Does the Italian Tax Amnesty create problems for UK MLROs? Part II

The AML Watchman’s view: I think that, in this hypothetical question, you would have to make an SAR to the UK’s SOCA and possibly even a consent request. My thought process is outlined below. But I’d love to hear what you would do and why? That is what the comment box below is for.

Why? Well unless the client came to you to regularise their entire tax affairs under the limited legal professional privilege (LPP), when you and your firm might be able to take advantage of legal professional privilege, you may want to consider whether or not you and your firm were being used to maintain possible criminal activity by not reporting the balance of the clients fund or activity.

How would you know whether the rest of the funds were legitimately obtained? The overseas reporting exception might not work. In this case although the Italian Government appears to have addresses the false book-keeping crime how could you know what other criminal infractions may have been committed in order to get the funds to your firm originally? So unless you are willing to expend a possibly huge amount in Enhanced Due Diligence and legal opinion the only way to be sure to manage your personal legal liability under PoCA, would be to disclose to SOCA.

Why might consent be required? The mention of organised criminals taking advantage of the Tax Amnesty should put you on warning that this possibility, no matter how slight, that a connection between a criminal gang and your client might exist. The only people who should know this should be SOCA and their law enforcement contacts. Giving them the opportunity to disrupt such a payment should, hypothetically address your liabilities under PoCA. If, however, a client were to ask your firm to organise or to effect a transfer toward the end of the amnesty period but the consent request then takes longer to process than the closing date of the Amnesty, then it’s a yippee skip round the Christmas Tree event for the lawyers.

Just a thought.

Anyway, over to you.

Does the Italian Tax Amnesty create problems for UK MLROs? Part I

Here is an interesting conundrum re Suspicious Activity Reporting (SAR) and the 3rd EU AML Directive. The highlighted Bloomberg article outlines the confluence of a Tax Amnesty, Money Laundering, Tax Evasion, the bank induced recession and the law of unintended consequences.

This proposed Tax Amnesty law was approved by the Italian Government on 2nd October 2009 (see BBC article: http://news.bbc.co.uk/1/hi/world/europe/8288185.stm) and it poses an interesting challenge to UK AML regulated MLRO’s and firms.

Here is a hypothetical question for you which may highlight why. An existing client, probably with an Italian connection, wants to repatriate funds / financially convertible assets to Italy. Your routine monitoring of transactions illicits an admission that your client wants to take advantage of the announced amnesty. Under UK AML regulation and law, where does that leave you and your personal reporting obligation?

Well I’ve got a view (it’s Part II ) but I’d love to hear what you would do and why?

SOCA Belfast Payback Conference: 22nd Sept 2009

Image via Wikipedia

"The best things in life are free" which in this case extends to the series of conferences being organised round the UK by the Serious Organised Crime Agency (SOCA) under the Payback banner.

Well the next one is going to be held in Belfast on the 22nd September 2009 and if they still have places and you can make the time then my advice is simple.

GO!

Here is the link to the SOCA website. http://www.soca.gov.uk/assessPublications/downloads/BelfastNIConference.pdf

I attended one earlier this year and I have to say that it was very well done. Not only was it an excellent opportunity to network but it also gave an overview of what has been going on, best practice and it gave people a great chance to ask questions!

So what are you waiting for?

A literal launderer. Nicked & convicted.

A London based cannabis dealer seems to have taken money laundering a little to literally when he used a washing machine to conceal his cash!

According to a press report in the Independent Newspaper (25th August 2009) Karim Bernia was sentenced to 4 1/2 years in jail for attempting to smuggle the cash from his drugs operation back to his native Morocco. Having hollowed out the innards of a washing machine he then stuffed black bags containing nearly £600,000 in the machine with a further £85,000 in the front for good measure. Fortunately the van carrying this loot this was discovered at Dover and the operation was traced backed to him.

IMHO, this is what cash seizure laws shouild be aimed at. So, well done people!