In the largest penalty handed out since the regulator increased its fining powers last year, an Oxfordshire Law firm has been fined £20,000. The Solicitors Regulation Authority (SRA) imposed a record £20,000 fine for anti-money laundering (AML) compliance breaches, including failure to put in place a practice-wide risk assessment compliant with regulation 18 of the Money Laundering Regulations (MLRs) 2017.
2. AML Failings – the findings
The SRA said the Oxfordshire practice had failed to implement a compliant firm-wide risk assessment despite declaring to the regulator that it had done so.
Other issues identified by the SRA included:
- the lack of an independent audit function
- failure to provide AML training to a partner
- failures to check the source of funds from third parties
- weak ongoing monitoring of transactions
The firm assisted with the investigation and did not financially benefit from its misconduct. It agreed to pay the £20,000 fine and £1,350 costs.
3. Transparency rules – the requirements
Increasing numbers of firms are being asked to demonstrate their understanding of the requirements of the regulations and, significantly, evidence their compliance through providing sufficient procedure documents, submitting file audits, and staff interviews.
Read our previous article: AML Annual Report – Lack of an independent audit is top area of concern
At The Strategic Partner, we have worked with and assisted many firms in this enquiry process and continue to do so.
For many firms, dealing with this in-house without sufficient understanding, resources or time can be highly challenging to supervisors, compliance officers and their business, as compliance with the AML regulations is more complex than it may first seem. Expert advice and guidance are often essential to ensure your firm achieves and maintains a compliant status.
4. Compliance Solutions including AML, Risk Assessments, and Independent Audits
The Strategic Partner is a law firm knowledge hub. We work with both law firms and professional indemnity insurers, advising and guiding on risk management techniques to assist and reduce instances of errors or regulatory breaches.
If you believe your firm may be at risk or wish to confirm your firm is achieving the required standard, at The Strategic Partner, we offer a range of solutions.
4.1 Risk Management Assessment Service – This service provides a detailed analysis of the firm’s approach to risk management and supervision, enabling the firm to improve its level of risk generally and remove (or minimise) the risk of negligence or criticism from the SRA or a Professional Indemnity Insurer.
4.2 Regulation 21 AML 2017 Independent Audit – A review of the firm’s approach to regulation and compliance to include AML procedures, with the audit meeting the requirements of Regulation 21 of the AML 2017. The output of this provides the firm with a written gap analysis and solutions to remedy any issues that rise and ensure the firm is compliant.
4.3 Training – Our typical AML Training includes:
- AML Training for ALL staff to meet the firm’s obligation to provide annual training.
- 1-2-1 training for the MLRO and MLCO on their obligations and requirements.
- Practical training for those involved in client onboarding to ensure their ID and AML checks are correctly completed.
4.4 File Reviews/Auditing – At TSP, we engage with firms undertaking file reviews where we consider procedure, staff, systems and files to ensure the procedures are up to the required standard and being implemented at the case level with a report of the outcome.
5. Our Packaged Regulation and Compliance Solutions
To further bolster a firm’s approach to overall risk control, regulation and compliance, The Strategic Partner has developed two services that can be utilised as part of a fully outsourced solution. Full details of each service can be viewed by clicking the links below, but a summary of each service is as follows:-
5.1 Risk Regulation & compliance Service including AML – Our Risk, Regulation and Compliance Service (including AML) has been designed to provide law firms of all sizes with a compliant environment. We provide bespoke policies and procedures for how your firm works, whilst drawing your attention to any gaps in your risk and compliance activities, whilst drawing your attention to any gaps in your risk and compliance activities. We work with firms of all sizes and types, from partnerships to ABSs, high street firms, and multinational firms. Each firm is different, and whilst there is a commonality of regulation and expected standards, it is essential to recognise how a firm implements compliance to tailor the solution to each firm’s working practices.
5.2 Risk, Compliance, AML Guidance and Register Administration Service – Running a compliant law firm is not just about implementing a set of policies and procedures; the obligations of the Compliance Officers stretch way beyond this, as there is an ongoing responsibility to manage, maintain and monitor the application of the firm’s compliance strategy. The Strategic Partner’s Risk, Compliance, AML Guidance and Register Administration Service is an outsource solution providing all staff with access to an experienced and knowledgeable Compliance Manager for guidance and ensuring the regulatory requirement active management of the firm’s registers is met.
6. Our Expertise
Our goal is to become a valued and respected partner to our member law firms, consistently providing high-quality services and solutions. If you would like to discuss how your firm approaches AML or if you would like to discuss any of our solutions you can call us on 020 3911 9710, email us email@example.com visit our website and make an online enquiry.
7. Where are we based?
Our regulation and compliance consultancy teams are based across the UK, with offices in London, Middlesbrough, and Birmingham. Find out more: The Strategic Partner offices.