 |
 |
Money Laundering
October 18, 2001 12:00 AM
By Sarah Ludford MEP in The Times - Letters to the Editor
By Sarah Ludford MEP in The Times - Letters to the Editor
I urge European governments to adopt a common sense interpretation of the rules against money laundering when implementing the new EU Directive into national law, especially on requiring lawyers to report suspicious transactions by their clients.
It will be argued by some (as you report, 16th October) that the newly-agreed Directive only requires lawyers to report on their clients' involvement in money laundering if they know that is the purpose of the transactions they are asked to advise on. But this would of course make a nonsense of the fight against the 'washing' of dirty money.
Fortunately the actual text makes clear that reporting is required 'of any fact which might be an indication of money laundering', and the specified exemption for lawyers is only under tightly defined criteria of legal privilege, essentially when giving neutral advice on the state of the law or when representing them in court proceedings. So the only feasible interpretation is that lawyers who have a shrewd suspicion, when they are consulted, that their clients are up to no good should inform the authorities.I am sure this is how 'know' would be interpreted under English law.
The whole rationale of anti-money laundering rules - as the European Commission made clear in its 1999 proposal to tighten up the existing Directive - is that the basis for reporting must be suspicion, since setting a threshold of solid evidence is utterly unrealistic. As successive international reports have made clear (including from the UN and G7 Financial Action Task Force) lawyers become even more vulnerable to being exploited as banks tighten up, so their sensible inclusion in the scope of the Directive is essential.
Thus all Member States should adopt a common-sense approach. Any lawyer who knew in the strict sense that his client's purpose was illegal but still actively advised him how to do it would obviously be bent if he colluded, and should surely be struck off in any case! In addition, I hope all Member States will declare that they have no intention of invoking the option to exempt lawyers from the ban on tipping off clients that the authorities have been alerted.
In my opinion, the majority in the European Parliament has not covered itself in glory over this saga. As a qualified but non-practising barrister myself, and as a Liberal Democrat, I am staunchly supportive of proper legal professional privilege, but the hysteria from some quarters has been absurd. The Directive should have been wrapped up before the summer. Relieved as I am that a consensus has at last been reached, the Directive now needs to be implemented with vigour.
What would you like to do next?
-
Subscribe for updates
Follow the party's activity on...
- Twitter:
- Liberal Democrats
- Facebook:
- Liberal Democrats
- YouTube:
- Liberal Democrats