Accountants Criticise Proceeds Of Crime Bill

by Caroline Maxwell, Tax-news.com, London

07 June 2001

The Institute of Chartered Accountants in England and Wales (ICAEW) has criticised the government over proposals contained in the draft Proceeds of Crime Bill, it was revealed recently. The Institute claims that the bill is unrealistically burdensome, and will place UK accountants at a disadvantage if not significantly amended.

At present, an accountant in the United Kingdom can face criminal prosecution if they fail to report any suspicious transactions related to drug trafficking or terrorism. However, the bill would make failure to report suspicion of any type of money laundering similarly punishable.

Felicity Banks, chair of the ICAEW working party on money laundering, feels that this would create a logistical nightmare, both for accountants required to submit extra reports on their clients, and for the National Criminal Intelligence service which would have to process a greatly increased volume of paperwork. 'The lack of de minimis provisions in the proposed money laundering reforms, together with the extension of the rules to the proceeds of all criminal conduct, will lead to a requirement for trivial reports to be made to NCIS and introduce quite unnecessary burdens,' she explains.

Ms Banks also points out that in the current proposals, there are few provisions for the compensation of innocent parties, or for minimising the inconvenience to businesses inadvertantly caught up in crime, for example because a criminal has invested in them.

The ICAEW has said that several additional provisions need to be included in the bill, and have asked the government to lay down exactly which types of criminal activity they should be looking for in addition to drug trafficking and terrorism. They have also asked that accountants be exempted from filing a report if their client has already done so, or if they have already made a report to the Financial Services Authority or the Inland Revenue.

The Institute is also concerned that the Proceeds of Crime bill could put UK accountants at a competitive disadvantage by 'gold-plating' the European Union's forthcoming Money Laundering Directive, which Ms Banks believes is likely to be less stringent than the proposals set out by the government.

Recommended