Lawyers Want To Be Above Money-Laundering Laws

Ulrika Lomas, Tax-News.com, Brussels

03 April 2001

You can always rely on lawyers to try and excuse themselves from the consequences of the laws they pass. Last week it was the UK's Law Society's who said that the Government's new Proceeds of Crime Bill could put many of the country's solicitors at risk of criminal prosecution as well as forcing them to deal with an increasing amount of bureaucratic red tape.

The Proceeds of Crime Bill, published earlier this month, gives financial investigators, such as police and customs officers, new powers to require banks and other financial institutions to provide details of accounts held by a person under investigation. Banks could also be required to provide transaction information on specified accounts. The new bill is partly in response to the revelation that London banks were involved in providing a conduit for nearly a quarter of the $4bn that General Sani Abacha stole from Nigeria.

The Law Society said that it did not want solicitors to be considered as 'unhelpful in the fight against global crime,' and just wants solicitors to be released from their record-keeping requirements as well as the obligation to report money laundering when they have merely 'reasonable suspicion'. In other words, to be excluded from the operation of the new law!

This week it's the turn of the European Parliament (another lawyers' co-operative, like most legislatures) which is taking an axe to a new set of European Union money-laundering rules that that has taken the Commission and the member states two years to put together.

EU governments are trying to close loopholes in the law that allow widespread money-laundering, estimated worldwide to be between $600bn and $1,500bn each year. But parliament wants to reduce the burden on lawyers, accountants and tax consultants to report suspicious behaviour by their clients.

Sweden, which holds the EU's rotating presidency, is worried that the amendments introduced by parliament could mean the directive is dropped and has to be drawn up again. They would also remove auditors, accountants and tax advisers from the same strict regime as applied to banks and credit institutions.

Under the current proposals, lawyers have no obligation to report their suspicions of money-laundering if they are defending their clients in court. In all other cases, such as giving financial advice to clients, the lawyer would have to report suspicious behaviour. However, parliament wants to extend the exception to lawyers who are "giving legal advice". What else do lawyers do? Ottaviano del Turco, an Italian minister who was formerly part of an anti-mafia organisation, told other EU ministers last July that he had never come across a case of money-laundering that did not involve lawyers.

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