BRUSSELS, Oct 11: European Union officials reached a compromise deal on Wednesday on toughening money laundering rules to combat terrorisms, paving the way for their rapid adoption by member states, EU sources said.

Amid increasing political pressure in the wake of the September 11 attacks on the United States, representatives of EU member states and the European Parliament hammered out on Tuesday differences over whether to compel lawyers to report money laundering, the last stumbling block in the legislation.

The deal was subject to the approval of member state officials, which came on Wednesday.

In principle we have agreed, a European diplomat told Reuters.

The new rules must still be endorsed by finance and justice ministers from the 15-nation bloc who may discuss them as early as next week.

It’s very likely that the new rules will now be adopted, another source told Reuters.

Under existing EU laws, banks and financial institutions are expected to report to the authorities any suspicion of money laundering.

The new legislation will broaden the scope of the existing rules, extending reporting requirements to all those likely to come in contact with large sums, such as estate agents, lawyers, luxury goods dealers, casino operators and accountants.

Experts believe the inclusion of lawyers in the legislation will give a boost to the fight against money-laundering and the financing of terrorism as lawyers often glean vital information on the proceeds of crime through their role as advisers.

Under the compromise text, lawyers and other legal professionals will be required to report to the authorities approaches by clients bent on money laundering.

But they will have to have something more concrete than just a suspicion in order to be subject to reporting requirements.

This change was requested by the European Parliament which initially opposed the inclusion of lawyers in the legislation.

Confidentiality will still apply if a lawyer is representing a client in court or giving general legal counselling.

It is clear that a lawyer has a duty to disclose information when he has direct knowledge of money laundering activities or when the client is seeking advice because of money laundering, said Klaus-Heiner Lehne, the German legislator guiding the issue through the European Parliament.

But when he is acting in a court or giving general legal counselling, secrecy will be preserved, he told Reuters.—Reuters