Money Laundering Rant

Jimj40

I'm just in the process of selling a couple of flats which my ex and I bought some years back as a pension scheme and find myself well and truly p****d off by the Money Laundering (Big Brother) Regulations or, more particularly the "go the extra mile" mentality of the legal and accountancy professions.

I involved an accountant early on to ensure that I had all angles covered and was astounded to receive a message that "the money laundering rules mean that I need to ask you for a copy of your passport and a recent utility bill
showing your home address". When I pointed out that actually the rules DIDN'T mean anything of the kind, the reponse was that "The money laundering requirement in fact stems from the advice given by our Institute as best practice. As a firm, we adopt best practice..".

I have now received a similar request from the solicitor, this time also throwing in the Proceeds of Crime Act for good measure. Being incensed by the whole nonsensical situation (and evidently sad to boot) I read the PoC Act and can't find anything relevant there either. However the Law Society has no doubt recommended that its members not only collude in the government's invasion of the citizen's privacy but also go further than required by any reading of the rules, just to cover their fundaments.

The steps necessary to satisfy these "requirements" are hardly onerous, but that is beside the point - freedom is eroded one atom at a time.

Leaving aside the obvious point that most of us would be only too delighted to be in a position to have enough money to launder some, does anyone else find themselves riled by what I regard as more unwarranted government intrusion and the craven attitude of so-called professional bodies?

Woby_Tide

If the boot was on the other foot and you faced the possibilty of a fine or imprisonment for not taking due care and attention in performing some identity checks would you err on the side of caution or just take the easy option and hope you weren't actually about to conduct business with a money launderer?

Jimj40

If I were a professional and hadn't done my due diligence then I would be concerned, in such a theoretical situation.

However, the rules are perfectly clear and to go well beyond the legal requirements is not "due care and attention", in my view, but more a symptom of the "door-mat" attittude towards the government that seems prevalent in this once-freedom-loving country. You may also recall that this is the same govenment which "launders" my tax-dollars by nefarious arms exports, propping up dubious foreign governments and questionable overseas military adventures!

Cook_County

a solicitor has already been jailed for failure to identify persons in exctly these circumstances.

you will not find a single accountant in the UK today who will act without this information...

the Money Laundering Regulations are really quite clear on the point so if you want to deal with accountants, solicitors or estate agents you will have to identify yourself..

WHA

As an accountant, I can assure you that "proof of id" is as much a pain for us as it is for our clients. We have to have documentary evidence on file that we have proof of our client's identity. If we can't show the proof to the regulators when they come to look at our files, we face fines and also face losing our practising certificate. Of course, that "proof" doesn't have to be the same for each client and we actually use our discretion quite a lot, especially where very low sums of money are involved. But, if a new client came in to see me without any previous dealings and wanted advice on relatively large transactions, such as property dealings, I would not act without having very good proof identity. Remember, the law and regulations don't kick in when it is found that someone has been using fraudulent ID, the offence for professionals is not checking - whether or not there has been fraudulent activity. What makes it worse is that the fines professionals face are probably higher than whatever punishment would be given to the fraudster if they were convicted!

Jimj40

Cook_County wrote:

the Money Laundering Regulations are really quite clear on the point ...

That is very true! And they cover the situation where:

"any arrangement the purpose of which is to facilitate the carrying out of transactions on a frequent, habitual or regular basis where the total amount of any payments to be made by any person to any other in the course of the arrangement is not known or capable of being ascertained at the outset",

(the accountants, in this case) "know or suspect that the transaction involves money laundering"

and/or "payment of 15,000 euro or more is to be made"

Prima facie the accountant is not covered, especially for a one-off bit of advice. The solicitor certainly has a better case, although the only amount over 15,000 euros involved is the purchase price, so if the money is paid direct by the buyer to me then that test would appear to fail also (I certainly accept that that is a moot point, however). Interestingly, if I were to be acting as an agent for a 3rd party then only unspecified "reasonable" measures need to be taken to identify that person or persons.

My underlying point is more fundamental, however - when did we lose our nerve and start letting Nanny decide that all of us being ripped off by big business is acceptable but that the tax man being ripped off by (comparatively) petty criminals is a no-no?

Anyway, I'm sure we all have better things to do than listen to a cantankerous old git like me waffling on and on

Twopints

I thought the purpose of the Money Laundering Regulations was to prevent / detect crime not revenue raising.

The estimated annual proceeds from crime in the UK is £25billion (NCIS) and the preferred form for those proceeds is cash. The crim then has the problem of converting/disposing of that cash in a way that is not detectable.

Property purchase is the most popular method (one in three criminal gangs said that their cats preferred it ) so I would expect a degree of focus on transactions in this area. Clearly, in order to monitor suspicious transactions there needs to be a mechanism in place to report them.

I think this is probably a good thing.

However, some institutions / individuals are just applying a blanket approach to the "evidence of identity" bit of the process

Somerset

I bought a house nearly two years ago. My solicitor also wanted a copy of my passport, driving licence & utility bill. He also wanted proof of where the funds to purchase were coming from, and took copies of the mortgage offer. He was very apologetic and seemed to think it was OTT himself, but said he had to comply with legislation. Their practice had also taken advice from their professional body.
I was a bit taken aback by all of this. I personallyfound it intrusive. But if that's what I had to do, then I'd jump through whatever hoops I had to.

seabiscuit_2

im having problems producing the relevant id atm - no passport, driving licence in maiden name, in wrong address (have never got round to getting it updated - i know i know - dont start - its a long story why), and my birth certificate is also obviously in my maiden name, and my wedding cert is obviously not good enough for them as they never ask or want to see it

Ember999

We are going through a house purchase at the moment and I am a bit concerned. My husband does not drive (so no driving license) and he doesn't have a passport. All utility bills are in my name apart from Council tax which has both names on. What ID can he use that will pass the Indentity Checks with Mortgage Company (Northern Rock) and Solicitors (Scottish Solicitors)? Is this going to be a problem for him? Any help please...

Jimj40

If it's any help to those others jumping through these hoops at the moment, the proofs of id asked for so far ar:

Estate Agent - nothing
Solicitor - passport and bank statement. Just to underline the idiocy of the whole thing, the solicitor states

"The bank statements (even though he only only wants 1!) have a twofold effect:

1 Proof of address

2 Confirmation that all monies are being provided from your own resources."

And here was me hoping that the purchaser was going to provide the money!! Shows how out of touch I am....

However, if one were doing one's own conveyancing, of course, then the provisions of the Regulations would not apply.... :shhh: