UK Law Society Seeks Clarification On Money Laundering Rules

by Caroline Maxwell, Tax-News.com, London

02 November 2001

The UK Law Society has announced that it will be seeking clarification from the government over new-anti-money laundering provisions affecting the legal profession.

Under the Proceeds of Crime Bill, which has just received its second reading in the House of Commons, solicitors and other legal practitioners could face jail sentences of up to five years if they are 'negligent', and fail to spot an illegal transaction undertaken by a client. At present, lawyers only face a custodial sentence if they strongly suspect that a client is laundering money from drug-related or terrorist sources, but fail to act.

The Law Society says that when the bill reaches the committee stage, it will be seeking further clarification and definition of what constitutes 'negligence' and 'reasonable suspicion', as it is concerned that making the failure to report all irregularities, however trivial, will lead to increased, burdensome, and ultimately useless reporting.

However, speaking at the society's annual conference last weekend, President David McIntosh stressed that the legal profession in the UK was behind the international intitiative on money laundering and terrorism. 'We must do everything we can to help in the drive to stop the flow of money to terrorrist organisations,' he told the assembled lawyers. To this end, he announced, the Law Society has set up a designated helpline for solicitors, increased cooperation with other agencies, and published details of blacklisted organisations and individuals in the States.

'It is part of the Law Society's job to identify the waves of change which confront all solicitors. And then to help us surf those waves rather than drown in them,' he observed.

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