EU money laundering rules unclear

Solicitors are in danger of inadvertently committing criminal offences because new money laundering regulations are impossible to interpret in practice, the Law Society warns.

The society also claims that the government’s move to implement the Third Money Laundering Directive will increase the cost to clients of solicitor’s work in dealing with trusts. It is demanding that the government makes regulations with workable definitions of vital terms.

The Directive concerns when solicitors must verify the identity of beneficiaries in trusts. However, the society claims, it 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.
Law Society president, Fiona Woolf, says that a number of the terms in the new EU Directive are unclear, and unless the government clarifies them, in making the regulations, solicitors will have to make extensive inquiries to avoid inadvertently committing a criminal offence. This will only serve to bump up the cost to clients.

She says: “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.”