COMPLIANCE: many firms claim regulations will raise running costs and damage UK plc


Some 50% of law firms believe new anti-money laundering regulations will raise running costs and harm the competitiveness of UK plc, research has revealed.



Risk and compliance officers from 50 firms were surveyed by legal publisher Lexis Nexis about their attitudes to the regulations. Of the 50% of respondents who said compliance would cost more, half expected costs to rise by between 10% and 29%.



The Treasury's Money Laundering Regulations 2007, the definitive version of which was published last week, propose expanding customer due diligence requirements and changing how beneficial owners are identified and politically exposed persons determined. The regulations come into force on 15 December 2007.



Despite costs concerns, 68% of firms confirmed they are already investing in training and 48% are allocating personnel to perform due diligence checks.



Mark Dunn, head of risk and compliance at Lexis Nexis, pointed out that half said the new rules would reduce the risk of exposure to money laundering.



'Law firms are sceptical about the Money Laundering Regulations but are pragmatic enough to know that early action to comply is preferable to the high costs of financial crime... the regulations are trying to combat a very real and pressing issue for the UK - money laundering and in particular its use to finance terrorism,' he said.



Frank Maher, partner at specialist law firm Legal Risk, said the regulations will help keep claims at bay: 'In years to come, we will look back and wonder how we managed without all these checks.'



The government rewrote the regulations after legal and finance professionals, led by the Law Society, condemned them as so vaguely worded, they were effectively unworkable and potentially unlawful.



Law Society President Andrew Holroyd said: 'The Law Society lobbied very extensively on these regulations and we are pleased the Treasury has listened to us.' He added that the Society will issue a practice note in early September to clarify how the regulations will affect members.



Anita Rice