Lawyers have been labelled ’professional enablers’ of financial crime in the latest move to clamp down on suspicious wealth. In an interview published in today, the Financial Times quotes the head of the National Crime Agency’s economic crime unit as warning that lawyers and accountants will be expected to file far more reports flagging suspicious transactions.
'Do we have concerns about the effectiveness of . . . customer due diligence in parts of the legal profession and the accountancy sector? Yes, we certainly do,' the newspaper quotes Donald Toon as saying. He added that professionals were 'closer to the customer'.
Unexplained wealth orders, which came into force last January under the Criminal Finances Act, allow the authorities to seize property unless subjects can explain how they could legitimately afford it.
It is not the first time that the agency has employed the 'professional enabler' term. In 2016 the agency claimed that solicitors’ expertise is ’crucial to the laundering of illicit funds’, prompting an angry response from the Law Society.
Some solicitors dismissed the agency's hard line as a publicity stunt. David Corker, partner at criminal defence firm Corker Binning, said: 'Periodically heads of law enforcement agencies court publicity for themselves where they elaborate about dire threats to our national wellbeing and they unveil their groundbreaking initiative to tackle them.' These efforts are usually prompted by fears that the Treasury is due to scrutinise the agency’s budget or that the Home Office is reviewing the agency’s future, he observed.
Accusing Toon of 'lazy and populist thinking,' he said: 'Thinking that the recent events in Salisbury provides him with cover, Mr Toon plays to the gallery of stereotypes and folk-devils. The Russians are coming and we at the NCA are the bulwark ready to repulse them.'
A Law Society spokesperson said: 'The importance of fighting money-laundering cannot be over-stated, but the loaded term "professional enablers" suggests that lawyers are either willing or careless facilitators of criminal activity. We see law firms taking their AML responsibilities seriously. If there are grounds for suspicion, a firm must make a report, it is as simple as that. But it is not for lawyers to make up the law – if the government wants to ban Russians or anyone from buying property, it should legislate.
'Everyone is agreed that the suspicious activity reports regime needs overhauling: it encourages too many reports of little or no intelligence value.'
In July the Law Commission recommended more targeted anti-money laundering laws saying that current reporting requirements place an ‘onerous compliance burden’ on the regulated sector, particularly law firms.