Money Laundering - Are you ready for the New Era?
‘Money Laundering – Are You Ready for the New Era?’
On the 1st March 2004 the Money Laundering Regulations 2003 come into force and for many of us in the business community they are going to have a major impact on the way that we conduct our daily business. These regulations have been passed as a result of an EU directive and lay down stringent guidelines for businesses. As of this date, all accountants, solicitors, insurance brokers, stockbrokers, auctioneers and valuers will be subject of the rules. One of those rules states that those firms must have a Money Laundering Reporting Officer and that they must train all their staff in anti-money laundering matters. What is more, failure to do so may result in a 2-year sentence of imprisonment! The message is, ‘Have you trained your staff yet?’ In addition to businesses that operate within the financial sector, the rules also extend to anyone carrying on a business whereby they become engaged in a one-off transaction or series of linked transactions that amount to £10,000 or more. They also become subject to the regulations and can be prosecuted for negligently failing to report a suspicion of money laundering. Therefore jewellers, fine art dealers, antique dealers and motor dealers will need to be aware of the implications. Many of you will say, ‘What is money laundering?’ Simply defined, it is a procedure to change the identity of illegally obtained money or goods so that it appears to have originated from a legitimate source. Revenue offences are now firmly classified as criminal conduct for the purposes of this legislation and there is no minimum value for tax evasion. Beware those traders and businesses that deal mostly in cash; your accountants will have to exercise extreme caution when dealing with your tax affairs from now on. Of course there is a cost implication for business in setting up procedures to deal with this but the cost should be set against the risk of the damage to reputation if the business was found to have inadvertently helped criminals launder money. Add to that the potential for imprisonment, up to 14 years for a money laundering offence and up to 5 years for failing to report a suspicion. Don’t ignore these rules because if you do it could well be something from which neither you nor your business will ever recover.
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