Money laundering and third-party payments under deed

Monday 21 May 2012

I do not, as a rule, make or receive third-party payments, and I make sure my firm does not act as a banker, yet clients may arrange for payments to third parties under a deed of variation of benefits. The beneficiaries may all agree to send the money to anyone. Is there any potential for money laundering, or tax evasion?
 
Where there is no suspicion that the funds to be paid are proceeds of crime, it is not a money-laundering offence as there is no existing criminal property. However, solicitors are duty-bound to uphold the rule of law and always need to be on their guard not to allow their services to be used in the commission of a crime.
 
Where it is clear that the purpose of the variation is to facilitate tax evasion, you need to advise the clients that this is a criminal offence with significant consequences.  If the clients insist on proceeding, you will need to advise them that you are unable to continue acting, in accordance with the Solicitors Regulation Authority Code of Conduct 2011, Principles 1, 2, and 6, and Outcome O(1.3).