The professions should ‘own’ anti-money laundering guidance as they best understand the fight against organised crime, the Law Society said today.
Responding to HM Treasury’s call for information on the action plan for anti-money laundering, Chancery Lane said it ‘firmly believes’ the responsibility for drafting AML guidance should remain with professional bodies.
These organisations, the Society said, have ‘unique sector-specific knowledge and expertise’ regarding the nature of their professions, and the risks and vulnerabilities of the transactions they are involved in.
‘It would be difficult, if not impossible, for a government body or stand-alone supervisor to match the depth of this institutional understanding,’ added the response.
The Society said it is important to maintain the principle of providing legal safe harbour to businesses that follow its advice, and urged the Treasury to retain its position of approving profession-drafted rules guidance.
Furthermore, it insisted there is no evidence to suggest a separation of representative and supervisory roles is required.
‘The determination by some to shift the perception of the role played by the professions in the AML regime from that of “gatekeepers” to “professional enablers” is regrettable,’ it added.
‘Despite facing arguably the strictest AML regime in the world and facing criminal penalties for completely unwitting involvement in money laundering, the assistance and intelligence which our members provide are rarely acknowledged.’
The National Risk Assessment, published last October, highlighted weaknesses in the UK’s regime for combating AML and the financing of terrorism. Introducing its consultation, which closed last week, the Treasury said one of the weaknesses identified was inconsistency in supervision.
In its own response, the Solicitors Regulation Authority reiterated its call for full separation from Chancery Lane, arguing that this is necessary to maintain public confidence.
In a separate response to proposals from the Treasury and Home Office to remove the protection from prosecution offered by consent, the Society issues a stark warning.
‘The defence afforded to those given consent was designed to counteract the far-reaching impact of the legislation,’ it says. ‘The “all crimes approach” and the low threshold of “suspicion” - unique among AML regimes in the world - necessitates protection for reporters. The protection offered by the consent regime works to offer balance and to avoid over-criminalisation.’
The response adds: ‘If the consent regime and the protection afforded are removed without fundamental reform of the primary money-laundering offences themselves, it would criminalise vast swathes of ordinary business activity.’