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Late law change causes 'mess': the treasury has been criticised for its lack of guidance.

Document Cited in Related
Vincent
AuthorBerens, Camilla
PositionAmendements to Money-Laundering Regulations 2003

An eleventh-hour amendment to the Money-Laundering Regulations 2003 has raised fears that the scope of the legislation could be much wider than first anticipated.

The revised wording widens the law's remit to cover any firm involved in the "provision by way of business of services in relation to the formation, operation or management of a company or trust". This has been interpreted to mean that thousands more firms bill be liable to heavy penalties if they fail to put new anti-laundering safeguards in place.

The Times went so far as to claim that the phrase "provision of services" could be interpreted to cover a whole range of unsuspecting businesses--from advertising agencies to office-cleaning firms. If its interpretation is right, these companies will have little time to prepare before the regulations take effect on 1 March.

David Cafferty, chairman of CIMA's fraud and risk management group, said that this claim was an exaggeration, but he warned that the change could affect small and medium-sized businesses that handled large amounts of cash. "These could include, among others, motor spares retailers, amusement arcades and taxi firms," he said.

The CCAB aims to limit the confusion by issuing its own interpretation of the amendment, but Cafferty believes that the Treasury must now issue its own guidelines.

"The whole thing is a mess," he said. "Nobody is absolutely sure who is going...

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