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Money laundering rules to be relaxed for solicitors
Thursday 07 April 2011 by Jonathan Rayner
Solicitors will no longer need to fear criminal conviction for minor due diligence errors such as keeping an out-of-date passport on file, the Law Society said last week, as the government announced plans to reduce the regulatory burden attached to anti-money laundering obligations.
Chancery Lane said the plans to decriminalise customer due diligence checks were a ‘victory for proportionality’.
In a document issued jointly by the Treasury and the Department for Business, Innovation and Skills, the government said it wanted to abolish more than 24 regulatory offences under money-laundering regulations, and also exempt businesses with low turnovers from some obligations.
It said it will ‘shortly’ consult on detailed proposals for changes to the regulations to ‘further strengthen the risk-based approach’.
The aim was to deliver ‘an effective and proportionate anti-money laundering regime’, while minimising the burden on business, the document said.
Law Society chief executive Desmond Hudson said: ‘While firms will still need to conduct due diligence and report suspicions of money laundering, they will no longer need to fear a criminal conviction if a passport they have on file goes out of date, or if they did not get the right number of utility bills or bank statements for every director of a company they are instructed by.
‘We believe it will help law firms take a more risk-based approach so that they allocate resources more effectively, rather than slavishly following a tick-box approach.’
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