importance it attaches to the issue.

Accountants have been stung by criticism that they are not doing enough to stop money laundering. The new guidance is not expected to make fundamental changes to the rules, which officials say are already ‘robust and rigorous’.

News of the review came as Ian Cherry, of the North West Society of Chartered Accountants, worried a great deal of cash in the region was being generated by drugs trafficking.

‘Drug dealers will try to wash it through legitimate businesses and they’re becoming more and more ingenious,’ he said. ‘It’s known that some people are deliberately paying too much in taxes so they can claim a rebate of clean money from the Inland Revenue.’

Felicity Banks, secretary of the institute’s money-laundering working party, said accountants should warn clients of the dangers of being caught up in money laundering.

‘The criminal offences of assisting a money launderer and of failing to report suspicions of money laundering apply to everyone, not just those who work in financial services,’ she said. ACCOUNTANTS TOLD TO INCREASE DISCLOSURES

Unveiling new 1998 figures on suspicious financial transactions, NCISl Criminal Intelligence Service that it is failing to report suspected money launderers, writes Chris Quick. slammed accountants for the low number of disclosures they made about suspected money launderers. In 1998, fewer than 1% of disclosures came from accountants.

NCIS said: ‘Despite a close working relationship between NCIS and their representative bodies, solicitors and accountants continue to cause concern.’

Simon Goddard, of the Strategic and Special Intelligence Branch, added: ‘The professional status and expertise of accountants makes them attractive to launderers. The involvement of accountants in more complex laundering cases is often desired by criminals for their advanced financial knowledge.’ Felicity Banks, secretary of the English ICA’s money laundering working party, believed there was little evidence of under-reporting by accountants.

She argued that while money laundering was a high-risk area for accountants, they were trained to recognise suspicious transactions, unlike other professionals.

She added that accountants generally did not control as many client accounts as solicitors did, and were thus less susceptible to money laundering.

As a result, she said, accountants were less likely to make reports, but when they did they were more accurate.

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