Praise on anti-money laundering efforts

Scottish solicitors have been praised for their efforts to combat money laundering - a crime recently ranked by lawyers from around the world as the most important area of law for international standardisation.

Vincent Harvey, Director of the National Criminal Intelligence Service’s (NCIS) Economic Crime Branch reported there had been an increased number of disclosures from Scottish Solicitors since the inception of the money laundering part of the Proceeds of Crime Act 2002 in February this year and that the overall quality of these reports was encouraging.

“I am grateful for the level of support shown by the Law Society of Scotland Chief Accountant, Les Cumming and his team in assisting Scottish solicitors to deal with the new legislation. NCIS is pleased to support a number of Society initiatives and is committed to continue to work together in this important area,” Mr Harvey said.

The Law Society of Scotland has presented a series of roadshows around Scotland in conjunction with the NCIS detailing the recent developments in anti-money laundering legislation. The Society is also running a one-year e-learning course which provides background information on terrorist money and the proceeds of crime and gives solicitors an insight into the processes and mechanisms used to launder money. Further information can be found on the Society’s website at www.lawscot.org.uk.

Chief Accountant of the Society, Les Cumming, said: “Solicitors have responded positively to the new requirements and the number of disclosures relating to money laundering crimes has increased in 2003. We want to ensure that Scottish solicitors remain up-to-date with the changes and are able to identify suspicious instructions and transactions and act accordingly in those instances.

“It is essential that solicitors be able to recognise the signs of these suspicious activities, not just in fulfilling their role in the global fight against money laundering, but for the implications it could have on their own career. All legal practices are at risk of being exploited by criminals to hold or convert the proceeds of their crimes,” Mr Cumming said.

Careful presentation of reports can assist both NCIS and solicitors, especially if “appropriate consent” in accordance with section 335 of POCA is necessary for the case to continue. A firm’s Money Laundering Reporting Office will usually be the appropriate person to make a report and deal with any subsequent contact from NCIS or a law enforcement agency.

The following checklist has been prepared for Scottish solicitors based on guidance provided by the Law Society of England and Wales to its members, developed in conjunction with NCIS.

Helpful reporting tips are:

• The Duty Desk of the Economic Crime Branch cannot give advice about whether the legislation requires reports in any given situation. Solicitors worried about their obligations should obtain general guidance from Bruce Ritchie, Director of Professional Practice (0131 476 8124) or seek specialist legal advice;
• Reports must be made to the Duty Desk at the Economic Crime Branch of the NCIS in writing, not over the telephone. Reports can be posted or faxed to the Economic Crime Branch; the National Criminal Intelligence Service, Economic Crime Unit, P O Box 8000, London SE1 5EN, fax number 020 7328 8286;
• It is helpful to telephone the NCIS duty desk to let them know that a disclosure is about to be made and the basis for the disclosure. This can be particularly helpful where solicitors are seeking “appropriate consent”;
• If a solicitor wishes to continue to act in a matter and so requires “appropriate consent” under section 335 of POCA, this should be made clear early on in the report itself. It would also be prudent to make this clear on a fax header sheet. This is particularly important where appropriate consent is required earlier than the end of the notice period (7 working days starting the day after a report has been made). Clear information about any timetable should also be included, e.g. completion date for a conveyance, or a court deadline. It can also be helpful to provide the NCIS with an explanation of the relevant legal process;
• Reports can be made by letter or by using the NCIS standardised reporting form, available from www.ncis.co.uk/disclosure.asp. Typing reports can help with legibility, and therefore speed of response;
• Reports should include as much information as possible about the suspected person or organisation, e.g. full name, address, telephone numbers, passport details, date of birth;
• Persons making reports should also include their own contact details;
• NCIS has been known to reject reports in which a reason for suspicion has not been provided. In explaining reasons for suspicion you may include an explanation of the background to the retainer, making it clear who the suspected person or organisation is, and why there are suspicions surrounding them. Taking time to set out clear reasons should help the NCIS respond more quickly;
• It is not necessary, or always possible, to provide details about the underlying criminal behaviour that leads to the dirty money or property. However, if there are suspicions about a certain type of criminal activity, these can be included in the reasons for suspicion section;
• If known, providing details of any account in which suspected funds are currently held, or description of the criminal property and estimated value, can be helpful. The suspected funds may be held in a solicitor’s own client account;
• If relevant, include in reports why the confidentiality of the reporting party, and/or the contents of the report itself, is important. If you fear reprisals of any type if the information were to be revealed, explain why;
• It is inappropriate to include general comments about the money laundering legislation in reports;
• Firms who anticipate making over 200 reports per annum may like to consider subscribing to the NCIS Moneyweb IT system which allows reports to be submitted electronically. Further details about Moneyweb can be obtained from the NCIS Moneyweb team via 020 7238 8280/2888/3691;
• A compulsory reporting form specifically designed for use by solicitors may be introduced by the Treasury. If so it will be available from the NCIS and Law Society of Scotland websites following the launch publicity.

Further information on disclosures by the legal profession can be found on the NCIS website at www.ncis.co.uk/legaldisclosures.asp