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Last Updated: Monday, 1 March, 2004, 04:53 GMT
New rules tackle money laundering
Cash - generic
Some firms ignored fraud fearing repercussions for reporting it
People buying expensive items could find themselves under extra scrutiny from Monday as new money laundering rules come into force.

People who want to pay more than 10,000 in cash for an item must go through extra checks to prove who they are.

Professionals like accountants who deal with company finances could face prison if they fail to report anomalies.

The extension to the Proceeds of Crime Act will now encompass more sectors, like casinos and estate agents.

Tough response

The National Criminal Intelligence Service (NCIS) estimates that up to 25bn per year is laundered through the UK.

To try to crack down on the practice new rules are being brought in across Europe.

Firms including solicitors, accountants and estate agents will face greater scrutiny, with the staff having to note and report any suspicious activity to the NCIS.

Workers risk prosecution if they do not report suspicious transactions that indicate fraudulent activity.

Most frauds are not reported because companies are worried about damaging their reputation. Criminals exploit this.
Steven Philippsohn

They are not allowed to tell clients they have reported them.

Steven Philippsohn, a money laundering expert with legal firm Philippsohn Crawfords Berwald, said: "At present only 25% of frauds are reported in the UK because companies are worried about the damage reporting such crimes can do to their reputation, and criminals exploit this.

"As of Monday, UK firms can't sweep money laundering under the carpet," he added.

People who don't obey the new rules could be fined or sent to prison for up to five years.


SEE ALSO:
Major fraud hits 'record level'
26 Jan 04  |  Scotland
Fraud cases at record high
28 Jul 03  |  Scotland
Scots back whistle-blowers
05 Sep 02  |  Scotland
Major fraud 'on the increase'
29 Jul 02  |  Scotland
Sharp rise in company fraud
27 Jul 01  |  Scotland


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