Firms need to tighten anti-money laundering checks, says regulator

12 August, 2015

The Solicitors Regulation Authority (SRA) has said that it has been forced to make repeat visits to some firms over concerns about the potential for money laundering.

In its latest risk report the SRA identified inadequate systems and controls over the transfer of money as a key problem facing the sector.

In the report the SRA said potential breaches of anti-money laundering rules continue to rise, with 184 cases being reported in the last year.

They are concerned that law firms handling large sums of money are an attractive target for those wishing to launder the proceeds of crime.

Their report found that large corporate practices need to carry out extra due diligence on high-net-worth individuals and commercial clients and should reconsider approving high-risk work on a case-by-case basis.

In smaller firms, particularly those with conveyancing services, senior partners need to act as the firm’s money laundering reporting officer by equipping themselves with the right knowledge.

Law firms are required by law to have a reporting officer, have a process to set out how and when to report suspicious activity, identify and verify the identity of clients and train relevant employees.

The SRA also confirmed that investigators had visited a number of firms to examine systems and controls, with a ‘small proportion’ requiring a second visit to discuss how they can be improved.

Examples of areas for improvement included staff training, the quality and consistency of customer due diligence and knowledge of when to report a matter to the National Crime Agency.

If you would like help to monitor your firm’s finances for money laundering or would like advice on the risks associated with money laundering, our team at Watson Buckle can help. For more information, please contact us.