Government eases money laundering burden

The regulations obliging accountancy firms to report suspicions of money laundering have been reformed after criticisms that they were too onerous and unworkable.

Changes introduced with the Serious Organised Crime and Police Act 2005 mean that stringent rules introduced last year have been lifted. Accountants will no longer have to report a financial crime as a matter of course even without any information about the culprit or the whereabouts of any property or cash.

The Act, which supersedes parts of the Proceeds of Crime Act 2002, acknowledges that such reporting is of little use to law enforcement agencies and adds to the financial and regulatory burden on business.

The ICAEW, which has campaigned for the changes, said businesses had been given some practical relief.

‘This is an important step as previously this requirement imposed reporting costs on businesses,’ said Felicity Banks, head of business law. ‘While an effective money laundering regime is fundamental to maintaining confidence in UK business, the approach should not be over prescriptive,’ she added.