An article in The Sunday Times (September 9, 2018) noted that “A key part of the government’s response to the Salisbury attack is expected to be a crackdown on Russian oligarchs in Britain and the lawyers, accountants and lobbyists who advise them.”
We understand that following the establishment of The Office for Professional Body Anti-Money Laundering Supervision (OPBAS), the supervisory regulator which oversees the Solicitors Regulation Authority (SRA) and other regulators for anti-money laundering, the SRA is expected to carry out more in depth AML supervisory inspections on law firms.
We continue to advise many UK and US law firms and property professionals, large and small, on AML issues, including independent audits for compliance with Regulation 21 of the Money Laundering Regulations 2017, dealing with difficult aspects of suspicious activity reports and production orders (often involving legal professional privilege).
We believe it is an important consideration that, as a law firm ourselves, our legal advice is subject to legal professional privilege. The leading textbook, Thanki on Privilege, notes that for privilege to apply, the lawyer must have a current practising certificate. (3rd edition, para 1.50.) In R (Prudential plc) v Special Commissioner of Income Tax [2013] UKSC 1 it was held that legal professional privilege did not apply to advice by accountants.
Some may consider deferring an AML audit with the intention of ensuring they are fully compliant first. That may be a fool’s errand, as they are unlikely ever to reach that point. Meanwhile, they may be subject to a regulatory inspection, the likelihood of which, as noted above, is increasing.
An audit by qualified lawyers offers the opportunity to obtain privileged legal advice on compliance, and benchmarking with the firm’s peer group, and may also identify opportunities to streamline processes and improve efficiency.
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