The Law Society’s chief executive, Des Hudson, has told a parliamentary committee that solicitors in the UK bear a heavier burden of compliance with anti-money laundering (AML) regulations than their counterparts elsewhere in Europe.

In the first oral session before a House of Lords European home affairs sub-committee on the issue of money laundering and the financing of terrorism, Hudson described as ‘absurd’ the wide definition of criminal property and the greater regulatory costs borne by solicitors in England and Wales.

In its written submission earlier this year, the Law Society pointed out that no detailed cost/benefit analysis has been done into the effectiveness of the Financial Action Task Force’s recommendations, European Directives or the UK anti-money laundering regimes.

Evidence suggests the regulated sector is spending significantly more on compliance than the UK government is recovering in criminal property.

Because of this apparent lack of proportionality, the Law Society recommends that:

  • Governments and international policy agencies develop a framework for assessing the effectiveness of anti-money laundering regimes
  • Governments need to review the effectiveness of their anti-money laundering regimes and look at proportionate ways to reduce the burden on the private sector and to increase the amount of criminal property recovered and criminal activity disrupted.
  • Law enforcement agencies and anti-money laundering policy agencies need to continue to provide the private sector with information about money laundering and terrorist financing. This will help the private sector to understand better the warning signs and to comply with their obligations.

The House of Lords EU committee’s inquiry will look at the role of the EU and member states in global efforts to prevent money laundering and terrorist financing.

To watch Hudson giving evidence go tohttp://www.parliamentlive.tv/Main/VideoPlayer.aspx?meetingId=3597