UK Lawyers Disappointed By European Parliament's Move On Money Laundering Directive

by Ulrika Lomas, for LawAndTax-News.com, Brussels

09 May 2005

Lawyers in the United Kingdom have expressed disappointment at a move by MEPs to make criminal penalties for 'tipping off' offences mandatory for all EU member states.

Amendments to the third money laundering directive put forward by bodies representing lawyers across Europe would have meant that charges for lawyers who tip off clients that they will be reported to the authorities would be optional. This would have allowed the UK to retain its exemption for lawyers in certain cases covered by legal professional privilege.

However, as a result of time pressures, the proposed changes were dropped from the legislation ahead of a meeting of the European Parliament's civil liberties committee earlier this month. Amendments seeking a review of the impact of the second money laundering directive and allowing mutual recognition of client identification checks were also dropped from the directive.

Speaking to the Law Society's Law Gazette news service regarding the decision to drop the protections, secretary-general of the Council of Bars and Law Societies of Europe, Jonathon Goldsmith announced that:

"We are very disappointed at the outcome. We put forward strong arguments for waiting for an impact assessment on the second directive before implementing a third. In the UK, reporting requirements have led to difficulties in knowing what to report."

He continued:

"We abhor the breach of confidence which the tipping-off provisions will entail and are not persuaded that the directive will actually deal with the issue of money laundering."

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