0203 911 9710

info@thestrategicpartner.co.uk

Latest News

SRA Contemplates Automatic Fines for Money-Laundering Regulation Failures
October 25, 2023

 1. Introduction

The Law Society Gazette recently published a notice suggesting that the SRA might extend automatic fixed penalties to anti-money laundering (AML) regulation breaches. Currently, firms can be fined fixed amounts for not cooperating with document requests or failing to meet transparency requirements. However, this new proposal aims to encourage firms to prioritise AML compliance and address the issue more effectively. Additionally, the regulator has announced plans for additional inspections of law firms in the upcoming weeks, with investigators wanting to see proof of relevant and functional risk assessments.

During the recent SRA compliance conference in Birmingham, Chief Executive Paul Philip expressed his concerns about the lack of compliance within the legal sector, emphasising the importance of meeting AML regulations. He acknowledged that many solicitors might not be deliberately non-compliant, attributing it to their busy schedules. Nevertheless, he stressed the significance of enhanced enforcement.

Philip said: ‘What’s clear from our thematic review is that firms are well aware of what is required of them, but aren’t getting it right on the ground. That’s why we’ve published a warning notice, to remind the profession of its obligations.’

To read the complete article and gain further insights into this development, you can access it here.

 

 2. The Need for Proactive Measures

Law firms must recognise the significance of their responsibilities under the AML regulations and take proactive measures to ensure compliance. This involves prioritising the development of strong risk assessment and anti-money laundering processes, controls and procedures and educating all staff about the risks of money laundering and the importance of complying with AML regulations. Conducting regular training sessions will help the staff identify potential red flags and take necessary actions. Once training has been provided, ensure the evidence of completion is recorded accurately. Training should be provided annually and to all new starters.

 

The regulator has made it abundantly clear that it expects firms and those holding client responsibility to be alert to their obligations to prevent money laundering. The repercussions for failing to uphold these obligations are becoming increasingly severe, particularly if the suggested updates come into effect.

 3. The Economic Crime and Corporate Transparency Bill

Under current legislation, there is a limit to the fine that the SRA can issue for cases relating to economic crime, such as money laundering, fraud, and breaches of international sanctions. However, a recent update to the Economic Crime and Corporate Transparency Bill seeks to amend the ‘Solicitors Act 1974’ and remove the section which limits the financial penalty a person may have to pay if the misconduct relates to ‘economic crime’. The new updated Bill, set to strengthen current money laundering legislation, could give the Solicitors Regulation Authority (SRA) unlimited fining powers for penalties it can issue to firms involved in facilitating economic crime. Read our previous article here: SRA could be given unlimited fining powers for AML breaches.

 

 4. Robust Support and Guidance from Industry Specialists

At The Strategic Partner, we appreciate that keeping pace with regulatory expectations and meeting the requirements is essential but time-consuming and often confusing. Our services are designed to provide firms, employees, and their MLRO, COLP, and COFA 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:

  • Regulation 21 AML 2017 Independent Audit – We will conduct an in-depth analysis of your 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 provides the firm with a written gap analysis and solutions to remedy any issues 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.
  • 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.
  • 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 and download the PDF version of this article here.

Related Articles