UK unprepared for cash rules
Majority of UK directors not complying with money-laundering legislation
Nearly two-thirds of UK directors are not compliant with the government's new money laundering legislation.
According to research firm Coleman Parkes, which questioned 150 chief executives from top UK firms in January, 67 per cent admitted that they were not prepared, leaving them liable to legal action and a jail sentence.
Introduced two weeks ago, the regulations oblige firms to prove the identity of customers when handling cash transactions of £10,000 or more.
They must also report money-laundering suspicions to the National Criminal Intelligence Service (NCIS), recently merged with Customs and Excise.
The survey also showed that 40 per cent of firms believe they have acceptable identity authentication processes in place, and 53 per cent fear that money laundering will rise over the next two years.
Chris Bahan, business development manager at BT, which recently launched its URU online authentication service, said that links with terrorism and organised crime had prompted the changes.
"The government has been implementing anti-money-laundering in the finance sector, and has extended it to other sectors with the message that firms are helping to protect the country by stopping this activity," he said.
Bahan added that companies need to make sure staff know how to set up a full audit trail on all sales. "The most important part of a transaction is to know who the customer is," he said.
Alan Norton, head of intelligence at credit management company Graydon, said: "The IT industry is a target for money laundering as it has high-value products that are easy to resell."