Money Laundering News

	KAYE TESLER SOLICITORS
Tel: 020 8809 6756	Email: kt@uklaw.net	Fax: 020 8802 0660

ARCHIVED MONEY LAUNDERING NEWS 2003

17/12/03 WE ARE TAKING A BREAK

OUR NEWS SERVICE IS NOW TAKING A BREAK UNTIL 5TH JANUARY.

WE WISH ALL OUR READERS A HAPPY HOLIDAY.

16/12/03 UK CUSTOMS TO HAVE ITS OWN PROSECUTING BODY

Recently, a question was raised in Parliament about the responsibility of prosecuting Customs cases being handed to a specialist division.

The next day the Attorney General announced the creation of an independent Customs and Excise Prosecutions Office (CEPO) to be established by the end of 2004.

Another layer of civil servants! Have a look at the articles we ran on 11th and 12th November. More civil servants are not the answer. Better and probably more expensive advice, may be a better solution.

15/12/03 ARMS COMPANY CORRUPT?

BAE, Britain's biggest arms company has been accused of making illegal commission payments using Swiss banks and a tiny island in the Caribbean. Apparently there is a vault full of incriminating papers and are verified by bank records. The documents have come to light as part of a long-running investigation into BAE Systems' arms sales and the allegations of corruption which surround them. BAE denies any illegality or wrongdoing.

Why should such an allegation be a surprise? Whether true or not there is a general perception of the arms trade of ‘commissions’ being paid and earned.

12/12/03 A REGULATOR TOO FAR

We all constantly hear and complain of bureaucracy. Red tape is a an expensive nuisance. While we are free, we cannot be so free as to do what we like without regard for the consequences on others, so of course some degree of regulation is necessary. However, if too little regulation is a bad thing then how much worse is too much regulation.

Abbey National are by no stretch of the imagination a criminal organisation, yet they have just received a massive fine. Did they launder money? – it was not even alleged that they had done so. Were they fined by the Courts? – of course not there were no proceedings against them. They were fined by a Regulator!

We need to be very careful about adding layers of regulation and giving enormous power to bodies over whom the Courts have limited authority but who exercise immense power.

11/12/03 ABBEY NATIONAL FINED

Yesterday we reported the heavy fines imposed on the Abbey National by the FSA. The exact figures are that Abbey National was fined £2m for breaches of the FSA's Money Laundering Rules and Abbey National Asset Managers Limited was fined £320,000 for systems and control breaches.

Andrew Procter, FSA Director of Enforcement, is reported as having said, "The FSA has repeatedly made it clear to the regulated community that it expects all financial firms as part of their compliance regime to establish and maintain strong and effective anti-money laundering procedures. The failure by Abbey National to monitor compliance with FSA Money Laundering Rules demonstrated a marked lack of regard for its regulatory obligations. Abbey National failed to ensure that suspicious activity reports were promptly considered and reported to the National Criminal Intelligence Service and to identify customers adequately.”

Note and beware. The FSA clearly welcomes the publicity that making examples such as the above will act as a warning to the whole regulated sector.

10/12/03 ABBEY FINED

The FSA has fined the Abbey National £2m for its failure to properly apply internal anti-money laundering measures. The fine is the second highest imposed by the FSA and has been imposed under the old regulations. The new regulations laid before Parliament on 28th November last, which are still not available, are expected to impose and even harsher regulatory regime on the regulated sector.If you are reading this, then have no real doubt, you are in the regulated sector.

09/12/03 EUROPEAN POLITICS ARE RIDDLED WITH MONEY LAUNDERING

François Léotard the French defence minister from 1993 to 1995, has been charged with money laundering. His defence is that he only did what "dozens of prime ministers and a certain number of presidents" had done before him.

In Warsaw a famous film producer attended court in handcuffs to face charges of attempted bribery of Leszek Miller, the Polish Prime Minister.

In Lithuania their parliament is debating a link between President Paksas and a ‘shadowy Russian businessman.’

Vladimir Spidla, the Czech Prime Minister, has been questioned about the Government’s role in a motorway contract that was not opened to tender.

The Slovakian parliament has lifted its standard deputy’s immunity from Gabriel Karlin as an envelope containing £10,000 was found in his briefcase.

08/12/03 TRIAL BY JURY

The Criminal Justice Bill ran into trouble in the House of Lords and ultimately, in order to progress the Bill, it was agreed that in order for it to be passed with the restriction on the right to a jury trial, both Houses of Parliament would have to vote in favour in cases of serious fraud.

During the ‘negotiations’ in an effort to win peers' support the Home Secretary offered two concessions. He defined what form of jury intimidation would warrant removal of jury trial and said that he was planning to remove jury trial only in long or complex fraud cases, rather than wider cases of money laundering.

05/12/03 ANTI MONEY LAUNDERING REGULATIONS 2003

Last Friday the Treasury sneaked the long expected revised anti money laundering regulations before Parliament. The press, and unfortunately most professionals, seems to have almost missed it completely.

The Regulations are necessary amending Orders to the Proceeds of Crime Act and the Terrorism Act and complete the implementation of the 2001 EC Money Laundering Directive.

The Treasury has repeatedly announced that we will all have 3 months in which to implement the Regulations and indeed they will come into force on 1 March 2004, which will be 3 months after the Regulations were laid. This however totally disregards the Xmas holiday period and the fact that copies of the Regulations cannot yet be obtained. The Treasury website states that they should be available on their website and from HMSO from mid-December.

04/12/03 NCIS INNUNDATED

There is a report that the National Criminal and Intelligence Service (NCIS) have limited resources to follow up the current crop 100,000 reported annual suspicious transactions in the UK. Reports are estimated to rise to 150,000 next year. The report goes on to say that the current response from NCIS is that they can manage the caseload. However, is appears that the NCIS only follows up those reports on individuals who have an existing criminal record.

Unless a di minimis rule is introduced they will soon become bogged down with reports. Perhaps inundating NCIS will be a way to force the introduction of a di minimis rule.

03/12/03 £1M BURIED

A businessman has been jailed for six and a half years by a Judge sitting at Preston Crown Court. He had buried nearly £1 million in his garden to avoid paying it in tax. He had entered a guilty plea to 25 charges including tax evasion, money laundering and false accounting.

A plea of guilty results in a discount on sentence, yet this man still received a lengthy sentence indicating the attitude of the Courts to this type of offence.

02/12/03 ONE CIGARETTE TOO MANY

The European Commission is taking the maker of Camel cigarettes to court in the US, accusing them of money laundering. A spokesman for the Commission said "The main purpose of this complaint is to... stop the laundering by RJ Reynolds of the proceeds of illegal activities." The complaint laid concerns cigarette smuggling.

The lawsuit states: "The defendants have, at the highest corporate level, determined that it will be a part of their operating business plan to sell cigarettes to and through criminal organisations and to accept criminal proceeds in payment for cigarettes by secret and surreptitious means.".

We hope that the US Courts have a similar concept of ‘abuse of process’ as exits within our jurisdiction.

01/12/03 FLASH - FLASH - FLASH

The following has just appeared on H.H. Treasury website.

The Financial Secretary to the Treasury, Ruth Kelly, today laid before Parliament the Money Laundering Regulations 2003, together with amending orders for the Proceeds of Crime Act and the Terrorism Act. The main effect of the Regulations is to complete the implementation in the UK of the 2nd EC Money Laundering Directive, agreed in December 2001. The Regulations will come into force from 1 March 2004.Copies of the Regulations should be available from HMSO from mid-December.

28/11/03 SURVEY REVEALS REPORTING NOW COMMON

Deloitte & Touche have released findings from a survey of 167 senior executives which concludes that financial services institutions, "face significant challenges with most projecting an increase in compliance costs over the next year."

The legislation is clearly biting and they report that approximately half of those who replied confirmed that their firm/company filed two or fewer suspicious activity reports on average each month but 14% said they filed an average of 25 or more monthly.

It’s an ill wind that does not blow someone some good. The development of this area of law is an opportunity for lawyers and forensic accountants.

27/11/03 SCOTTISH A.R.A . NOT SELF FUNDING.

Further to our item of yesterday questioning the whether the Assets Recovery Agency (ARA) should be self funding, figures released by the Scottish executive show that in its first 12 months the Criminal Confiscation Unit in Scotland has only seized £1.2m and the ARA has collected about £345,000. Margaret “Big Mags” Haney, (12 years for drug dealing) was forced to pay only £3,400. It has been admitted that the legislation so far has only been of use in confiscating money from low-level dealers. The ‘big boys’ have not been touched.

As we said yesterday, only time will tell whether the system will be effective and just.

26/11/03 SELF FINANCING LAW ENFORCEMENT

The Times recently carried an interesting article on financing the Asset Recovery Agency (ARA) . Jane Earl, its head is quoted as saying that, like any good government department, it is intended to be self-funding. The annual budget of the ARA is £13 million. It already has its recovery “target” of £10 million for this year held under restraining Orders on cases that have yet to come to trial. It intends to be fully self-funding by 2005-06. The key to its success is that it has power to confiscate assets from those merely suspected of having committed a crime and only has to prove its case for forfeiture on the balance of probabilities test.

The real problem lies in the principal of self funding. If the Government is unwilling to provide funding is it acceptable to give the ARA the power to confiscate assets without satisfying the safeguards of the criminal justice system?

Has the pendulum swung too far? Will the ARA take on cases to ensure that it has the funds to self perpetuate? Only time will tell.

25/11/03 ANTI-MONEY LAUNDERING - A REAL BUSINESS OPPORTUNITY

Despite posting a loss shares in GB Group rose dramatically after the computer software company announced that it had signed deals with BT to design anti-fraud software. The software will be aimed particularly at the identity fraud, credit fraud and anti-money laundering markets.

The joint venture, known as URU (you are you), will create security checks in highly vulnerable fields in non face-to-face transactions such as the internet or the telephone.

The key to the share rise is the recognition that the fight against money laundering represents a significant ‘clean’ money making opportunity.

24/11/03 SENIOR MANAGEMENT HELD TO ACCOUNT

The Financial Services Authority (FSA) has imposed a fine of £150,000 on a former Company CEO for failing to detect or prevent attempts to mislead the Japanese Revenue authority 7 years ago. Additionally, it has banned two other company officials for a similar transgression 6 years ago.

Andrew Procter, FSA director for Enforcement, is quoted as saying: "This is an example of the FSA holding the senior management of a global company to account. The penalty of banning an individual is the most serious action available to the FSA and the fine ranks amongst the highest ever imposed by a UK regulator on an individual for this type of breach.”

The moral is that senior management must take active steps to be aware of what their juniors are up to.

21/11/03 MONEY LAUNDERING PREDICTED TO BECOME THE MOST COMMON CRIME

Unsurprisingly the preliminary findings of a survey conducted by Coleman - Parkes show that the subject of financial crime is high on the corporate agenda. Over the last two years fraudulent claims have been regarded as the greatest cause of losses but the predictions are that in the next two years, money laundering will become the most common type of felony. The survey shows that 29 per cent of companies expect this to be their greatest issue.

We wonder how much was spent on this survey. The results are obvious as any crime committed in order to obtain money results in the creation of dirty money, the essential ingredient for a money laundering offence.

Firms acting in the criminal sphere may be looking at a growth practice area.

20/11/03 A SOLICITOR’S RESPONSIBILITIES

A recent letter to the Law Society’s Gazette correctly interprets Lady Butler Schloss’ recent judgment in P-vP. On a strict interpretation we must report the most minor infringement on the part of our clients. We are at risk of being involved in investigations in cases where we may have no reason even to suspect wrong doing.

To take an extreme example. A man steals £1, buys a lottery ticket, wins £5m. That £5m is the proceeds of crime.

19/11/03 THE SCOTSMAN NEWSPAPER ISSUES A WARNING

The Scotsman newspapers has correctly anticipated one of the major effects of the anticipated Regulations when it states, "SCOTTISH firms which accept large cash payments have been warned they face prosecution under new money laundering regulations unless they register as a high-value dealer with the taxman." The Regulations are of course anticipated in the new year but they warn that firms which accept cash payments of more than £9000 in any currency will have to register with HM Customs and Excise and implement procedures to protect against being used for money laundering.

It goes without saying that the Regulations when published will apply not only to Scotland but the whole of the UK.

18/11/03 EXCHANGE RATES.

We all know that there can be wide fluctuations in the rates of exchange of foreign currencies. Those of us in every day practice must have a definitive guide of the rates applicable for the duty of customer identification and other purposes in both Regulations and other laws under the European Money Laundering Directives.

The figures are available on the internet but to assist you we publish three of the rates against the Euro that you might come across.

GBP,Pound,sterling 0.69
USD,US,dollar 1.16
CHF,Swiss,franc 1.55

17/11/03 AN ADDITIONAL WORRY FOR SOLICITORS – POTENTIAL LIABILITY AS A CONSTRUCTIVE TRUSTEE

Solicitors have been aware for some time that they can become liable to repay monies to victims of fraud where they have handled the monies on behalf of a client in breach of trust. The impact of a recent decision in Switzerland confirms the concern, which is particularly acute in money laundering cases where a solicitor reports a suspicion of fraudulent activity to the authorities. Consent from the authorities will not give a solicitor a defence to liability as a constructive trustee.For an example of the way in which the constructive principles operate in England and Wales, see Bank of Scotland v A Ltd [2001] 1 WLR 751, [2001] Lloyd's Rep Bank 73, [2001] 3 All ER 58

14/11/03 NCIS REVIEWS ITS GUIDANCE TO THE LEGAL PROFESSION

Guidance given by NCIS to the legal profession about when a solicitor may inform a client that a suspicious activity disclosure report has been made is being reviewed following publication of the judgement by Dame Elizabeth Butler-Sloss P in the case of P v P. The case involved the negotiation of an agreement to divide matrimonial assets between divorcing spouses where tax had not been paid on the assets. One significant point to emerge from the judgement is the danger of the legal profession relying too heavily on guidance given by NCIS, or for that matter any law enforcement agency operating in this area. The bottom line for solicitors is that they must continue to scrutinise the meaning of the new legislation to ensure that they stay within its terms, and where necessary take expert specialist advice and not rely alone on NCIS whose disclosure web page can be found at http://www.ncis.co.uk/legaldisclosures.asp

13/11/03 NCIS AT ODDS WITH THE LAW

It is clear that the Proceeds of Crime Act allows certain specific defences to solicitors when they are acting in privileged circumstances. On the other hand NCIS has made it clear that they expect solicitors to report any suspicious activity. The problem is that very few of our profession have a real understanding of what constitutes a privileged communication. It is FAR from the blanket coverage of every communication that we all expect.

When in doubt check the position very carefully, if you feel you need a little time to check, we suggest that you make very clear file notes of the reasons AND the steps you are taking.

12/11/03 A GUARDIAN INVESTIGATION

Yesterday we reported a mess of a case made by Customs. On a similar tack the Guardian Newspaper in a special investigation reports that NCIS and Customs & Excise claim to work well together, but do not like each other. Customs when asked about NCIS are reported as saying "We don't get the service we need from them. In fact, NCIS is not a service at all. It is a player with its own agenda. We have a problem with NCIS."

NCIS unsurprisingly say Customs have no business in law enforcement at all and, "They are supposed to be dealing with excise and the trade in bushmeat, aren't they?"

The ‘dislike’ is such that NCIS set up its own international network of drug liaison officers when Customs already had one. NCIS claims that it has done so because Customs would not share the intelligence.

We are paying for all of this! They should call in their mothers who may well knock their heads together and stop childish squabbling.

11/11/03 CUSTOMS MAKE A MESS OF A MONEY LAUNDERING PROSECUTION

Both the Attorney General and the Treasury have ordered a total review of Customs practices after the collapse of a prosecution because of abuse of process. When a matter came before the Court the prosecution offered no evidence and of course the defendants were freed. The review will be carried out by Mr Justice Butterfield, whose report last July into another failed customs case found serious deficiencies in the way Customs handled informers.

It should not be forgotten that last year a dozen other cases, where defendants have been convicted, now will need to be reviewed.

If the prosecuting authorities cannot be relied upon to get the law and practice in this uncertain area correct, how much more difficult is it for our ever pressured professions.

10/11/03 CHIEF'S SHAKE-UP GIVES FSA NEW FOCUS

John Tiner, the new chief executive of the Financial Services Authority has announced a radical management overhaul of the FSA aimed at speeding up punishment of wrongdoers. As part of the shake up he will make the enforcement division report to him personally.

The new structure will create eight executive posts with responsibility for areas such as insurance, asset management and banking and will include a post created specifically to look at financial crime with emphasis on anti-money laundering initiatives.

The managing directors of the new FSA divisions will be paid about £300,000 a year each. So they at least should be above temptation!

07/11/03 BENAZIR BHUTTO FOUND GUILTY OF MONEY LAUNDERING

A Swiss magistrate has found former Pakistan prime minister Benazir Bhutto and her jailed husband guilty of money laundering. A Pakistani official says they have been ordered to repay more than $11 million. Bhutto and her estranged husband, Asif Ali Zardari, deny any wrongdoing and say they aren't sure if they'll appeal the decision. They have been given a six-month suspended sentence and fined $50,000 each.

Notwithstanding the conviction, the Financial Times has reported that Swiss banks have lifted a block on money held in accounts by Bhutto.

06/11/03 ANTI-MONEY LAUNDERING LAWS FUELING A PROPERTY BUILDING BOOM

A report from a group of criminologists at Malaga university warns that a mix of dirty money and northern Europeans seeking houses in the sun risks pushing Spain's Costa del Sol into a property boom funded by illegal funds. This in turn, they report, is likely to result in an increasing control of building operations falling into the hands of organised crime. The academics have identified five stages leading to legitimate political control of the area being ceded to organised crime and that local Councils are already on the first step, and some are suspected to be higher up the ladder.

Hot money warmed in the sun..

05/11/03 ACCOUNTANTS - BE ON YOUR GUARD

Accountants should note that when Ruth Kelly, the Financial Secretary to the Treasury, made her announcement last week she made it clear that the Government proposes to give no ground in the face of strident appeals from accountancy bodies that legal professional privilege, currently available only to lawyers, should be extended to cover accountants dealing with suspected tax evasion and further, that tax evasion as such is regarded as a serious crime. Accountants have no lee way, they must report every offence, not matter how minor.

04/11/03 GOVERNMENT ANNOUNCEMENT

Ruth Kelly, Financial Secretary to the Treasury, last week announced that she proposed shortly to lay the new Money Laundering Regulations before Parliament yet, as we published yesterday, H.M.Treasury has now announced a delay. Nevertheless we consider important that she said that the government is holding to its view that there should be no minimum reporting threshold in the regulations and that tax evasion should be regarded as a serious criminal offence, irrespective of the sums involved.

03/11/03 MONEY LAUNDERING REGULATIONS

H.M.Treasury website has the following announcement. "The Money Laundering Regulations 2003 have been delayed and are currently undergoing internal Government scrutiny. When the Regulations are laid we will announce it on this website."

The Regs have been delayed, officially, and there is no date for publication!!!

31/10/03 WILL THE CHELSEA MONEY DRY UP?

RUSSIAN tycoon AND Chelsea money man, Roman Abramovich may be dragged into a £2 billion in a US Court. American lawyers are advising another Russian businessman who claims to have lost millions of dollars as a result of alleged criminal activity by a business partner of Abramovich. It is reported that the lawyers have set their sights on his £150 million acquisition of the Premiership club.

I am certain that our regular readers will be able to guess what is the “alleged criminal activity by a business partner”.

30/10/03 A GOVERNMENT ANNOUNCEMENT

Ruth Kelly, the Financial Secretary to the Treasury, has at last said something about the publication of the long awaited Money Laundering Regulations. She said that she would shortly be laying them before the House. The only indicator of when she will do so came by default. She said that the Government would allow three months for implementation after they had been laid and that the Regulations could then come into effect in January 2004. It follows that she has today and tomorrow only in which to lay the Statutory Instrument.

29/10/03 LADY JUSTICE BUTLER-SLOSS TO BE APPEALED

The recent judgment of Lady Justice Butler-Sloss is, we have heard, to be appealed. The judgment has thrown the profession into confusion and is, it is believed, probably responsible for the delay in the publication of the 2003 regulations. The regulations are to be published shortly even though they are likely to cause considerable problems.

Our whole profession is likely to be caught by the regulations.

28/10/03 NCIS AT ODDS WITH THE LAW

27/10/03 THE FORTY RECOMENDATIONS

24/10/03 CONFISCATION ORDERS NOW IN FORCE

In cases where all the crimes charged or indicted occurred on, or after, 24 March 2003, a new confiscation regime, under the Proceeds of Crime Act 2002, is now in force. Convicted criminals will now not only be punished for their crimes but the proceeds will be liable to confiscation.

23/10/03 OVERKILL?

The Government needs to bring some level of common sense into its anti-money laundering regime. The Guardian Newspaper recently published an article about a mentally disabled person. She receives money from a Government agency which means that she must have a bank account. The Banks knew her condition and that she could not sign her name. Different banks gave different reasons for not opening an account but at they end of the day it boiled down to the fact that the banks were terrified of breaking anti-money laundering rules on due diligence.

A di minimis rule or at least a rule allowing a certain degree of discretion to a money laundering officer who would commit no offence if he acted reasonably, would solve these ridiculous problems. Surely we should concentrate on producing value instead of uselessly chasing paper.

22/10/03 Money Laundering no longer viable at casinos

Lady Cobham has been appointed to oversee UK Casinos. She says talk of casinos being used to launder terrorist money now is laughable. 'There's no leeway to be jack the lad at all. The National Criminal Intelligence Service will tell you that there hasn't been a single casino pursued for money laundering since before the 1968 act. It's the last place I would try and launder money. Everything is videoed.'

21/10/03 MONEY LAUNDERING REGULATIONS 2003

H.M. Treasury’s website still proudly announces that it expects to publish the Money Laundering Regulations 2003 ‘in September.’ The website states that the publication was intended to await the resumption of Parliament. They intended this to mean the resumption of Parliament after the summer break but it was extended until after the party conferences.

Parliament has resumed after the party conferences, but the website announcement has not changed. Our guess is that the recent Judgement of Lady Justice Butler-Sloss has thrown a spanner in their time scale.

Don’t be complacent, you don’t have as much time as may appear. While undoubtedly the Government will still allow you a three month implementation period, the Xmas break will cut the time available and there will be much to do, not the least being to ensure that you have a proper, up to date, anti-money laundering manual AND you have trained your staff.

20/10/03 THE FOUNDATIONS OF OUR SYSTEM OF JUSTICE ARE UNDER ATTACK

There is a build up of pressure as more and more people and organisations begin to fully understand the total import of the Proceeds of Crime Act. The fact that the public will not longer be able to speak freely with their lawyers constitutes an attack on a fundamental freedom.

The Money section of yesterday's Telegraph quoted the words of the then Lord Chief Justice when as recently as 1996 he said, "The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent......it is a fundamental condition on which the administration of justice as a whole rests."

17/10/03 INTERNATIONALLY MONEY LAUNDERING IS NEVER OUT OF THE NEWS

The Russian mogul Vladimir Gusinsky, has been told he is a free man after a Greek court rejected a controversial extradition request. He stands accused of money laundering and fraud in Russia. The appeals court ruled that Mr Gusinsky - one of the Russian oligarchs who made a fortune from the privatisation of state assets after the collapse of the Soviet Union - was innocent.

16/10/03 FATF intensifies anti-terrorist financing campaign

At the Plenary of the Financial Action Task Force (FATF) in Stockholm, the thirty three member body convened to set global standards in the fight against money laundering and terrorist financing. These are complex but anyone dealing with international work and/or one of the ‘listed’ non-cooperative Countries should be aware of the contents. Full details can be found at on the FATF website

15/10/03 REGULATIONS DELAYED?

Over the last couple of days we have published articles concerning the ruling of Lady Justice Butler-Sloss. Her recent Judgment possibly is having an effect on the powers that be as there is now a rumour that in the light of her Judgment the publication of the 2003 Regulations is again being delayed for a re-think.

Our view is that a great deal needs to be re-thought but the Government will wish to remain in line with the FATF 40 Recommendations and the European Directives and will bring in draconian regulations even if they do not quite fit the UK system of law.

14/10/03 REPORTING REQUIREMENTS

Yesterday we reported the Judgment of Lady Justice Butler-Sloss in which she stated, in effect, that everything suspicious has to be reported. The current issue of the Law Society’s Gazette reports a session on Money Laundering. The session heard that solicitors need to be careful about making reports to the National Criminal Intelligence Service (NCIS) in case they clog its resources. Louise Delahunty, chairwoman of the task force, said: “Defensive or routine reporting may result in the rejection of the report and/or the unavailability of the protection given by POCA. This does not mean solicitors should be discouraged from making reports in proper circumstances.”

SO WE ARE DAMNED IF WE DO – DAMNED IF WE DON’T.

13/10/03 Lady Justice Butler-Sloss gives some guidance

Divorce lawyers are no different to anyone else when it comes to money laundering. The Proceeds of Crime Act 2002 (POCA), requires solicitors to report suspicions of crimes and tax evasion is certainly included. Marilyn Stowe, the chief assessor to the Law Society's family law panel is reported to have said: 'This might be particularly problematic in cases where a solicitor acting for one spouse on a divorce becomes aware that assets held by the other spouse - which could be used in settlement - may have been subject to tax evasion. If NCIS then give consent to the settlement to what extent can this be relied on?'

Lady Justice Butler-Sloss in a recent Judgment made it clear that solicitors must for example report matters such as their client or their client’s spouse paying a nanny or a builder in cash to avoid tax.

10/10/03 REFERRALS

Be very careful where you are asked to provide advice to another professional in circumstances where you never have contact with the other professional’s client. Whether you are acting directly for the client or professional adviser may not be clear even where the professional adviser has agreed to pay your fees you will still need to understand the basics of the transaction the underlying client is undertaking to comply with the anti-money laundering regime.

Be particularly wary of the so called hypothetical case. Why should another professional consult you if the case is only hypothetical? Any reasonable person would suspect that the hypothetical case is real and never forget, suspicion is all that is necessary to trigger your reporting obligations.

09/10/03 A PROPER USE OF SEIZED ASSETS?

In his speech to the labour party conference, Mr Blunkett, announced that for the next three years £22.5m a year of cash confiscated from convicted criminals will be "recycled" towards community projects and the law enforcement agencies. He also announced that £15m seized from drug traffickers through the Assets Recovery Agency is to be used to finance new regional asset recovery teams and a joint customs and national crime squad dealing with money laundering crime.

One is forced to wonder why ALL seized and forfeited assets are not specifically earmarked for the fight against crime. It would after all be poetic justice.

07/10/03 SOLICITORS DISCIPLINARY TRIBUNAL (SDT)

In publishing a report of the result of a Solicitors Disciplinary Tribunal (SDT), the Law Society’s Gazette quoted a sentence which we consider relevant to every practice:

“The SDT would always take a serious view of a solicitor who allowed himself to become involved in questionable transactions, which bore all the hallmarks of prime bank instrument fraud and/or money laundering.”

06/10/03 DOGS SNIFF OUT CASH

The Daily Telegraph carries reports of dogs trained to sniff the ink on bank notes being used for the first time on trains to detect criminals carrying large amounts of illicit cash. The "currency dogs" have already been used successfully by Customs and Excise at ports and airports, where they have detected more than £800,000 in mainly drugs cash, and are now being targeted at mainline train routes into London. The aim is to catch couriers travelling into the capital with drugs profits which they plan to "launder" though businesses or financial centres. Questions have been raised over whether the power will infringe civil liberties by affecting those who prefer to deal in large amounts of cash but are not involved in crime. However, those caught with such volumes of cash, even if not criminal, are likely to be investigated by tax authorities. Customs sources said they will only seize cash in cases of £10,000 or more.

03/10/03 THE FIGHT AGAINST MONEY LAUNDERING IS CURRENT AND TRULY INTERNATIONAL

A yahoo search on money laundering reveals how truly international the fight has become. The links below are to articles on money laundering that appeared on the first page of a yahoo search on just one day.

Steve Hancock, of Prudential, added that current anti-money laundering legislation is 'clogging up the system' and wasting valuable crime detection resources.

With Government following an EEC Directive on implementation of an anti-money laundering regime, it will be some time before further legislation is passed that will make the law precisely fit UK requirements, until then we must accept that some elements will have a contrary effect to that which is intended.

01/10/03 FORMER ENGLISH SOLICITOR SENTENCED

Andrew Warren, a former English solicitor, last week was sentenced in New York to between 20 months and five years. He had pleaded guilty to charges of enterprise corruption. While the charge was not of money laundering itself, nevertheless money laundering offences were involved as they were the basis for his extradition.

It is hard to think of any crime involving money where the authorities will not have ammunition from the anti-money laundering arsenal available.

30/09/03 A FORLORN HOPE

According to the Business Software Alliance (BSA), the high margins involved in software piracy are even greater than with drugs and so the practice is often used as a profitable way of laundering money from other more serious crimes.

Users may think they are getting a bargain on an item of software but the BSA hope that if they stopped to think about the ramifications of that purchase it might make them reconsider.

Unfortunately that probably is a forlorn hope.

29/09/03 NEWSFLASH - NEWSFLASH - NEWSFLASH

Enquiry of the Treasury as to the date of publication of the Money Laundering Regulations 2003 has resulted in the following information, we quote their e-mail:

“As you are aware parliament is in recess at the moment however the minister responsible for the money laundering regulations will sign the regulations in the coming weeks….”

We believe that the Regulations will be signed shortly after Parliament resumes on 14th October. You will then have 3 months in which to deal with such matters as your office manual and staff training.

29/09/03 THE SUNDAY TELEGRAPH WAKES UP

The Money page of yesterday's Sunday Telegraph has the headline SOLICITORS MUST 'SHOP' SUSPECTED TAX DODGERS. They correctly report as news laws that have been in force since February of this year. The problem facing solicitors, accountants and a very wide range of professionals is that a law with immense effect has be adopted following both worldwide and European recommendations without thought of the impact on our legal system. To give but one example, if a solicitor discovers something suspicious a couple of days prior to the completion of a conveyance he must report it. The matter is then frozen, he cannot complete and he cannot say why. Chaos on the completion date. If the suspicion is subsequently found to be groundless who pays the costs and damages?

27/09/03 ASSET SEIZURE POWERS TO BE STRENGTHENED.

The Financial Action Task Force (FATF) are meeting in Sweden discussing guidance to countries adopting and implementing measures to enable their authorities to seize and confiscate assets. The intention is not only to trace criminals through their dirty money but also to confiscate it or anything that it has been used to buy!

In addition the FATF will also assess the progress made by the 'non-cooperative countries and territories' in the fight against money laundering so that no haven will be safe for criminals or their money.

Great progress is being made by countries listed as being non-cooperative. Israel was recently removed from the list and laws are being enacted across the middle east and Africa in particular.

26/09/03 MONEY LAUNDERING REGULATIONS 2003

H.M. Treasury website still proudly announces that it expects to publish the Money Laundering Regulations 2003 ‘in September.’ The website states that the publication was intended to await the resumption of Parliament.

Parliament is again in recess for the party conferences and resumes on Oct 14th. Our guess is that the publication of the new Regulations will come soon thereafter. We are certain that the Government will still adhere its promise of allowing a 3 month implementation period after publication, so we will looking at mid-January at the earliest for implementation..

Don’t be complacent, you don’t have as much time as may appear. The Xmas break will cut the time available and there will be much to do, not the least being to ensure that you have a proper, up to date, anti-money laundering manual AND you have trained your staff.

25/09/03 G7 STATEMENT

The following is an excerpt from the text of the statement of G7 Finance Ministers and Central Bank Governors issued a short while ago.

“We remain committed to transparency and effective exchange of information between countries as vital weapons in the fight against money laundering and tax evasion. We strongly urge those OECD countries that have not taken necessary steps - in particular in allowing access to bank information - to do so as soon as possible.”

The degree of inter-change of information is probably far greater than money launderers appreciate. At the very minimum full interchange within the EEC should anticipated. The intention is that the criminal and the terrorist will soon have nowhere to hide his finances.

24/09/03 SOLICITORS DISCIPLINARY TRIBUNAL

The Times reports that the Solicitors Disciplinary Tribunal has dealt with an increasing number of cases that involve the use of the solicitor’s client account where no legal transaction has been undertaken, the solicitor simply provided banking facilities. Such conduct may in effect allow a money launderer to use his solicitor as his banker with ‘dirty money’ being cleaned by the respectability of a clients account cheque. The Tribunal has said that solicitors have no business in simply receiving and paying out money with no purpose attached to it and it regards such activity as serious breaches of professional conduct. A new rule is under consideration which will prohibit the receipt of money without instructions.

23/09/03 40 RECOMMENDATIONS OF FATF

The NCIS has published details of what it considers good practice on the part of a legal advisor who is advising a client in relation to a matter that might involve a suspicious financial arrangement. In the same way as we are publishing the 40 Recommendations of FATF in bite size pieces, we shall similarly publish a precise of the NCIS views.

Recommendation 3. Should a concern arise in relation to a prospective financial arrangement then the legal advisor should learn sufficient about the client and the source (or final destination) of any funds involved in the arrangement, including as necessary seeking information from the legal advisors, if any, on the other side.

To see other NCIS recommendations that have previously been reported simply search back through our archive.

22/09/03 40 RECOMMENDATIONS OF FATF

19/09/03 SOFTWARE TO COMBAT MONEY LAUNDERING

During the last two years almost half of the world's top 20 banks have adopted artificial intelligent software as a means of combating money laundering. In the past the complexity of the money laundering problem was considered too hard for systems to solve, so banks had used rules systems eg "Report all cash transactions over £10,000." Now the new intelligent systems use adaptive software to learn the individual characteristics of a customer so as to be able to spot something suspicious. "The Sentinel is like an electronic employee. It understands context and can deal with scale operating over tens of millions of transaction per day" says Mark Greene, Global GM of Banking at IBM.

Potential money launderers beware, the world is becoming an ever more dangerous place for you, and we, the professionals must be ever more vigilant; who knows what enquiry has been triggered by the bank, if you do not have all of your systems in place you may find yourself inadvertently caught in a net cast to catch your client.

18/09/03 FINANCING TERRORISM

FATF (the Financial Action Task Force) and the publisher of the 40 RULES has published a news release. The main body of the news release can be found at http://www1.oecd.org/fatf/#Releases but in a nutshell it says that “Terrorism and its financing pose serious threats to national, regional and international stability and economic growth. Countering this threat requires a swift and coordinated approach.” In order to assist countries in implementing effective measures to combat the financing of terrorism, the FATF, in addition to its well known 40 RECOMMENDATIONS is devising a robust mechanism to freeze and confiscate the assets of terrorists.

The problem that we all will then face is that of Governments implementing the mechanism and rather than using it solely against terrorism, will use it as a general tool thereby eroding individuals rights. We had an example a few days ago. There was an arms sales fair held in docklands. As one would expect there were demonstrations objecting. Whether one agrees with the demonstrators or not, they had the right to legitimately demonstrate yet anti-terrorist legislation was used against them!

17/09/03 NCIS GOOD PRACTICE GUIDE

16/09/03 ENRON

Ben Glisan, the first ENRON defendant, has been sentenced to five years in prison after pleading guilty to criminal conspiracy on a 109-count indictment against him and his former boss, the Enron chief financial officer, Andrew Fastow. Glisan, had stringently maintained his innocence in the face of charges which inevitably these days included money laundering.

The inevitability of a money laundering charge arises as on a plea or finding of guilty to any offence involving money, any handling of the proceeds of the crime amounts to a money laundering offence over and above the principal crime.

15/09/03 40 RECOMMENDATIONS OF FATF

12/09/03 MONEY LAUNDERING LAW ABROAD

A Canadian Lawyer and Mortgage Specialist, Martin G. Chambers has been found guilty of five charges of money laundering of about $700,000. After a three-week trial, Chambers was convicted of all five charges and faces a maximum of 20 years imprisonment on each of the money laundering counts.

And we thought our maximum penalty of 14 years for the most serious of money laundering offences was harsh!

Syria has just introduced a new anti money laundering law under which offenders could be jailed for up to a measly six years. The country's central bank unit has been given the power to freeze assets and to file law suits. The new law also penalises those in possession of funds linked to 'terrorism.' We shall refrain from comment and await developments.

11/09/03 TAKING THE PROFITS OUT OF CRIME

Lord Goldsmith, the Attorney General addressing prosecutors and academics from almost 40 countries at a conference on economic crime, said: "The advantages of committing economic crime as opposed to other criminal activity are known to terrorists. Other organised criminals are all too well aware of the costs and benefits viz a viz the risks when compared with other forms of crime.”

He said, "The Proceeds of Crime Act 2002 aims to take the profit out of crime and dismantle and disrupt criminal empires by removing the money that was their motivation and lifeblood."

One of the attorney general's powers is to refer cases, and there can be no doubt that if there is any question of leniency in future then he will use that power.

10/09/03 NORTHERN CYPRUS

Northern Cyprus is regarded as the perfect criminal hideaway because it is recognised by no country other than Turkey. It therefore has no extradition treaty with the UK and the result is that many criminals seek refuge there both personally and for their ill-gotten gains. Last month Stanley Rankin, who boasted that he was one of Britain's "three most wanted men", was shot dead there and at his funeral the chaplain described him as a "lovable rogue who was generous to a fault when the money was there." During his life Rankin is reported to have said he loved Northern Cyprus because it offered "so many cigarette smuggling and money laundering opportunities."

Any professional dealing with money coming from or even going to Northern Cyprus should be on his guard and ensure that he has performed full client and matter due diligence and is absolutely satisfied that he is in no way involved in money laundering.

09/09/03 .

A host of former Page Three girls are to lift the lid on the pitfalls of going topless in the tabloids in a warts-and-all documentary on five. They list all sorts of problems but one, Tracy Kirby, explains how she spent two years in Holloway prison after being duped in a money laundering scam by drug smugglers.

What at shame that CPD points aren't available for this area of research.

08/09/03 .

The NCIS (National Criminal Intelligence Service) last week published a disclosure template to run under Microsoft Word. Instructions on how to download the form so that it will run with all appropriate macro's can be found at:

http://www.ncis.co.uk/disclosure.asp

In addition to the form being available on systems for ready use, a hard copy should be included in your office manual.

05/09/03 .

Today's news media is full of reports that Police have seized $6 billion (3.8 billion pounds) worth of suspected U.S. bonds after smashing a major international drug-trafficking ring. If the bonds are real then the Assets Recovery Agency will have a field day. The knock on effects will be felt far beyond the fact of the arrests and seizures alone. Do not be surprised if a large sum is ear marked to re-inforce anti-money laundering/asset seizure resources.

Perhaps the side of the angels will, for once, benefit from the proceeds of crime.

04/09/03 .

Anyone who believes that they can hide 'dirty money' money in a Swiss account is in for a shock. A spokesman for the Swiss Central Bank said recently "We must energetically reject the perception that the Swiss financial community is only interested in harbouring money that needs to be cleaned."

To underline his comments he confirmed that some Swiss bank accounts have been frozen in the recent past. He added that this may show that some mistakes had been made, but it also demonstrates that controls are effective.

03/09/03 .

H.M.Treasury will publish the Money Laundering Regulations 2003 very shortly after Parliament resumes on 8th September. Notice will be give on the Treasury web site dedicated to money laundering - http://www.hm-treasury.gov.uk/Documents/Financial_Services/money/fin_money_index.cfm

Alternatively book mark this page - we will bring you the news as soon as possible.

02/09/03 .

The National Criminal Intelligence Service (NCIS) have issued a position paper intended to clarify elements of the law. Instead they have appeared to have muddied the waters. The law simply is that where a solicitor suspects that investigators may be looking into something affecting a client then the solicitor must not disclose that suspicion to his client, BUT there is a defence where the disclosure is in ‘connection with legal proceedings.’ The defence is not available if the disclosure is ‘with the intention of furthering a criminal purpose.’ In its position paper NCIS states that it takes the view that the solicitor does not ‘have to share or be a party to this intention.’

This is a truely draconian interpretation. It means that where the solicitor has been fooled by the money launderers, the solicitor will remain liable to prosecution. Mens rea is a concept that all prosecutors wish to eradicate – it appears that they may be getting their way.

01/09/03 .

The Financial Action Task Force on Money Laundering (FATF) has spearheaded the effort to adopt and implement measures designed to counter the use of the financial system by criminals. They have published 40 recommendations which are being adopted by Governments universally. The recommendations are long and complex. Over the next few weeks we shall publish extracts. The full version can be found at http://www1.oecd.org/fatf/#Fraud%20Warning.

RULE 3. Countries should adopt measures to enable their competent authorities to confiscate property laundered, proceeds from money laundering, instrumentalities used in or intended for use in the commission of these offences, or property of corresponding value, without prejudicing the rights of bona fide third parties.

Such measures should include the authority to: (a) identify, trace and evaluate property which is subject to confiscation; (b) carry out provisional measures, such as freezing and seizing, to prevent any dealing, transfer or disposal of such property; (c) take steps that will prevent or void actions that prejudice the State’s ability to recover property that is subject to confiscation; and (d) take any appropriate investigative measures.

In the UK we have the assets seizure agency who in bringing proceedings for confiscation only have to show that the seized asset was the result of money laundering to the level of the civil test (balance of probabilities); they do not have to bring conclusive evidence.

28/08/03 .

The Treasury is continuing work on the proposed Money Laundering Regulations 2003 and it is expected that the Regulations will be laid soon after Parliament returns from summer recess in September. The delay in implementing the Second EC Money Laundering Directive has been caused by extra work following the public consultation as set out in the Treasury announcement of 29th April 2003.

They appreciate that there are conflicting interests, with some stakeholders expressing a wish for the Regulations to be finalised as soon as possible, and others seeking more time. There is a balance to be made between implementing the Directive and making sure that that implementation is correct. As previously announced, the Treasury will allow a period of three months from laying the Regulations until they come into force for businesses to prepare properly".

The summer recess ends on the 8th September.

27/08/03 .

It is reported that former Russian media tycoon Vladimir Gusinsky, wanted by Moscow for alleged multi-million dollar (euro) fraud, was arrested at Athens airport last Saturday on an international warrant issued by Interpol. The charges include one of money laundering. Once again the news reveals the every widening circle of criminals that fall into the net of money laundering. He may have committed a fraud (we do not know) but with increasing inevitability money laundering charges are involved and ultimately the net will also encompass anyone who has assisted the laundering process.

As an aside: we all talk and deplore the so called compensation culture in which we live - but does it really exist to the extent to which we think? The Department of Work and Pensions last month revealed that between 2000/2001 and 2002/2003, the number of disease claims fell by 26 per cent and employers' liability claims went down by 16 per cent, but we all know that there are statistics, statistics and lies!

26/08/03 .

The Financial Action Task Force on Money Laundering (FATF) has spearheaded the effort to adopt and implement measures designed to counter the use of the financial system by criminals. They have published 40 recommendations which are being adopted by Governments universally. The recommendations are long and complex. Over the next few weeks we shall publish extracts. The full version can be found at http://www1.oecd.org/fatf/#Fraud%20Warning.

RULE 2: Countries should ensure that the intent and knowledge required to prove the offence of money laundering is consistent with the standards set forth in the Vienna and Palermo Conventions, including the concept that such mental state may be inferred from objective factual circumstances AND that criminal liability should apply to legal persons. This should not preclude parallel criminal, civil or administrative proceedings with respect to legal persons in countries in which such forms of liability are available. Legal persons should be subject to effective, proportionate and dissuasive sanctions. Such measures should be without prejudice to the criminal liability of individuals.

Clearly all advisers (legal persons) are specifically on notice that they are targets.

22/08/03

The National Criminal Intelligence Service (NCIS) has published its threat assessment report on crime. The law enforcement authorities, which cooperated on the compilation of the report, said the most significant threats to the UK are:

Drugs trafficking Organised immigration crime Fraud Money laundering Possession and use of firearms Hi-tech crime Sex offences

Money laundering is right up there with the worst of the worst, yet is a crime that did not even exist when we were children.

21/08/03

Some money laundering stories are so bizarre that they border on the realms of farce. As reputable a news agency as Reuters reports that some 9,200 crocodiles and 100,000 catfish were among items seized by authorities in Thailand as having been used by criminals to launder illicit wealth through legitimate trade.

Be ready to snap up some bargains in coming Government auctions of seized assets!

20/08/03

The Financial Services Authority (FSA) has published a Discussion Paper on its money laundering regime aimed at stimulating debate on two important anti-money laundering controls: ‘Know Your Customer’ (KYC) which relates to obtaining and using information about a customer for anti-money laundering purposes; and Anti-money laundering monitoring, which looks at how a customer is using a firm’s products and services and how this may point to possible money laundering. The paper, ‘Reducing money laundering risk – Know Your Customer and anti-money laundering monitoring’, has been prompted by the FSA’s desire to ensure that the regime is as efficient as it can be for regulated firms. The full text of the paper can be found at http://www.fsa.gov.uk/pubs/discussion/22/

19/08/03

18/08/03

A major source of information on anti-money laundering is the Financial Action Task Force on Money Laundering. Their website can be found at http://www1.oecd.org/fatf/#Fraud%20Warning. Since its creation the FATF has spearheaded the effort to adopt and implement measures designed to counter the use of the financial system by criminals. It established a series of FATF Recommendations in 1990 that sets out the basic framework for anti-money laundering efforts and are intended to be of universal application. Those recommendations are the foundation of current law and have been constantly updated. The latest set was published in June of this year and is an absolute must for any firm's money laundering officer.

15/08/03

More evidence of banks reporting their clients for money laundering emerged when ABN AMRO Bank subsiduary, K&H Bank (Kereskedelmi és Hitelbank Rt.) the Hungarian shareholder of K&H Equities filed a criminal report based on suspicions of money laundering. The Bank says its move is based on the recent findings of the internal audit conducted at K&H Equities. They, like your firm and ours, must constantly have client due diligence under consideration.

14/08/03

Yesterday the news was full of the arrest of an arms dealer following a sting operation carried out jointly by US and Russian intelligence. Indian-born Hekmat Lakhani who comes from North London is accused of attempting to provide material support for terrorism . A second man, Moinuddeen Ahmed Hameed, also appeared before the Court to face charges of running an unlicensed money transmitting business in New York and a third man American, Yehuda Abraham, was also remanded on money-laundering charges in a Manhattan court. Money laundering and asset seizure will feature in every aspect of the case. Not only is it a tool to detect crime but it will be used to confiscate the proceeds of crime. ALL GOVERNMENTS ARE DETERMINED THAT CRIME WILL NOT PAY.

13/08/03

Ex-president Arnoldo Aleman of Nicaragua has been jailed on embezzlement charges. The Country's chief prosecutor has announced that the ex-president also faces money-laundering charges in the United States. Aleman, 57, has been under house arrest since December 12, accused of helping embezzle nearly 100 million dollars of government funds during his term as president from 1997 to 2002. The war against crime using money laundering as a prime weapon is universal and no-one has immunity. Money launderers from the highest to the lowest beware.

12/08/03

It has been reported that Inland Revenue Compliance Office (SCO)investigators have now been attached to the National Criminal Intelligence Service (NCIS) to review ALL reports of tax evasion. They can of course issue notice requiring the production of documents and as any accountant will tell you, even if wholly innocent, tax enquiries are always worrying, time consuming and expensive.

11/08/03

On Thursday last the Financial Services Authority (FSA) fined Northern Bank £1,250,000 for breaches of Money Laundering Rules. This was a first offence and the size of the fine demonstrates the importance to which the FSA attaches to preventing money launderers using the legitimate financial system. No money laundering was involved, merely the failure to implement proper and effective know your client due diligence procedures. The MD of the FSA, said: “The FSA has made clear that we expect all financial firms to establish and maintain strong and effective anti-money laundering procedures. Firms that fail to do this significantly increase the risk of criminals misusing the financial system to support their criminal activities as well as failing to meet their legal obligations to prevent money laundering. The steps Northern Bank took to satisfy itself that its customers, particularly business customers, really were who they claimed to be, were inadequate.” BE WARNED – YOU MUST KNOW YOUR CLIENT

16/07/03

The global fight against money laundering grows day by day. Only yesterday the Ukrainian President, Leonid Kuchma called on his country to step up efforts to fight money laundering so that the country can be removed from the international financial blacklist while at the same time Fiji set up a new financial intelligence unit to help fight against money laundering. Closer to home the Isle of Man’s Insurance and Pensions Authority is in talks regarding concerns within the industry over the effect on business of the new anti-money laundering standards. Soon, very soon, there will be nowhere for dirty money to hide.

15/07/03

Money laundering is now being used as an effective weapon against all crime. Reports today are of famous National Basketball Association star Chris Webber, pleading guilty to a lesser charge of perjury following investigation of the improper receipt of $280,000 while he played basketball for Michigan.

15/07/03

It has been announced that the Government is to establish a new task force aimed specifically at money launderers. This was announced following a report by accountancy firm KPMG which stated that the Suspicious Activity Reports (SARs) are growing in number. The National Crime Information Service (NCIS) predicts that the number of SARs will leap to 100,000 this year.

15/07/03

700 lawyers of the International Bar Association have identified money laundering as the most important area of law to be considered for international standardisation. The report which is expected to be published in a couple of months or so is expected to call for better co-operation between nations.

15/07/03

The threat to solicitors and indeed everyone within the broadened regulated sector has recently been highlighted by the arrest of four solicitors for alleged money laundering. Their arrest highlights the way in which it is likely that most professionals could find themselves in trouble. Investigations of their clients lead to spin-off investigations of the professionals. In this case apparently the arrest of the solicitors followed Operation Norfolk which resulted in the conviction of 11 suppliers of drugs last year.

15/07/03

In the Kaye Tesler & Co lecture and web training site we make the point that all financial organisations are checking all identities including the identity of existing customers. The need for client due diligence was emphasised in a report carried by the FT of a lady receiving a letter from Legal & General which threatened to close her ISA if she did not provide documentary evidence of her identity and address within 30 days. None of us in the professions wish to bother our clients but it is clear that asking for information from existing clients will become commonplace.