UK Law Society Raises Concerns Over New Anti-Money Laundering Bill

Mandy Robinson, Tax-news.com, London

29 March 2001

According to the UK Law Society's money laundering and serious fraud task force, the 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. At present it is already an offence for solicitors and other professionals to fail to report evidence of laundering of drug money or terrorist funds, but the new rules will require a prosecution to prove only that they had reasonable grounds for suspecting a person was engaged in money laundering. Failure to do so could result in a two year prison sentence and a hefty fine.

A paper released by the Law Society's task force claims that this would involve solicitors a variety of new types of work to meet client identification requirements, for internal reporting procedures, staff training and internal control procedures. Additional work would be caused across a wide range of types of legal activity including the buying and selling of property or business entities, managing client money, securities or other assets, opening or managing bank, savings or securities accounts, and the formation, operation and management of companies, trusts or other structures.

The task force said that it did not want solicitors to be considered as 'unhelpful in the fight against global crime,' and it intends to pursue campaigning for a 'middle-ground' in which solicitors would be released from their record-keeping requirements as well as the obligation to report money laundering when they have merely 'reasonable suspicion'.

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