Anti-money laundering guidance

In March 2018, the Legal Sector Affinity Group (LSAG), which includes the Law Society and all the legal sector supervisors named in the anti-money laundering regulations, published guidance on anti-money laundering (AML).

The guidance takes into account the changes introduced by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, and is available below in its final form.

This guidance replaces the Law Society's AML practice note.

5th Money Laundering Directive

The EU’s 5th Money Laundering Directive came into force on 10 January 2020, amending the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

LSAG has published a summary of changes to the regulations to help firms comply with the new requirements. This includes:

• a duty to collect proof of registration for entities (for example trusts and companies)
• a duty to inform the registry of any discrepancies in their information
• changes to client due diligence and enhanced due diligence

LSAG is currently redrafting the full guidance on the regulations. This will require the approval of HM Treasury and will be published in the coming months. In the meantime, you should still consult the full guidance above on most questions.

There has been a short lead-in time between the regulations being laid in Parliament on 20 December, and the legislation coming into force. However, the legislation requires firms to be compliant from 10 January 2020.

The Solicitors Regulation Authority has said they'll take the limited time that firms have had to prepare for the new requirements into account in their enforcement work.