The Solicitors Regulation Authority (SRA) will be testing a sample of firms’ anti-money laundering policies every month as it increases efforts to combat misconduct in the profession.
The solicitors regulator will also expand visits to every high-risk firm on a three-year rolling basis, along with visiting a sample of lower risk firms. The stepping-up of monitoring is revealed in a draft business plan for 2020/21, published last year. Findings from the reviews of firms’ procedures and controls will be published, with further reports to the Treasury and the Office of Professional Body Anti-Money Laundering Supervisors (OPBAS). The SRA currently spends around 2.5% of its overall budget on AML activities, which was expected to rise in 2020/21 to 3% of the budget.
The regulator has rightly identified money laundering as a priority risk amid concerns that solicitors, even oftentimes unknowingly, are supporting organised crime such as terrorism and drug trafficking. A previous review in 2019 found that over a third of firms had not made a full risk assessment, and half of the reports received by the SRA about money laundering involve not having carried out correct and proper due diligence on a client or their funds. To add to this, the Financial Action Task Force (FATF) has said in the past it was concerned about the relatively low number of suspicious activity reports filed by solicitors and other legal professionals in the UK.
The SRA also plans to open a new office in Wales, as part of increased engagement with the profession in the country. This will mean it can work more closely with different groups, including the Cardiff office of the Law Society, on the key issues for Welsh consumers and the profession.
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How we can help
At LS Consultancy, our consultants are industry experts that interpret the rules, regulations and spirit of the industry guidelines by assisting you “the client” in implementing a compliance programme that you can be confident is mitigating the risk of financial crime. What we can do:
- We analyse the relevant jurisdictions legislation, regulation and industry guidance to ensure that your controls adopt the highest standard possible
- Analyse and/ or Enhance your Business Wide Risk Assessment to ensure we consider money laundering and relevant predicate crimes
- Assessment of your Customer Onboarding and/ or Periodic KYC reviews rely on independent documentation and supported by credible information from your customer – as this is key to your compliance programme.
- Robust Transaction Monitoring and Screening whilst utilising your up-to-date KYC documentation/ information are fundamental.
- Greater emphasis on training – why not go through live examples with your RM’s, Operational Teams and Compliance – discuss the areas of concern and come up with compliant solutions.
- Ensuring your Compliance Monitoring Programme is conducted on a regular basis
- Engagement with senior management through relevant committees
For further information please contact us where our industry experts will be happy to answer your questions.
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