Legal Sector Affinity Group publishes updated AML guidance for the legal sector
The Legal Sector Affinity Group (LSAG) has updated its anti-money laundering (AML) guidance for the legal sector.
The guidance supports legal professionals in complying with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended).
It was reviewed following the introduction of regulations that implemented the EU’s 5th Money Laundering Directive. The regulations came into force on 10 January 2020.
Key changes include:
- introduction of key AML compliance principles
- expanded guidance on understanding and evidencing source of funds and source of wealth
- a new section on technology – addressing the need for firms to understand the technology they have in order to use it effectively
- fully revised and expanded guidance on risk assessments – firm-wide, client and matter
- a revised section on legal professional privilege
- revised, updated and expanded AML governance and internal controls sections
- clarifications on:
- high-risk sectors
- accepting cash into the client account
- customer due diligence (CDD) on referrals from another legal practice
- timing of CDD/exceptions
- updated training section
- discrepancy reporting to Companies House and other relevant registries following the new duty/obligations introduced in January 2020
The updated guidance is awaiting approval from HM Treasury.