HC Deb 23 October 2003 vol 411 cc655-6W
Mr. Best

To ask the Chancellor of the Exchequer (1) what implications the Money Laundering Regulations 2003 will have for client confidentiality between professional accountants and their clients; [131853]

(2) if he will introduce a minimum reporting level in the Money Laundering Regulations 2003 at which professional accountants must report their clients for errors and omissions in their financial affairs; [131854]

(3) what assessment he has made of the impact that the Money Laundering Regulations 2003 will have upon the number of (a) persons and (b) businesses evading tax in the UK. [131855]

Ruth Kelly

I propose shortly to lay before the House the new Money Laundering Regulations, and amending orders to the Proceeds of Crime Act 2002 and Terrorism Act 2000. They will bring those providing accountancy services, along with other specified activities and professions, into the regulated sector for the purposes of the money laundering legislation.

The Proceeds of Crime Act requires a person who has knowledge, suspicion or reasonable grounds for knowledge or suspicion, of money laundering as a result of information or other matter that came to him or her in the course of a business in the regulated sector to report this to a nominated person in that organisation, or to the National Criminal Intelligence Service. This obligation to report relates to the proceeds of any crime—regardless of the sum of money involved and will override, in this case, the duty of confidentiality owed to that client.

The new Money Laundering Regulations will require regulated bodies to put in place the systems that will allow them to discharge their responsibilities under the Proceeds of Crime Act.

The subject of a minimum reporting threshold was debated extensively during the passage of the Proceeds of Crime Bill, and was rejected by Parliament (mainly because of the poor correlation between the sums laundered and the seriousness of the underlying offences). Given that the Act has no minimum reporting level, there can be no such de minimis provision in the Regulations.

The UK takes the view that tax evasion is a serious criminal offence. The strengthening of the whole anti-money laundering regime within the UK, and internationally, will aid in the detection and reduction of money laundering and underlying crime, including tax evasion. Ministerial assurances were given during Parliamentary debate on the Proceeds of Crime Bill that the civil settlement procedure known as "Hansard" by which the Inland Revenue deals with cases of suspected tax evasion, where the taxpayer is actively seeking to set their affairs straight, would be unaffected.