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Improvements required for more than half of the AML policies reviewed by SRA
November 2, 2022

 1. Introduction

Following our previous article, covering details from the recent Anti Money Laundering Annual report 2021-22 and the regulators’ concerns, we continue with further key discovery points and guidance for firms. This article looks specifically at Assessing Risks and Controls, in particular, the AML policies firms must put in place to mitigate against any money laundering risks.

 2. Assessing Risks and Controls

The Solicitors Regulation Authority (SRA) have been continuing their staunch approach to preventing and detecting money laundering within the legal sector and ensuring that solicitors understand and comply with their obligations to uphold the financial sanctions regime.

Within the report the SRA highlighted its main concerns regarding firm wide risk assessments, AML policies, and controls, stressing that out of the 224 firms reviewed, more than half – 58% – of the AML policies they reviewed needed improving and that a Firm Wide Risk Assessment (FWRA) should evaluate the money laundering risks the firm is exposed to. The regulator said:

“The AML policy should set out the measures staff should take to protect the firm against money laundering. This is another area where firms must be doing more. We have, and will continue to take action against firms with poor quality AML policies.”

The regulator emphasised the importance of a compliant FWRA (as required under regulation 18) and whilst improvements have been noticed in this reporting period, a significant proportion of firms still had non-compliant or only partially compliant FWRAs, and they have urged firms to review and update this key document. The regulator said:

“The purpose of a FWRA is to identify the risks a firm is or could be exposed to. Then, appropriate policies and procedures can be put in place to mitigate exposure to financial crime. It is a crucial document for preventing money laundering and forms the backbone of firms’ AML controls.”

 3. Understanding compliance requirements

Risk management and Compliance is a requirement for every law firm and there is no margin for error. A firm that has not developed a robust approach to manage risk and compliance is at risk from investigations by the regulator, fines, and sanctions, alongside increasing insurance premiums.

How confident are you that your AML prevention procedures are adequately maintained and sufficiently applied, and would they hold up to strengthened scrutiny?

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.

  • Regulation 21 AML 2017 Independent Audit– Our service provides firms with a completely independent audit and ensures the review is completed and reported on in accordance with the regulatory requirements. The output of which provides the firm with a written gap analysis and solutions to remedy any issues that rise and ensure the firm is compliant, find out more.
  • 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. Find out more.
  • File Reviews/Auditing – At TSP we engage with firms undertaking files reviews where we consider procedure, 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.

We will work with you to ensure your firm operates in a fully compliant environment and stays there. Through achieving this, the compliance officers in the business can be assured and confident that their obligations are being met, enabling them to focus on other areas of the firm.

Our flagship compliance products are designed to give law firms cost-effective solutions that maintain an ongoing relationship across a 12 month period and beyond. You can view the 2 packaged services by clicking the following links and viewing our detailed product brochures:

We can also help with:

 

 4. Get in touch with our compliance team

We would be pleased to discuss your current approach to regulation and compliance and how our services will assist you in ensuring your firm is protected.

Contact our team today on 0203 911 9710, email us info@thestrategicpartner.co.uk or make an online enquiry here to request your transparency fee rules review.

 

View and download the PDF of this article here.

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