Money laundering threat to solicitors

By Sue AllenSolicitors could face increased bureaucracy and criminal sanctions as a result of the war being waged in the UK and Europe through...By Sue AllenSolicitors could face increased bureaucracy and criminal sanctions as a result of the war being waged in the UK and Europe through legislation aimed atstopping money laundering, the Law Societys council heard last week.According to the Societys moneylaundering and serious fraud task force, the extent of changes to legislation in the UK could leave more solicitors at risk of criminal prosecution.The Proceeds of Crime Bill, which was published earlier this month, would see solicitors and others, required to report clients if they suspect them of being involved in any criminal activity.At the moment, prosecutions forfailure to report crime may only be brought for offences of drug trafficking and terrorism.A task force paper presented to the Law Societys Council last week stated that a second EU directive on money laundering would require solicitors doing a greater variety of legal work to meet client identification requirements, and to record internal reporting procedures, staff training and internal control procedures.At the moment, the existing money laundering regulations only apply to firms involved in investment business.

The European proposals would bring more solicitors into the regulatedsector, including those involved in: buying and selling property orbusiness entities; managing client money, securities or other assets; opening or managing bank, savings or securities accounts; organising contributions to create, operate or manage companies; and thecreation, operation or management of trusts, companies or otherstructures.Breach of these regulations could see solicitors facing up to two years imprisonment and a fine.The Law Societys task force said that while it did not wantsolicitors to be perceived as unhelpful in the fight against global crime, access to justice and to independent legal advice were, however, key human rights which should be protected.

The Societys council voted to pursue a middle-ground in lobbying for changes which would see solicitors doing low-risk work excluded from reporting and record-keeping requirements.

Louise Delahunty, chairwoman of the Societys task force, said that although solicitors needed to be part of the fight against corruption and crime as they are now beingtargeted by money launderers, firms should not be subject to so much bureaucracy that they cannot get their job done.