It is now 30 years since the Financial Action Task Force (FATF) was established in Paris to combat money laundering. We have been advising law firms on AML compliance for over half that period; a thorough grounding in the historical development in compliance can be critical when facing regulatory investigations over the adequacy of steps taken or not taken some years ago.
The Solicitors Regulation Authority (SRA) has published A thematic review of trust and company service providers (TCSPs) and, as a result of the review, a warning notice, Compliance with the money laundering regulations – firm risk assessment. Links can be found on www.legalrisk.co.uk/news and a large volume of resources and cases on www.legalrisk.co.uk/AML.
Four of the 59 firms reviewed were found not to have complied with the requirement to undertake a practice-wide risk assessment under Regulation 18 of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017). 24 firms had inadequate risk assessments; 20 had failed to address TCSP work. Weaknesses were also found in relation to keeping Customer Due Diligence up to date.
Disciplinary action has been taken against several solicitors with many more pending. Examples include cases where solicitors failed to comply with their own procedures, two in the Solicitors Disciplinary Tribunal, Sharif 11805.2018 and Dar – 11850.2018 and a regulatory settlement agreement in a case (with shades of Monty Python) where the solicitor was unaware that his purported client had in fact died eight years earlier. Meanwhile the SRA has widened its review to a further 400 firms.
We have advised many firms on their risk assessments and on policies, controls and procedures. We also provide independent audit. We are also advising firms on SRA investigations relating to AML and other conduct issues. Our clients include a spectrum of the legal profession, from the largest international firms to smaller practices, and property professionals.