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18/02/2004
UK businesses unprepared for anti-money laundering laws, warn PwC
Tens of thousands of UK businesses face stringent anti-money laundering regulations from 1 March this year, according to analysis by the Forensic Services division of accountancy firm PricewaterhouseCoopers.
The new rules are designed to strengthen the UK’s financial system against financial crime. However, they involve a substantial increase in the number and type of businesses subject to anti-money laundering regulations.
For the first time, retailers of high-value goods such as car dealers, jewellers, auctioneers, fine art dealers and yacht brokers will need to comply with regulations whenever a transaction involves a total cash payment of more than £10,000. Estate agents and casino operators will also be included in the new regulatory regime. The law will also affect professional services firms, including accountants, law firms, and insolvency and tax advisers.
PwC predicts that a large number of businesses may be unaware of the requirements and some may find difficulty in complying, particularly those lacking a professional or supervisory body. However, failure to comply and report on possible proceeds of crime could be costly. Failure to report carries a penalty of up to five years’ imprisonment and/or a fine.
Andrew Clark, partner in the Investigations and Forensic Services practice at PwC, said: “The extension of anti-money laundering laws leaves fewer loopholes for criminals to exploit. It will provide valuable additional information to the police, and prosecutions should rise. However, many businesses affected by the regulations for the first time will face up an up-hill task to comply. Failure to do so may result in damage to company reputations and, possibly, in prosecution and imprisonment.”
Under the new regulations companies will have to:
(SP)
The new rules are designed to strengthen the UK’s financial system against financial crime. However, they involve a substantial increase in the number and type of businesses subject to anti-money laundering regulations.
For the first time, retailers of high-value goods such as car dealers, jewellers, auctioneers, fine art dealers and yacht brokers will need to comply with regulations whenever a transaction involves a total cash payment of more than £10,000. Estate agents and casino operators will also be included in the new regulatory regime. The law will also affect professional services firms, including accountants, law firms, and insolvency and tax advisers.
PwC predicts that a large number of businesses may be unaware of the requirements and some may find difficulty in complying, particularly those lacking a professional or supervisory body. However, failure to comply and report on possible proceeds of crime could be costly. Failure to report carries a penalty of up to five years’ imprisonment and/or a fine.
Andrew Clark, partner in the Investigations and Forensic Services practice at PwC, said: “The extension of anti-money laundering laws leaves fewer loopholes for criminals to exploit. It will provide valuable additional information to the police, and prosecutions should rise. However, many businesses affected by the regulations for the first time will face up an up-hill task to comply. Failure to do so may result in damage to company reputations and, possibly, in prosecution and imprisonment.”
Under the new regulations companies will have to:
- Introduce suitable training for all staff to recognise potential money laundering, as well as provide guidance on how to report suspicions to the authorities;
- Establish internal procedures appropriate to prevent money laundering;
- Appoint a Money Laundering Regulations Officer (“MLRO”);
- Maintain identification procedures for those with whom they do business;
- Maintain records of identification and of all transactions for at least five years from the date the business relationship ended.
(SP)
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