Am I required to make a Money Laundering Report

Am I required to make a Money Laundering Report

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Hi All

I've been approached by a potential new client to prepare his 2013/14 tax return.  On writing to the previous client, she provided some information in answer to my question is there any reason why I shouldn't accept this engagement (I don't want to divulge the details here).   Without letting the potential client know the previous accountant had responded, he himself volunteered some explanation on the issues with the business.  This ultimately led me to decide to decline the engagement, as I don't think they are willing to take steps to put the issues right. 

I take it I am required to make a Money Laundering Report?

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the sea otter
By memyself-eye
15th Jan 2015 11:34

I wouldn't

You don't know the new client is unwilling to put things right and if the previous accountant was sufficiently concerned, they should have put in an MLR report. Just walk away.

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David Winch
By David Winch
15th Jan 2015 11:34

If, on the basis of information that has come to you in your work in the regulated sector, you know or suspect that a person is (or was) engaged in 'money laundering' then you have an obligation to report it, unless one of the exceptions applies.  [Note a 'person' means an individual or a company or other legal entity (such as a local authority).]

In this case the information apparently did come to you in the course of your work in the regulated sector.

You appear to be saying that the potential client has already obtained a financial benefit (either obtained money or an asset or avoided a liability) as the result of whatever conduct of his is troubling you.

You also appear to suggest that the potential client is aware that he has improperly obtained a benefit from the conduct but refuses to put the matter right.  That indicates dishonesty.

You do not say whether the conduct is illegal (such as tax evasion) or merely immoral (such as selling poor products to customers when better & cheaper ones are available).  Only illegal conduct can give rise to 'money laundering'.

The most relevant exception here is likely to be 'privilege'.  If the potential client asked you for legal advice about putting the matter right then the information you have may be 'privileged' & not reportable.  This only applies if you are a member of a body which meets the criteria of s330(14) PoCA 2002.  But you say the potential client approached you to assist in completing his latest tax return.  That is not a request for legal advice, it is a request for compliance services.  So it looks like 'privilege' does not apply here.

So, in short, yes this does appear to be reportable.

David

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