UK money-laundering rules target corrupt officials

Tuesday, January 23, 2007

Financial institutions in Britain will have to ensure foreign officials and politicians are not depositing corruptly obtained funds under anti-money-laundering proposals published by the government Monday.
The tougher rules will affect more than 200,000 firms across the financial, accounting and legal sectors, plus estate agents, insurance brokers and casinos.

The proposed rules will implement the European Union's Third Money Laundering Directive, adopted during Britain's EU presidency in 2005.

Britain has to bring the rules into law by December as EU states harmonize their money-laundering and anti- terrorism financing legislation from their current patchwork of inconsistent regulations.

The directives will for the first time require banks and others to investigate the finances of foreign politicians, public officials and their families to ensure their wealth has been legally obtained.

Due diligence checks will have to be made on these "politically exposed persons" in a crackdown on overseas corruption. Casinos will be required to choose between checking the financial probity of gamblers either as they enter premises or when their gambling reaches 2,000 euros.

Keeping records of customer identity, transactions and other money- laundering checks already costs Britain's financial services industry around 250 million a year, the Financial Services Authority said. REUTERS

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