Law Society Renews Money Laundering Directive Plea

by Robin Pilgrim, LawAndTax-News.com, London

02 February 2007

The UK's Law Society again suggested on Thursday that draft regulations implementing the third European money laundering directive into domestic law will harm competitiveness, particularly for City firms with international client bases.

The Law Society is urging the government to think again about key provisions of the draft regulations which will impose unnecessary burdens on solicitors.

According to the Society, of particular concern is the failure to transpose article 15 of the directive, which provides that UK firms may rely on international third parties who are subject to money laundering regulation for customer identification, even where the documents used by the third party are not exactly the same as those which would be required in the UK.

Law Society president, Fiona Woolf announced that:

"The Government is taking an unnecessarily heavy-handed approach and putting UK firms at a disadvantage by not allowing us to rely on customer checks carried out by regulated third parties as the directive sets out. This will result in unwarranted regulation and increased costs for solicitors and their clients. The government can easily resolve this problem by transposing article 15 into the implementing regulations."

Tim Cave, partner at Freshfields, added:

"We hold a real concern that the draft regulations will not enable us to 'passport' clients between our European offices where their document gathering requirements differ."

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