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European Parliament establishes third money-laundering directive.

CIMA is advising members and students to take heed of a number of changes to money-laundering legislation in the EU.

The European Parliament has approved a third money-laundering directive, which is intended to bring member states' legislation into line with new global standards 011 tackling the crime.

According to the institute, financial managers should be aware that they are particularly affected by a number of issues relating to the directive. These include: the definition of serious crime; the requirement to identify the ultimate beneficial owner of a transaction (which may be hard in the case of a legal entity): and the proper balance between regimes applicable to lawyers and accountants in tax matters.

"The directive takes account of the 40 recommendations of the Financial Action Task Force on Money Laundering," said Martin Nimmo, head of policy and plans in CIMA's professional standards department. "Its effect on UK legislation is likely to be minimal, as current legislation already embraces the requirements. But members and students should be aware of changes under way in the UK that may affect their work--the Serious Organised Crime and Police Act 2005, for example."

This new law sets up the Serious Organised Crime Agency (Soca), which will take over the functions of the National Criminal Intelligence Service and the National Crime Squad. Soca will have the job of preventing and detecting serious organised crime, contributing to the reduction of such crime and mitigating its consequences.

Section 34 of the act imposes a duty to disclose information to Soca. It will operate throughout "the British Islands"--including Northern Ireland, the Channel Islands and the Isle of Man.

Details about the Serious Organised Crime and Police Act 2005 can be found on the Office of Public Sector Information website (www.opsi.gov.uk/acts/acts2005/20050015.htm). General guidelines on money-laundering can be found on the CIMA website (www.cimaglobal.com/aml). The Consultative Committee of Accounting Bodies will publish revised guidelines shortly.
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Publication:Financial Management (UK)
Geographic Code:4E
Date:Oct 1, 2005
Words:325
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