Tuesday, October 26, 2004

Money laundering and disclosing of confidential client information by accountants

Plans by home secretary David Blunkett to make the UK 'one of the most difficult environments in the world' for organised crime, could see accountants forced to disclose confidential client information.

A white paper, titled: One Step Ahead: A 21st Century Strategy to Defeat Organised Criminals , will see the Serious and Organised Crime Agency (SOCA) set up, bringing together the responsibilities of the National Criminal Intelligence Service, the National Crime Squad, and sections of the Immigration Service and Customs and Excise.

It is expected to suggest that accountants and other advisers such as bankers and lawyers - normally bound by confidentiality rules - will be forced disclose information about clients that may be involved in organised crime, or face jail themselves.

This will place even more pressure on the profession already reeling from requirements in the Proceeds of Crime Act which force accountants to report any suspicious activities to NCIS or face the threat of prosecution.

Accountants' protests against current legislation to combat money laundering could be paying off as home secretary David Blunkett considers changes to reporting processes.

The Home Office has reportedly opened discussions with professional advisers who are adopting different approaches to deal with the new legislation.

A Home Office spokesman said: 'The Home Office will be looking at the current legislation to make sure we've got the right balance. We are looking at the money laundering reporting processes to make sure they are as effective as possible', reported The Telegraph.

Under new rules accountants, lawyers and other advisers must report to authorities any suspicious transactions carried out by clients. The law was designed to target terrorists and fraudsters but advisers have complained the restrictive laws are hindering their ability to work.