UK Law Society Releases Money Laundering Consultation Document

by Robin Pilgrim, LawAndTax-News.com, London

25 March 2003

A consultation document published by the UK Law Society and entitled 'Minimising The Risk Of Money Laundering' is likely to divide opinion amongst the legal community.

The new guidelines seek to prevent the use of solicitors' client accounts for money laundering, and a proposed draft rule annexed to the consultation paper prohibits, save in exceptional circumstances, the use of a solicitor's accounts where 'there is no underlying transaction or provision of solicitor-like services'.

The Regulation Review Working Party (RRWP), which formulated the document, acknowledges that in the eyes of many new rules on anti-money laundering procedures are not necessary, given that the responsibilities of solicitors with regard to money laundering are already enshrined in criminal law and the Money Laundering Regulations, and that there is a clear professional duty to act in an honest manner.

However, the RRWP balanced this by observing that:

'Solicitors are attractive to launderers because of the credibility provided by their involvement in the transmission of money and the anonymity afforded by client confidentiality...Solicitors are also vulnerable to launderers because they are gatekeepers to the integration process whereby the proceeds of crime are used to purchase property or businesses.'

'There is a danger that solicitors become involved in money laundering without realising it and are then vulnerable to criminal proceedings. The existence of a rule might serve to reinforce the law, including any obligations under the money laundering regulations, and make it easier for solicitors to refuse inappropriate instructions.'

Comment is invited from the legal community by July 1, 2003.

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