A Commission report to the European Parliament and Council suggests the existing systems works relatively well, resulting in a consultation period – which runs from now until 13 June 2012 –focusing on updating existing requirements in line with the internationally-agreed Financial Action Taskforce (FATF) standards.
The report states that no fundamental shortcomings have been identified in the existing structure regarding the prevention, detection, and prosecution of money laundering and terrorist financing.Advice will be sought from the private sector on several issues, including:

• Inclusion of tax evasion as a predicate offence for money laundering
• Extension of the risk-based approach
• Possible changes to simplified and enhanced due diligence provisions
• Harmonisation of standard due diligence requirements
• Facilitation of greater transparency in legal entities and arrangements
• Enhanced compatibility between data protection and anti-money making laundering requirements
  

There has been long-standing concern within the legal profession around the reporting regime incorporated in the directive. Responding to the consultation announcement, the Law Society of England and Wales points out that the Commission has again raised concerns about under-reporting from lawyers.
The society, which is the representative body for nearly 115,000 practising solicitors – commented: ‘The failure of some member states to clearly protect privilege or secrecy with respect to the provision of legal advice, irrespective of whether legal proceedings are contemplated, has been the main cause of concern for the legal profession.’
The short consultation period has also been criticised, especially as the Commission has not been clear on its preferences for the implementation of FATF standards.