Home Office sees sense on laundering regulations

Link: Money laundering failure revealed

The government department has launched an informal consultation into whether the law on obligations of accountants to report money laundering should be changed to bring it into line with European law.

The proposals would see accountants afforded the same exemptions as lawyers where information is received in privileged circumstances.

‘This informal consultation is aimed at a relatively narrow, but very important, aspect of UK anti-money laundering law,’ said Karen Silcock, chairman of the ICAEW’s money laundering working party. ‘The changes proposed … have the potential to increase clarity and remove inequality, which will be good for clients and their advisers.’

A professional legal adviser is not obliged to disclose information to the National Criminal Intelligence Service that they receive from a client ‘where there is no issue of furtherance of criminal purpose’.

But accountants and tax advisers must report in these circumstances, and could face up to 15 years in jail for failure to do so.

If passed, the legislation would enable clients to obtain confidential advice from accountants and tax advisers when they are in a potential money-laundering situation, without the fear of being reported.

But the consultation does not address the issue that has most enraged accountants, namely that there is no minimum monetary level under which reports do not have to be made, encouraging some accountants to report all of their clients in a bid to avoid legal problems. There has been no indication that the government is willing to relent on this stance.

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