Money Laundering and the Proceeds of Crime

The government has recently introduced tough new rules to crack down on money laundering and the proceeds of crime. The new rules affect a wide range of people, including accountants.

Most of us imagine money launderers to be criminals involved in drug trafficking or terrorism or to be someone like Al Capone. However the new laws and regulations brought in by the government have significantly expanded the definition of what you and I would consider as money laundering.

The general principles remain; money laundering involves turning the proceeds of crime into apparently ‘innocent’ funds. What has changed is that the definition now includes the proceeds of any criminal offence, regardless of the amount involved.

Amongst others, accountants, tax advisors, legal advisors, estate agents and even casinos are now required to comply with the new rules, which require those affected to report a wide range of suspicious transactions to the National Criminal Intelligence Service (NCIS).

Under the new definition of money laundering, reporting suspicious activities includes deliberate tax evasion. For example not correcting VAT errors or under declarations of income.

Those of you who sell goods and accept large cash payments for these goods (equivalent to €15,000, around £10,000) are probably already aware of the new rules, as they require your business to implement similar anti-money laundering procedures.

Accountants generally are concerned about the new rules because if we fail to implement proper procedures and report suspicious transactions we can be heavily penalised and at worse, face prison. Accountants also commit an offence if they tell their clients that they have reported a suspicious transaction seen within their business.

The rules are very new and time will tell as to the nature and volume of transactions reported. In the meantime you may notice that we ask you questions that have not previously been necessary. Sometimes these questions may seem excessive and intrusive, especially where we have known you for a long time. And just like banks, we are now required to prove the identities of any new clients we act for.

If you think that you may be affected by the new rules perhaps because you sell goods for large amounts of cash please do come and talk to us. We can help with the necessary registration process and the development and implementation of suitable policies and procedures.