Impending anti-money laundering regulations could put solicitors at risk of inadvertently committing a criminal offence, and will impose far more burdensome duties on UK lawyers than their European counterparts, solicitors warned this week


The Law Society said that the way the Treasury intends to implement the third money laundering directive could put 'even the most conscientious practitioners' at risk of 'severe criminal sanction'.



The regulations, expected in the next few weeks, look set to oblige solicitors to make extensive inquiries into the 'beneficial owners' of companies and trusts. Toby Graham, a partner at City firm Taylor Wessing, who has examined the issue for the Society's money laundering task force, said the beneficial owner concept was 'unworkable' and would be 'extremely difficult' to apply to English trusts.



He said: 'The concern is that trusts are being victimised, and low-risk situations which just happen to involve a trust will become more bureaucratic, such as charities, pensions, life assurance, and jointly held property. The equivalent structures in civil jurisdictions will not require any customer due diligence. Without a doubt, this could put English lawyers at a disadvantage.'



Law Society President Fiona Woolf wrote to the chief secretary to the Treasury last week, calling for greater clarity on solicitors' obligations. She said it was unacceptable 'for the government to pass the responsibility of interpreting the opaque language of the directive to practitioners'.



Meanwhile, the Society of Trusts and Estates Practitioners has obtained counsel's opinion that the legislation may be open to challenge by any professionals who are prosecuted under it, because it is so unclear. It will lodge the opinion with the Treasury this week.



Robin Booth, chairman of the task force, said the regulations would 'seriously affect' a 'significant number' of practitioners.

The Treasury declined to comment.