The Law Society's anti-money laundering helpline is a confidential telephone-based helpline for solicitors.
Our team of solicitors answer questions on a wide variety of subjects, including anti-money laundering, costs, conveyancing, client care and complaints handling.
The service operates Monday to Friday from 9am to 5pm and you can call us on 020 7320 9544.
Here is a selection of questions and answers compiled by the Practice Advice Service:
I am the money laundering reporting officer (MLRO) of a firm. I have made a report to the National Crime Agency (NCA) about a conveyancing matter where we act for the buyer of a property. I have a suspicion that the funds which the client proposes to use for the purchase of a property may be criminal property. I have received a defence against money laundering (DAML) from the NCA.
Does a DAML constitute a general permission to continue to act in this transaction?
You can request a DAML from the NCA where you have suspicion that property you intend to deal with is in some way criminal and by dealing with it you risk committing one of the principal money laundering offences under the Proceeds of Crime Act (POCA) 2002.
You would not be committing one of those offences if you have received a DAML (previously known as consent) from the NCA.
A DAML only provides a defence to specific offences in POCA 2002 should you continue to proceed with the transaction.
You should therefore consider the wider legal and regulatory obligations in deciding whether to continue to act.
A DAML does not provide any form of permission to continue to represent a client in a transaction where you have suspicion of money laundering.
In addition, a DAML does not oblige you to continue with the proposed activity nor imply legitimacy to the funds in question.
You should therefore proceed with caution in deciding whether to continue to act for the client, taking into account the risks involved.
For further information, see the NCA website and the NCA’s FAQS on DAML SARs.
I have been instructed in the sale of a property where the owner lives abroad. I have been supplied with client due diligence documents. However, I am not entirely satisfied with them.
What further steps should I take?
Regulation 33 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 provides that you must take into account that the client is not physically present when assessing whether there is a high risk of money laundering.
If you determine that the risk is high, you must undertake enhanced due diligence.
You must take specific and adequate measures to compensate for the higher risk. The measures include:
- obtain additional documents to verify the client's identity
- use supplementary measures to verify or certify the documents supplied or obtain confirmatory certification from a bank or financial institution
- ensure that the first payment is carried out through an account opened in the client’s name with a bank or financial institution
The client should be asked to ensure that any additional documents under point 1 are certified by a local lawyer whom you are able to contact independently to confirm the certification.
You should also seek an explanation from the client if there are any discrepancies within the documents supplied and also consider undertaking an electronic verification check.
You will also need to perform enhanced ongoing monitoring of this transaction.
You will also need to think about why the client is instructing you and whether the retainer makes sense.
For further information, see section 4.12 of the anti-money laundering guidance for the legal sector.
I am the money laundering reporting officer (MLRO) of a firm. Fee earners sometimes ask me how to verify clients who are unable to produce the usual documents. For example, immigration clients are often unable to provide standard documentation.
Does the Law Society have any advice in these circumstances?
Yes. Sometimes clients are unable to provide standard verification documents.
The purpose of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 is not to deny people access to legal services for legitimate transactions but to mitigate the risk of legal services being used for the purposes of money laundering.
You should consider whether the inability to provide you with standard verification is consistent with the client’s profile and circumstances or whether it might make you suspicious that money laundering or terrorist financing is occurring.
Where you decide that a client has a good reason for not meeting the standard verification requirements, you may accept a letter from an appropriate person who knows the individual and can verify the client’s identity.
- a refugee might be able to provide a letter from the Home Office confirming refugee status and granting permission to work, or a Home Office travel document for refugees
- an asylum seeker might be able to provide their registration card and any other identity documentation they hold, or a letter of assurance as to identity from a community member such as a priest, GP or local councillor who has knowledge of the client
For further information, see the anti-money laundering guidance for the legal sector.
While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such.
The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.
This article is compiled by the Law Society's Practice Advice Service. Comments relating to the questions should be sent by email to firstname.lastname@example.org.