The issue of the adequacy of law firm anti-money laundering (AML) processes and policies has become a real focus for the Solicitors Regulation Authority (SRA). In its latest report on its work in this area the Chair of the SRA, Ms Bradley, said that the NCA estimates that at least 70,000 people are engaged in serious organised crime in the UK, with over £12bn in criminal cash being generated annually.
The SRA regards the profession as “gatekeepers” in relation to AML as we advise clients in relation to purchasing property, setting up companies and we provide tax advice. As a result we are seen as having an essential role in combatting this threat.
The SRA has increased resourcing in this area and has set up a dedicated AML team. This has enabled them to conduct 85 visits to firms and 168 desk-based reviews.
According to the SRA of those 85 firms visited, 45 were initially only partially compliant and of the 168 firms that received desk-based reviews, 79 were partially compliant. The SRA report suggests that it made 39 suspicious activity reports to the NCA reporting on £180m of potentially criminal funds as a result of these reviews and they say that they have achieved 29 Enforcement Outcomes based on the shortcomings of firms that they inspected.
These statistics provide a flavour of the rigour that law firms can expect when they are the subject of scrutiny in this area and the determination that the SRA will apply when using their enforcement powers. It is essential therefore that all firms review their procedures and underlines the importance of proper law firm governance.
It is clear that there is no room for complacency as firms of all sizes are finding themselves subject to scrutiny in this area.
