Bill clamps down on money laundering

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BANKERS or accountants will be committing a criminal offence by failing to report knowledge, or suspicion, of drug money laundering under a Criminal Justice Bill published yesterday.

The Bill will also make it an offence to prejudice a money laundering investigation by tipping off anyone - including newspapers - to the fact that the police are on the trail. There will also be a new offence of possessing or using the proceeds of drug trafficking.

The biggest change in this area is to extend money laundering offences to the proceeds of all types of crime.

On fraud, the Bill will make it easier to tackle international crimes by making prosecution possible where the final act takes place overseas. But much of the criminal activity and planning will still have to take place in the UK, so the new provisions do not involve the same degree of extra-territorial powers as similar US legislation.

In the City, the Bill will replace current insider-dealing legislation to bring it into line with European Community directives. For the first time, it will be an offence to trade in government bonds on the basis of inside information about interest rate policy.

In a rare and significant move in criminal cases, the new legislation makes it much easier for the the prosecution to confiscate the assets of drug traffickers.

No longer will a convicted drug smuggler merely have to cast doubt on prosecution claims that his or her belongings are proceeds of crime; there will be a greater onus to prove they were legitimately acquired.

The decision to apply a lesser civil standard of proof relying on the balance of probabilities rather than the criminal standard of 'beyond reasonable doubt' was taken because post-trial confiscation hearings have often proved protracted, costly and fruitless for the prosecution. But the change has been criticised by defence lawyers as an erosion of fundamental rights.

Insider dealing proposals, page 15