A quarter of UK businesses believe new regulations designed to combat money laundering will undermine the competitiveness of the economy, it has been claimed.
According to services provider LexisNexis, a large proportion of UK businesses are concerned about the cost of complying with the Money Laundering Regulations 2007, due to come into force in December.
The research found that 42% of firms believe compliance will require financial investment, with 40% predicting their overall due diligence costs will increase by as much as 10-29%.
The regulations, designed to prevent money laundering and the financing of terrorism, are the UK’s response to the EU Third Money Laundering Directive that must be implemented into UK law by the end of the year.
While many businesses polled believed the laws would reduce the likelihood of falling victim to financial crime, a third said they could see no benefits to the new regulations whatsoever.
Nevertheless, over half of UK businesses are already making preparations for the new regulations, such as increasing staff training, despite the fact that official guidance has yet to be released.
This has been prompted by fears of the steep consequences of failing to comply with the new laws, LexisNexis said, which could damage a business’ reputation, lead to fines, business closures or even a jail sentence.
Mark Dunn, business consultant, Risk & Compliance, at LexisNexis, commented: “Businesses are sceptical about the Money Laundering Regulations but are pragmatic enough to know that early action to comply is preferable to the high costs of financial crime.
“The regulatory authorities are likely to clamp down hard on businesses that do not adhere to the new regulations so companies need to make sure that they don’t run the risk of being penalised.”
© Crimson Business Ltd. 2007