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Monday, 15th April 2024
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Lawyers, accountants, estate agents to report money laundering - EU proposal Back  
A proposal to update and extend a 1991 Directive to counter money laundering has been put forward a by the European Commission.
Under the July proposal, external accountants and auditors, real estate agents, notaries and lawyers carrying on financial transactions, dealers in precious stones and metals, transporters of funds and casinos would be required to fulfil procedures on client identification, record keeping and reporting of suspicious transactions.

The new proposal would oblige Member States to combat laundering of the proceeds of all organised crime and fraud against the budget of the European Union (EU), whereas rules current apply only to the proceeds of drugs offences.

The new rules would meet or go beyond international guidelines to counter money laundering established by the countries of the Financial Action Task Force (FATF).

The proposed amendments were identified as one of the top priorities of the Action Plan for Financial Services endorsed at the June 1999 Cologne European Council.

The Commission said that ‘the wider coverage corresponds to the dramatic increase in non-drugs based organised crime and would not only improve reporting of suspicious transactions but also, above all, facilitate international cooperation between judicial and police authorities in different countries’.

There had been ‘frequent reports of the services of lawyers and accountants being misused to help hide criminal funds’ and ‘numerous cases’ where laundering was carried on in the real estate sector.

The Commission accepted that lawyers would be exempted from any reporting requirement in any situation connected with the representation or defence of clients in legal proceedings.
‘To make full allowance for lawyers’ professional duty of discretion’, the Commission noted, ‘Member States would also be given the option of allowing lawyers to communicate their suspicions of money laundering by organised crime not to the normal anti-money laundering authorities but to their bar association or equivalent professional body.’

The Commission said it is striving to include the legal profession in the anti-money laundering effort while safeguarding the special role of the lawyer in our society. Under the
proposal, potential money launderers who attempted to misuse the services
of a lawyer, possibly by providing inaccurate or incomplete information, would be liable to be reported to a higher authority. At the same time, lawyers would have the advantage of
not being left to manage alone when faced with a suspicion of serious
criminal activity.

In the case of notaries and other independent legal professionals the obligations of the Directive would apply in respect of specific financial or company law activities where the money laundering risk is the greatest (e.g. buying and selling of real property or business entities,
handling clients’ money, securities or other assets, opening or managing bank, savings or securities accounts, creation, operation or management of companies, trusts or similar
structures).

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