The government has decided not to relax the UK’s anti-money laundering reporting regime despite calls from a House of Lords committee to do so.

In its July inquiry into money laundering and the financing of terrorism, the home affairs subcommittee of the House of Lords select committee on the EU said the law should be amended so that failure to report a suspicious transaction that is based on a minor criminal offence should not be prosecuted.

However, the government said in its response that it ‘prefers the all-crimes approach’. It said that an apparently trivial report ‘may in fact be the tip of a much bigger criminal enterprise’ and that if the House of Lords’ proposal was made law, then ‘valuable intelligence opportunities’ might be missed.

When giving evidence to the House of Lords committee earlier this year, the Law Society argued that the reporting regime placed a heavy burden on solicitors and called for it to be relaxed.

Alison Matthews, chair of the Law Society’s money laundering taskforce, said she remained concerned that the difficulties encountered by the profession need to be fully addressed, but welcomed the government’s commitment to engage with the Law Society on this issue.

The government said that individuals who submit a suspicious activity report (SAR) to the Serious Organised Crime Agency (SOCA) for the first time will be given one-to-one guidance on how to do so. SOCA will then examine their SAR and provide feedback. The government also said that SOCA will endeavour to provide feedback on SARs where they contribute to the success of an operation.

Meanwhile, the Treasury has approved the Law Society’s updated anti-money laundering practice note. The Solicitors Regulation Authority and the courts must refer to this practice note when assessing a solicitor’s conduct in response to money laundering allegations. See www.lawsociety.org.uk.