Europe's lawyers are losing out on business as clients are increasingly instructing non-legally-qualified advisers to avoid the European Commission's harsh money laundering regime, it was claimed last week.

Claudio Cocuzza, an Italian commercial lawyer with Milan-based law firm Antonelli Cocuzza & Associati, issued that stark warning to delegates at the Brussels ABA conference. Other EU lawyers backed his view, with Law Society President Kevin Martin also attacking the EU money laundering directives and the Proceeds of Crime Act (POCA) in the UK, which goes further than required by the directives.


'There is a real problem in terms of the effect this legislation is having on international legal business in the UK,' said Mr Martin. 'International clients looking to place their business are looking at the Draconian rules in the UK, and those rules may influence their decision.'


He described POCA has having 'had a huge impact on legal advisers, some of which I don't think was intended by Parliament'. Mr Martin said there were anecdotal instances of confidential money laundering reports being disclosed in open court proceedings by the authorities.


He added: 'We [the Law Society] remain concerned about the cost of compliance to the legal profession, particularly the impact on small law firms. We are being asked to be the government's agents, yet we have little or no idea of what the results are in terms of catching and convicting criminals at the end of the line.'


Bernard Vatier, Paris-based president of the Council of Bars and Law Societies of Europe, also attacked the Third Money Laundering Directive, which was formally adopted by the commission last week. He said even former Communist eastern bloc countries were never under such strict obligations to the state &150; 'not even when they had to answer to the Stasi' &150; as they are in relation to anti-money laundering to the EU.