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Know your client – Home Office targets professional advisers with tougher organised crime laws

City law firms may face increased red tape when accepting new clients onto their books after the Home Office today (3 June) unveiled plans to bolster legislative powers to imprison solicitors, accountants and others who suspect that their client is linked to organised crime.

A serious crime Bill, expected to be unveiled tomorrow in the Queen’s Speech, will see a new offence of ‘participation in an organised crime group’ to target those who have reason to suspect their client is part of an illegal enterprise and do not act accordingly.

Firms will need to prove there were no reasonable grounds to suspect they were assisting criminals in their activities, after the Home Office said too many people are aiding criminals by failing to ask appropriate questions at the outset.

The Bill will also introduce tougher measures to seize assets obtained as a result of criminal activity.

While City firms are already obliged to conduct extensive money laundering checks – with money laundering offences already carrying a 14-year prison sentence – the new legislation is likely to add to the burden of leaving a paper trail showing that sufficient checks were carried out at the outset of a matter to establish whether a client is engaged in legitimate business.

Roger Best, regulatory, enforcement and white collar crime partner at Clifford Chance said: ‘City law firms are already very wary about who we take on as clients but I would expect there to be an impact in terms of being able to demonstrate that we have conducted thorough due diligence and have made adequate enquiries.’

Home Office minister Karen Bradley said: ‘Nobody is above the law. But for too long corrupt lawyers, accountants and other professionals have tried to evade justice by hiding behind a veneer of respectability.

‘This new offence sends out a clear message to those individuals – if you are helping to oil the wheels of organised crime, you will be prosecuted and face being jailed.’