Money Laundering (Hansard, 13 December 2001)

§ Miss Melanie Johnson

The Home Office has policy responsibility for primary legislation on money laundering offences, while HM Treasury is responsible for regulating the financial services industry, including policy responsibility for secondary legislation such as the 1993 Money Laundering Regulations (which are shortly to be amended).

The Proceeds of Crime Bill, which is currently before Parliament, will consolidate and strengthen existing anti-money-laundering legislation. It will also provide new power for the investigation of money laundering. It is currently an offence for any person to fail to report knowledge or suspicion of drug or terrorist money laundering which comes to their attention in the course of their trade, business or profession. The Bill replaces that offence with an offence for a person working in a sector covered by the Money Laundering Regulations to fail to make a report to the authorities if he knows, suspects or has reasonable grounds to know or suspect that another person is laundering the proceeds of any criminal activity.

At present, not all accountants are regulated under the 1993 Money Laundering Regulations (although all are subject to the general obligation to report knowledge or suspicions of drugs or terrorist money laundering arising in the course of one's trade, business or profession). However, under the second European money laundering directive, which is expected to be formally adopted after Christmas, accountants will be brought within the regulated sector. When this directive is implemented in UK law, accounts will be subject to both the provisions of the Proceeds of Crime Bill, and the requirements of the Money Laundering Regulations as regards identification of customers, record keeping and reporting of suspect financial transactions.

My right hon. Friend the Secretary of State for Trade and Industry is responsible for the statutory oversight of the arrangements for the regulation of company auditors and, in that respect, of the adequacy of the procedures of recognised accountancy bodies for investigating and disciplining auditors. This Department also has a wider interest in the regulatory arrangements of the main accountancy bodies for investigating and disciplining their members, including those who may have engaged in or facilitated money laundering, or who may have failed in their duties to report suspicious transactions to the appropriate authorities. Members of these bodies are subject to byelaws and regulations which make them liable to disciplinary action and penalties. Under reforms previously agreed between the bodies and the Government, a new Investigation and Discipline Board, under the aegis of the Accountancy Foundation, will take over responsibility for disciplinary cases which raise significant public interest issues.

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