Money Laundering And The Proceeds Of Crime Bill

Profession:Herbert Smith

Following the events of 11 September, it was announced that increased measures would be taken to prevent the financing of terrorist organisations. Even before these attacks, the fight against money laundering was set to move up several gears. The EU finalised the second EU Directive on Money Laundering on 20 November 2001, which subjects more organisations to the Money Laundering Regulations as well as extending in Europe the scope of the offences for which reports of suspicions have to be made and those who have to make them. The FSA's money laundering rules became effective on 30 November 2001 and the FSA has announced that combating money laundering will be one of its primary focuses of attention. The Government laid the Proceeds of Crime Bill before Parliament on 18 October 2001, which will significantly extend the existing anti-money laundering legislation. The Bill also introduces new methods to recover and investigate the proceeds of crime.

The fight against money laundering now has a greater priority on the world agenda. In connection with the investigation into events on 11 September, the FSA has asked firms to review their dealings with certain individuals and groups whose names were included on a list released by the United States, which the FSA published on its website. The Chancellor, Gordon Brown, also announced on 15 October a new series of measures to combat the financing of terrorism. The relevant measures are:

police powers to freeze funds at the outset of an investigation;

tougher obligations to report suspicions that funds are destined for terrorism;

police powers to monitor accounts which may be used to facilitate terrorism;

police powers to seek Court orders for financial institutions to produce records where a breach of the Money Laundering Regulations or sanctions regulations is suspected;

legislation to allow wider information sharing between government departments, in particular between the Inland Revenue, Customs and Excise and the Police; and

Bureau de Change, money transmission and cheque cashing services are now subject to the Money Laundering Regulations which came into force on 12 November 2001.

The extent to which these new initiatives extend beyond the provisions in the Proceeds of Crime Bill and the Terrorism Act 2000 is unclear. It is also uncertain how the EU Directive will be implemented in the UK since, to an extent, our anti-money laundering legislation already goes beyond the requirements of the...

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