The professions now have the joys of trying to comply with the 4th Money Laundering Directive, and face the prospect of what is termed the 5th, even if it is not technically a new Directive. The fact that the title of the old Regulations was “Money Laundering Regulations 2007”, and this has now been replaced by “Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017” speaks for itself.
In the current market, nothing is more certain than the present continuing uncertainties as to who controls us and how, other than that many professions are under attack for perceived shortcomings in both complying with their obligations to prevent corruption, and in advising clients. The legal profession is particularly exposed here. It has been attacked by the Home Office, the Treasury and the Competition and Markets Authority. This is not assisted by the failure of the Treasury to sign off on the Law Society’s draft guidance on how to implement the new rules, so hastily introduced by the Treasury itself, for the last two months. Other professions face similar threats.
Added to that, politicians of both the main parties are vying with each other to suggest a cure for these perceived ills, but are equally uncomprehending of the issues and powerless to do anything effective about it.
The professions are expected to act as a gate-keeper, to consider all the risks, to conduct investigations as to counterparties’ and clients’ wealth and sources of funds. If anything were to go wrong, especially with the new requirement to have written procedures in place [see Regulation 20(1)(d) of the new Regulations], operators will be judged with the wisdom of hindsight, with all attendant dangers of publicity for professionals, and the converse benefits for those who sit in judgement.
Those who sit in judgement will themselves be judged if the proposed and snappily-titled OPBAS [Office for Professional Body AML Supervision], gets involved. None of the existing regulatory bodies are overwhelmed by this suggestion.
The “professions” looking askance at all this include not only lawyers and accountants, but also estate agents, auctioneers, casino operators and others dealing with liquid assets.