KEY COMMENT
| DOI | https://doi.org/10.1108/eb027175 |
| Date | 01 April 1998 |
| Pages | 102-103 |
| Published date | 01 April 1998 |
| Author | C.W. Dickson |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control —
Vol.
2 No. 2
KEY COMMENT
C. W. Dickson
MoneyPolice and other fraud investigators con-
sider that the most important source of raw money
laundering intelligence is that provided by dis-
closures made to the National Criminal Intelli-
gence Service (NCIS) pursuant to, inter alia, the
Criminal Justice Act 1988 and the Drug Traffick-
ing Offences Act 1994.
It is therefore instructive to ask which people
and what institutions make these disclosures.
Unsurprisingly one finds that 49 per cent come
from banks. In my experience, banks have taken
their responsibilities under both the statutes and
the money laundering regulations very seriously,
and have investigated, and continue to invest con-
siderable sums in training their
staff.
One might have assumed that professionals, par-
ticularly solicitors and accountants, would have
adopted at least as responsible an approach as the
banks.
Their percentage of total disclosures must,
however, cast real doubt on such an assumption.
The latest figures from NCIS show that solicitors
were responsible for 1.9 per cent of
all
disclosures;
while disclosures by accountants amounted to a
depressingly small 0.3 per cent of the total. Both
figures are down on the previous year (the figure
for accountants by 40 per cent). The Law Society
and the accountancy bodies share with all other
financial regulators a further 0.2 per cent.
Could it be that the defences of solicitors and
accountants are so well ordered, and their reputa-
tion for probity so unimpeachable, that few money
launderers attempt to make use of their services?
From what I have seen over the last ten years, I
regret to say that this is far from being the case.
Criminals have a growing need for professional
expertise in cleaning up and concealing the pro-
ceeds of their crimes, be these tax evasion, drug
trafficking, or securities fraud. The use of offshore
companies, the skilful-insertion of 'fire breaks', and
the bleaching effect of passing money through a
client account are all facilities which solicitors and
accountants can offer in abundance. The noted
weekly
Accountancy
Age regularly carries an adver-
tisement from an offshore services company in the
Republic of Ireland. This advertisement reads in
part: 'Need an Offshore Company? Rule Number
One...
Do not use an offshore agent in your coun-
try as this will create a file on your offshore
identity in your own country. This is not wise'. I do
not imagine that many readers will have to guess
why this might be thought to be unwise!
How can this situation exist? I regularly see
large numbers of solicitors and accountants attend-
ing money laundering conferences, though
whether some of them are there simply for 'the
points' necessary for continuing professional
development, or to assess the current risk of con-
tinuing to act for some of their more doubtful
clients, is not always clear. Two factors militate in
favour of it continuing. First, the law bases the test
for criminal liability for most money laundering
offences on knowledge or suspicion. 'Knowledge'
effectively requires the facilitator to be knowingly
concerned in the money laundering with the origi-
nal criminal, while 'suspicion' is a very difficult
concept to prove. The courts have held that the
test for suspicion is a subjective one; and that one
person's suspicion does not automatically transfer
to someone else simply by the second person
being informed of the first person's suspicion. The
onus in establishing knowledge or suspicion rest
on the prosecution: see Colle (1992) 95 Cr App R
67.
Secondly, and no doubt in part as a consequence
of the first factor, it has not been prosecutorial
practice in the United Kingdom to pursue the pro-
vider of services as opposed to the original crimi-
nal.
This is in contrast to the approach in most
American prosecutors; and it also contrasts with
successsful civil litigation, based on the doctrine of
constructive trusteeship, against professionals who
have involved themselves in the laundering pro-
cess:
see, for example, Agip
(Africa)
Ltd v
Jackson
(1992) 4 All W R 451.
I make two modest suggestions for tackling this
deplorable state of affairs, one straightforward and
the other requiring legislation. First, the profes-
sional bodies should require each of their member
firms (including sole practitioners) to make an
annual return of the number of money laundering
disclosures that firm has made in the previous
twelve months. Firms have to make annual returns
Page 102
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