UK Law Society Demands Clarification Of Money Laundering Regulations

by Robin Pilgrim, LawAndTax-News.com, London 16 January 2007

The UK's Law Society warned on Friday that new money laundering regulations could put solicitors at risk of inadvertently committing criminal offences because they are "impossible to interpret" in practice. It also warned that the new rules will increase the cost to clients of solicitor’s work in dealing with trusts.

A number of the terms in the new EU Directive are unclear, according to the Law Society, and unless the Government clarifies them, solicitors will have to make extensive enquiries – at clients’ expense – in order to avoid inadvertently committing a criminal offence.

The Law Society is demanding that the Government makes regulations with workable definitions of vital terms.

Commenting on the Government’s implementation of the 3rd Directive on Money Laundering, Fiona Woolf, Law Society President, announced that:

“It is unacceptable for the government to pass the responsibility of interpreting the incomprehensible language of this Directive to solicitors. The government must resolve these problems now, rather than leaving the matter to be sorted out later by guidance or in the courts."

An example of the ambiguity of the Directive provided by the Law Society concerns when solicitors must verify the identity of beneficiaries in trusts, as the legislation fails to provide workable definitions of vital points such as the test to determine when control of assets actually passes to the beneficiary of a trust.

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