Government to keep AML ‘consent’ defence

The Law Society has welcomed a government decision not to scrap a statutory defence available to solicitors who report suspected money laundering.

As the Gazette reported in April the ‘consent’ defence, available to solicitors who report suspicious activity, looked set to be removed as part of government plans to overhaul the UK’s anti-money laundering regime.

The proposal has now been withdrawn, a decision which Chancery Lane hailed as an example of how ‘working constructively with professional bodies can produce better legislation’.

In a consultation response to its ‘action plan for anti-money laundering and counter-terrorist finance’, the government said it ‘does not intend to remove the consent regime at this time, but will continue to explore what actions could be taken to prevent the misuse of the consent regime’.

Chancery Lane said the decision to retain the consent regime will be a relief to solicitors who were ‘potentially facing an unjustified removal of legal cover for meeting their obligations to report suspicious activity’.

Robert Bourns, president of the Society, said it remains committed to working alongside government to maintain the role of solicitors as a ‘key ally in the fight against money laundering’.

‘In our response to the government’s consultation we raised a number of concerns, and it is gratifying to see the government taking these concerns seriously, making positive changes to their proposals to account for them,’ he said.

The defence, available under the Proceeds of Crime Act, can see a ‘reporter’ avail themselves of a defence against committing a money laundering offence provided they seek the consent of the UK Financial Intelligence Unit to conduct a transaction or activity about which they have suspicions.

The Law Society also raised concerns over proposals for a new unexplained wealth order, which would force an individual to prove that assets had been lawfully obtained.

Chancery Lane said these breached the presumption of innocence and required proper judicial scrutiny.

The government has said it will now implement these plans using existing powers that have proper judicial oversight, ensuring the rights of individuals are protected.

Bourns added: ‘Although there is still work to be done to ensure solicitors’ frontline role in combating money laundering is properly recognised and supported, we thank the government for listening to the concerns we raised and making positive changes to respond to those concerns.’