Law firms probed on anti money laundering compliance

Solicitors’ firms are to be inspected to ensure they are meeting anti-money laundering obligations, with the Solicitors Regulation Authority (SRA) revealing it will be carrying out checks on a sample of 400 law firms

Around 7,000 SRA-regulated law firms fall under the scope of the 2017 money laundering regulations, and the initial sample selected will be required to demonstrate compliance.

In the last five years, the SRA has taken more than 60 cases linked to potential improper money movements to the Solicitors Disciplinary Tribunal. This has resulted in more than 40 solicitors being struck off, voluntarily coming off the roll, or suspended from practising.

The SRA says it wants to ensure that firms have a money laundering risk assessment in place and are implementing it, arguing that a risk assessment is required by legislation and should be the backbone of a firm’s anti-money laundering approach. If firms are not complying, they will go into the regulator’s enforcement processes.

The regulator stated that each case will be judged on its facts, but if there are serious issues or a lack of willing to resolve issues promptly, it will take disciplinary action.

The SRA says it will carry out further compliance checks if the initial research uncovers sector-wide issues.

Paul Philip, SRA chief executive, said: ‘Money laundering is far from being a victimless crime and must be taken seriously. Solicitors, as enablers of moving funds around, can willingly or unwittingly be part of the problem.

‘So we expect firms to be vigilant and they, in turn, can expect us to be robust in our enforcement action where solicitors firms are involved in money laundering or are not complying with the relevant legislation.’

The regulator has been carrying out a range of work to assess how well the sector is doing to tackling the risks of money laundering, including a targeted review of firms providing trust and company services, with the result to be published later this year.

The SRA’s information on money laundering and resource materials is here.

Report by Pat Sweet

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