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SRA Crackdown on Money Laundering Breaches: Analysis Reveals Surge in Frequency and Severity of Sanctions
March 14, 2024

1. Introduction

An article published in The Law Society Gazette has highlighted the increasing number of sanctions the Solicitors Regulation Authority (SRA) is imposing for anti-money laundering rule breaches. According to recent analysis, the article shows how the SRA has significantly intensified its response to money laundering breaches in the past six months. Since October 2023, the regulator has imposed 19 fines on firms for non-compliance with anti-money laundering (AML) regulations, with ten fines exceeding £10,000. The most significant penalty of £100,000 was levied on national firm Ashfords in November, marking the most substantial sanction among the top 100 firms sanctioned for AML breaches in the last year.

2. Increase In Fines From SRA

In contrast to the preceding period from March to October last year, where the SRA issued only six AML-related fines, the recent surge reflects several changes which have impacted the figures. Notably, the SRA’s enhanced fining powers, extended from £2,000 to £25,000 in 2022, have contributed to the steeper penalties. Additionally, reforms to the SRA’s approach to financial penalties implemented last year tie fines to a percentage of firms’ annual domestic turnover, up to a maximum of 5%, aiming to deter repeat offences and bolster public trust in the legal profession.

While some attribute the apparent increase in SRA activity to absorbing cases previously handled by the Solicitors Disciplinary Tribunal, the surge in fines signals a concerted effort to enforce AML regulations. The SRA has always been clear that it will take action against law firms that do not have adequate systems in place to prevent money laundering. SRA chief executive Paul Philip emphasised the regulator’s commitment to combat money laundering, positioning it as an anti-money laundering supervisor, and this crackdown aligns with the SRA’s mandate to uphold professional standards and safeguard against financial crime.

Read the full Law Society Gazette article here: SRA Cracks Down on AML Breaches.

For further related news, you can read some of our previous articles here:

3. International Law Firm Fined £500,000 by Solicitors Disciplinary Tribunal

Earlier this year, it was reported that Clyde & Co, a top 50 law firm, was fined £500,000 by The Solicitors Disciplinary Tribunal (SDT) for not carrying out due diligence on a corporate client for more than four years. A former partner of the firm was also personally fined £11,900 by the SDT after admitting that he had contributed to the failure to check more than a dozen transactions as per the anti-money laundering regulations. However, there was no evidence of money laundering or financial crime committed by the client or its principals.

This sanction was not the first the firm has received. The international firm was previously fined £50,000 and three partners £10,000 each for accounting failures and breaches of AML rules.

These high-value fines highlight the regulator’s and SDT’s increasingly tough stance on anti-money laundering failures.

4. Regulation and AML Guidance for Law Firms

As this article shows, the regulator is committed in its stance against those who breach their regulatory and AML obligations. 

At The Strategic Partner, we work with firms, their MLROs, MLCOs, and their COLPs and COFAs to provide tailored training and outsourced support solutions. Our objective is to help these firms effectively manage risk, compliance, and regulation. By establishing and maintaining a compliant structure, we aim to enable firms, their managers, and owners to concentrate on operating their businesses and delivering exceptional service to their clients.

If you believe your firm may be at risk or wish to confirm your firm is achieving the required standard, we can offer expert guidance and support, including:

  • Risk Management and Compliance Review – This is a review of the firm’s approach to regulation and compliance, including all regulatory requirements and AML procedures. The output provides the firm with a written gap analysis and solutions to remedy any issues.
  • Risk Assessment Service and Independent AML Audit—This service reviews the firm’s approach to regulation and compliance, including all regulatory requirements and AML procedures. The output 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, to discuss how we may be able to assist in accelerating your risk management, compliance, and regulation, or simply to keep this up to date, call us on 020 3911 9710 or email us at info@thestrategicpartner.co.uk.

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