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Practice advice Q&As: July 2020
Our dedicated team of solicitors on the anti-money laundering helpline has been advising on anti-money laundering for over a decade. We can help answer enquiries around:
- customer due diligence
- source of funds
- sanctions and much more
We can also help you navigate the Legal Sector Affinity Group (LSAG) anti-money laundering guidance for the legal sector.
The service operates Monday to Friday 9am to 5pm and you can call us on 020 7320 9544.
Here is a selection of questions and answers on some popular topics compiled by the Practice Advice Service:
Our new firm is preparing its policies and procedures in relation to anti-money laundering (AML). We have in place a practice-wide risk assessment, do we have to also carry out a risk assessment on every new regulated matter?
Regulation 19 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 sets out the requirements for firms to have written policies in place to mitigate and manage AML risks identified in the firm’s risk assessment. Regulation 28(12)(a)(ii) sets out that your customer due diligence measures must reflect the level of risk arising in a particular case.
Therefore, a risk assessment will be required on every new matter. This will also assist you in understanding the purpose of the transaction.
You must prepare a written firm wide policy covering client risk assessment and due diligence procedures setting out the basic information that you require from a client in every matter and additional measures that the firm may require for higher risk transactions. Many firms include a section covering ‘Risk assessment’ in a ‘Client inception form’ which is completed on every client file where a risk rating is given covering the following:
- area of law
- client type
- simplified, standard or enhanced due diligence
- nature of instructions
Risk assessment is an ongoing process for each client. The better you know your client and understand your instructions the better placed you will be to assess risks and spot suspicious activities.
My client has had his bank account frozen following an application by the National Crime Agency. The freezing order was granted by a magistrate and my client was given no notice of the application. The account contained £5,000 and the freezing order has caused my client financial hardship. Can I challenge the order and if so, what is the procedure?
You can apply to the Magistrates’ Court that made the freezing order to have it set aside or varied. The application is made following the procedure set out in s303Z4(1) Proceeds of Crime Act 2002. In cases of demonstrable financial hardship, the court can vary the order to make allowance for reasonable living expenses and legal expenses. Upon receipt of the application the court must set a hearing date which shall not be earlier than seven days from the date upon which it is fixed.
For further information please see the Magistrates’ Courts (Freezing and Forfeiture of Money in Bank and Building Society Accounts) Rules 2017.
I recently attended an AML training session. One of the delegates mentioned a new organisation called OPBAS which he said had very extensive enforcement powers, including the right to inspect individual law firms to ensure that their AML procedures are fully compliant. What is OPBAS and is this correct?
The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) is a regulatory body which came into effect in January 2018. It sits within the Financial Conduct Authority and its sole purpose is to ensure that professional body anti-money laundering supervisors meet the standards required by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (‘the Regulations’). Although OPBAS is a regulatory body it has no power to supervise or audit individual firms of solicitors.
There are 22 professional body supervisors for anti-money laundering purposes, one of which is the Law Society, and they are listed at Schedule 1 of the Regulations. See further information about OPBAS.
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 to email@example.com.