- Being a member
- CIMA Professional Development
- Members in Practice
- Members' Handbook
- Global alliances
- Money laundering regulations
- Anti money laundering guidance
- Registering for supervision
- Registering with CIMA
- How supervision will take place
- HMRC and anti-money laundering supervision
- Customer due diligence
- PEPs and enhanced due diligence
- Keeping records
- Suspicious activity reporting to SOCA
- Forty recommendations of the Financial Action Task Force
- Risk based approach to anti-money laundering
- Reliance on other professionals' CDD
- Professional clearance letters
- TCSPs
- Regulation of TCSPs
- Phishing
- Legal professional privilege
- Practising accountants who leave CIMA
- Regulations for Channel Islands and Isle of Man
- Legislation in the Irish Republic
- Equivalent countries for anti money laundering procedures
Legal professional privilege
Under the UK's Proceeds of Crime Act (POCA) and Money Laundering Regulations 2007 (MLR 2007), the courts regard the client's right to confidentiality with a legal adviser under so-called professional privilege as fundamental to the right of access to legal advice. Apart from lawyers, only patent agents, trademark agents and licensed conveyancers had previously been granted such privilege.
After representation, this right of professional privilege has been extended to accountants (not just auditors) and tax advisers with regard to money laundering only. To qualify, tax advisers must be members of appropriate professional bodies, referred to as 'relevant professional advisers'. These advisers now include members of the CCAB bodies, including CIMA.
'Professional privilege relates to information communicated by a client or his representative in connection with the giving of legal advice or in connection with legal proceedings or contemplated legal proceedings, but does not apply to information communicated with the intention of furthering a criminal purpose (including laundering money).'
(Law Society of England and Wales)
The following information is covered under legal professional privilege:
- advice on the interpretation or application of any element of taxation law
- advice on the legal aspects of a takeover bid (eg under the Companies Act legislation)
- advice on the duties of directors under the Companies Act
- advice to directors on the legal issues relating to the Insolvency Act 1986, for example, on the legal aspects of wrongful trading (this is not an area in which CIMA members should involve themselves, as they are not licensed insolvency practitioners)
- advice on employment law.
Legal professional privilege normally applies when a client is either unwittingly involved or not directly involved in money laundering, and requires advice from a legal adviser in an accounting or taxation context. Advice may be given and the accountant is not required to report to SOCA about the client.
Exemption from making a money laundering report does not apply where the services provided will or may be used to further a criminal purpose. However this 'crime/fraud' exception is complex and further legal advice should be sought before a decision is made. You are also referred to the section 7 of the CCAB guidelines, which deals more exhaustively with the question of legal professional privilege.