Is Your Firm Ready For The SRA AML System Checks?
Recently the SRA have visited 74 firms to check if they had policies and procedures in place for AML checks. The SRA have stated that “Two thirds were told to make changes to the way they work.”
The four areas that required improvement were the following:
3. Matter risk assessments
4. Source of funds
The visit showed that independent audits were not being carried out at firms. This means that independent audits should be carried out on files to ensure that the firms policies are being adhered to. With an independent audit the review of files remains impartial which means that files can be properly monitored and recommendations can be made for improvements.
With the recent LSAG 2021 guidance, firms are required to screen all relevant employees before and during the course of employment. Firms would generally do DBS checks at the commence of employment but are now required to do them on an ongoing basis; This can be every 2 or 3 years. During the SRA visits, firms were found to not have kept proper records of checks and limiting screening to conveyancing staff only. DBS checks should be carried out on all BOOM’s – Beneficial Owners, Officers and Managers and staff in the cashing and accounts department.
All files in a firm must undergo a risk assessment. This is fundamental. The assessment must take into consideration the purpose of the matter and the value of the matter. Following the initial assessment, the firm should continue to monitor the file on an ongoing basis for risk. If a file is found to be high risk this should be properly recorded and reviewed regularly as per the firms own policy. Proper Client Due Diligence (CDD) checks should be carried out and recorded on the file as per the firm’s policy.
Source of funds checks
The SRA visits showed the source of funds checks were routinely not being completed by firms. Firms are required to obtain evidence that should be thoroughly checked. Such evidence would include a review of bank statements to show the origin of funds. Firms should have a clear set of policies for source of funds and source of wealth checks to ensure firms obtain proper documentation. These checks should be carried out for all clients, both individuals and companies.
About The Strategic Partner and Our Services
At The Strategic Partner, we work with firms to ensure that they are running a compliant environment. We work with law firms of all types and sizes providing risk, compliance and guidance support. We can help you prepare tailored policies that are bespoke to your firm and provide training to all staff to help ensure the policies are adhered to. We maintain and update the policies to ensure that firms have the latest information and guidance as and when required. This alleviates the burden on the firm so that they can continue with legal work.
You can view our compliance services by clicking on the links below.
Our solutions are cost-effective and provide firms with the necessary solutions to comply with the:
• Codes of Conduct
• SRA Accounts Rules
• Regulations including AML
• Other legalisation that affects law firms
These are comprehensive packages set at affordable prices for all firms.
For more information about our Risk, Regulation & Compliance Services, you can call us on 0203 911 9710 or you can email us at email@example.com. Links to our brochures are as follows:-