Putting accountants on par with lawyers 'will lead to new Enron'

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The Independent Online

Leading lawyers have slammed government plans to relieve accountants of their duty to blow the whistle on money laundering.

Leading lawyers have slammed government plans to relieve accountants of their duty to blow the whistle on money laundering.

The Bar Council, which represents Britain's barristers, said it would be wrong to extend "legal privilege" to tax consultants and accountants.

Legal privilege currently applies only to the legal profession. It means that a lawyer can use his discretion in deciding whether to alert the police if a client is engaged in money laundering.

One partner at a law firm warned that if legal privilege was extended to accountants and tax consultants "it would lead to another Enron". He also criticised the consultation process, which was launched by the Home Office at the beginning of last month.

Consultations usually last 12 weeks, but organisations have only eight weeks to respond to this consultation, which the partner said was being "pushed through".

The Home Office is proposing to amend the current money-laundering regulations because they are not compliant with European Union law, which gives accountants the same legal protection as lawyers.

As the law stands, accountants must report suspicious activity by their clients. Members of the legal profession have only to show that they have exercised their discretion responsibly in deciding whether to alert the authorities. Accountants, it is argued, do not have the legal training to make this judgement.

The Institute of Chartered Accountants in England & Wales supports the proposed changes.

John Cooper, a spokesman for the Bar Council, and a member of its public affairs committee, which is reviewing the consultation, said: "The decision that accountants may not have to disclose something should not be up to them. They should have to disclose everything."

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