The Law Society has won European Commission backing in its war against draft money laundering regulations, forcing the Treasury into a rethink.
The society sought help from European Commissioner Charlie McCreevey to convince the Treasury that it does not need domestic regulations that transpose verbatim the definition of ‘beneficial ownership’ from the European Directive, which has been the principal focus of opposition from City firms.
In a letter to the Law Society sent on Friday 1 June, McCreevey said the UK does not need to copy a European Community directive directly when transposing it into national law, emphasising that the essence of a directive is that it can be adapted to fit a national legal framework.
Law Society president Fiona Woolf said: “The Treasury can now get the UK regime right and we’re grateful for the commissioner’s support on this point. We look forward to working collaboratively with the Treasury – their decision to reconsider is helpful.”
The Third European Money Laundering Directive was adopted by the Commission late last year and must be implemented into UK law by this December.
City firms opposed the bill. Linklaters compliance and conflicts consultant Donald Williams warned that the legislation in its present form “will be the UK’s Sarbanes-Oxley” (The Lawyer, 12 March).