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SRA starts AML enforcement action against firms
The Solicitors Regulation Authority (SRA) has fined three firms that took over a year to comply with their anti-money laundering (AML) obligations.
This marks the start of its enforcement action against firms that delay acting on their obligations under the amended Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017).
In 2019, the SRA carried out a review to monitor how well firms were complying with the MLR 2017, which require firms to carry out a firm-wide money laundering risk assessment.
The SRA sampled 400 firms and found that many risk assessments were of poor quality and, in some cases, did not exist at all.
Following the review, the SRA wrote to all firms within the scope of the MLR 2017 requiring the compliance officer for legal practice to sign a declaration confirming that the practice had a firm-wide risk assessment.
The deadline for responses was 31 January 2020.
Although it’s widely recognised by the SRA, UK government, law enforcement and the UK’s national risk assessment that the majority of the legal sector is trying its best to do the right thing, we cannot be complacent or naïve about the risk the profession is facing.
You and your practice must meet your AML compliance obligations under the MLR 2017.
There are criminals across the country buying property, establishing trusts, using corporate vehicles and engaging the legal sector to help them.
The challenge remains that criminals are often better equipped than practitioners and are well versed in using sophisticated techniques to launder illicit funds.