The Solicitors Regulation Authority (SRA) has issued an updated version of its “Compliance with the money laundering regulations – firm risk assessment” warning notice.
The notice, which was originally issued on the 7th May 2019 but updated at the end of October, highlights the SRA’s concerns that too many firms do not have risk assessments in place, and that as a consequence those firms could be failing to prevent money laundering. They reference their AML Risk Assessment which firms are required to take into account. This looks at risk factors in AML broken down by product and services risk, client risk, transaction risk, delivery channel risk and geographical risk.
The warning notice goes on to say that:
“Failure to have a money laundering risk assessment in place for your firm is a significant breach of the money laundering regulations. We will take robust enforcement action where firms do not have one in place, where it is not sufficient to meet their responsibilities or where breaches are not rectified immediately”.
It is in the light of these findings that the SRA have now announced that they will be increasing their checks on firms to check that they have assessments in place as well carrying out what they describe as “as an extensive programme of targeted, in-depth visits to firms”. This will target around 7,000 firms.
For further information see our article “AML – Renewed SRA Risk Assessment Warnings“.
You may also want to refer to the Legal Sector Affinity Group’s “Anti-Money Laundering
Guidance for the Legal Sector” which can be found on the SRA’s website at www.sra.org.uk//globalassets/documents/solicitors/code/lsag-anti-money-laundering-guidance.pdf?version=4a8a4b and refer generally to the SRA money laundering page.