COMPANIES could be unfairly reported to the National Criminal Intelligence Service (NCIS) because new moneylaundering legislation is too wide-ranging, it is feared.

Chartered accountants warn that the new money-laundering rules are so severe that they will have to report all suspicious transactions - no matter how trivial they may seem.

But the government says that accountants have already had extended consultation time and the law will benefit firms by making it harder for criminals to operate in the UK.

Under the new rules, failure to report suspicious transactions - or tipping off the clients - could mean accountants being prosecuted. Breaches will carry up to 14 years in jail and unlimited fines.

Southern Society of Chartered Accountants (SOSCA) immediate past president David Lapthorn said: "The definition of what is a 'suspicious' transaction is very wide-ranging."

So "the accountants have to cover themselves - the only defence is to make a report," added Mr Lapthorn of Ferndown-based Ward Goodman.

Chartered accountants are calling for a minimum value to set off reportable transactions - otherwise they will be forced to swamp NCIS with "defensive reports" to protect themselves.

SOSCA members have raised their concerns with Shadow Home Secretary and West Dorset MP Oliver Letwin.

An NCIS spokesman said: "We try to look at the needs of business, along with our own needs."

But he added: "We have to look at this (moneylaundering legislation) because it is a regulatory requirement."

A Home Office spokesman said: "We are not having a go at accountants. This is about making sure that nothing slips through the net."

Before the legislation "very few accountants" were reporting suspicious transactions.

The new legislation is being driven by the second EU directive on moneylaundering. In the UK it is being implemented under the Proceeds of Crime Act 2002.

The new regime will be brought into force in full by the Money Laundering Regulations 2003.

These were published in November 2002 and were due to have come into effect in June but are now expected to be effective from September 2003.