England and Wales legal regulator begins AML crackdown
The sanctions are the first in the SRA’s enforcement action against firms that have not acted on their AML compliance obligations under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The regulations require firms to carry out a company-wide money laundering risk assessment.
The SRA reviewed how well firms were complying with the regulations in 2019 and found that many risk assessments were of low quality or, in some cases, non-existent. Consequently, all firms in the scope of the regulations were required by the SRA to sign a declaration by 31 January 2020 confirming that they had a firm-wide risk assessment.
The outbreak of the COVID-19 pandemic caused significant delays to the SRA’s follow-up procedure; however, it has now issued fines of GBP800 and cost penalties of GBP600 to six firms that only provided their declarations in March or April 2021.
All six firms are now compliant and have provided the SRA with the requisite information around their AML measures. However, the publication of the fines ‘will serve as a warning shot to legal businesses that the regulator is not prepared to overlook non-compliance,’ says the Law Society Gazette. A similar move happened in January 2021, when the SRA took disciplinary action against law firms in England and Wales that do not publish basic price information on certain legal services.
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