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Firm Fined £7900 Following Desk Based AML Review
December 12, 2023

1. Introduction

A law firm was recently fined £7900 plus £600 investigation costs by the Solicitors Regulation Authority (SRA) for regulatory failures related to the Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017 (MLRs 2017), the SRA Principles 2011, the SRA Code of Conduct 2011, the SRA Principles 2019, and the SRA Code of Conduct for Firms 2019. The SRA investigation found that over a specific period, the firm did not have a fully compliant and sufficient Firm Wide Risk Assessment (FWRA) in place and also lacked compliant policies, controls, and procedures.

 2. Reasons for the Investigation and Penalty

The SRA carried out an investigation following a desk based-review by the regulator’s AML Proactive Supervision team, where it was identified that the firm did not have a compliant firm-wide risk assessment (FWRA) between June 2017 and March 2023, and their FWRA provided in November 2022 was not sufficient. However, an updated and compliant FWRA was provided in June 2023. Additionally, the firm failed to have compliant policies, controls, and procedures (PCPs) during the same period, but updated and compliant PCPs were provided in June 2023.

It was decided that a financial penalty was an appropriate and proportionate sanction. The firm accepted these failings and has agreed to the financial penalty and costs order.

You can read full details on the decision here.

 3. Expectations from the SRA

This most recent decision is not an isolated case. There have been several recent examples where the SRA has been stringent in its dealings with anyone it found in breach of its rules.

The regulator has made it clear it will focus on all cases of misconduct and compliance failures, not just on areas of obvious regulatory requirements such as FWRA and AML PCPs.

Read about some of the other cases we have highlighted:

 4. Guidance for Law Firms

At The Strategic Partner, we aim to empower firms to manage risk, compliance, and regulation efficiently, allowing them to focus on delivering exceptional service to their clients. We provide comprehensive compliance solutions that help firms identify and address potential risks and misconduct within their firms. By working closely with firms, employees, and their MLRO, COLP, and COFA, we aim to instil a culture of self-regulation and accountability.

Our services are designed to provide firms and their employees with the comfort of knowing that even in the busiest of times, you remain compliant and can evidence that you are.

We can offer expert guidance and support, including:

  • Risk Management and Compliance Review – A review of the firm’s approach to regulation and compliance to include all regulatory requirements and AML procedures. The output of this provides the firm with a written gap analysis and solutions to remedy any issues.
  • Risk Assessment Service and Independent AML Audit– A review of the firm’s approach to regulation and compliance to include all regulatory requirements and AML procedures. The output of this provides the firm with a written gap analysis and solutions to remedy any issues.
  • Regulation 21 AML 2017 Independent Audit – An audit that reviews the firm’s approach to regulation and compliance, including AML procedures, and meets the requirements of Regulation 21 of the AML 2017. The output will provide the firm with a written gap analysis and solutions to remedy any issues discovered and ensure compliance.
  • Training and Education– We offer customised training programs to educate your staff on AML regulations, source of funds and source of wealth enquiries, risk assessment, and suspicious activity detection. Our training ensures your team has the knowledge and skills to fulfil compliance responsibilities.
  • Auditing– Procedural staff, systems, and files to ensure the procedures are up to the required standard and being implemented at case level with a report of the outcome.
  • Expert Process and Procedures Drafting The Strategic Partner provides quality and bespoke document drafting in consultation with the firm and can incorporate a range of document drafting services. Our teams have the expertise to assist with more complex documents, such as Risk and Compliance and Anti-Money Laundering, alongside Client Care documents.
  • Ongoing Compliance Support– Our experts provide ongoing support and guidance, keeping you up-to-date with the latest AML regulations and best practices. We offer regular compliance reviews, advice on complex cases, and assistance with regulatory reporting requirements.

Packaged Solutions – Implementation of robust solutions to ensure the firm achieves compliance and then maintains compliance through the provision of ongoing support and assistance:

 5. Get in touch with The Strategic Partner

For more information on The Strategic Partner and to discuss how we may be able to assist in accelerating your risk management or compliance and regulation or simply to keep this up to date, you can call us on 020 3911 9710 or email us info@thestrategicpartner.co.uk.

View or download the PDF of this article here.

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