From today (8th September 2014) the Solicitors Regulation Authority (SRA) are setting out to improve the controls put in place within the law industry, to help prevent money laundering within businesses. In-depth screenings will be carried out on all relevant businesses, including many law firms across the country.
The legal sector is a key area of focus for this project, as large sums of money are often exchanged, which could be a primary target for unlawful professionals and clients. These risks are particularly prominent within probate, where many actions can be taken by employees and clients in attempt to cheat the system.
All solicitors have a duty under the Code of Conduct to ensure their firm have sufficient systems and safeguarding in place that comply with anti-money laundering legislation and the Proceeds of Crime Act. The SRA will be working closely with both large firms and sole practitioners to check the controls are effective.
"Law firms often handle large sums of money, and this means they attract those who seek to launder the proceeds of crime." says Paul Philip (Chief Executive, SRA).
"We want to work with the profession to ensure that all firms, no matter how large or small, have the systems in place to guard against money laundering and that they are compliant with the current regulations and legislation."
Any business covered by the Money Laundering Regulations 2007 must have procedures put in place. Industries that fall within this group include finance and credit professionals, estate agents and law professionals. Any failings will be taken very seriously and investigations to combat any issues will be carried out promptly.
- Essential controls that must be applied within the law industry include:
- Checking identity of customers.
- Management control systems.
- Recording all transactions, checks and risk assessments.
- Procedures and processes in place and ensuring all employees are trained to put them into practice.
Businesses also have an obligation to report any suspicious activity should it arise. Philip has announced the SRA "want to ensure solicitors are meeting their legal obligations to report suspicious transactions to the appropriate authorities.
"The SRA will be taking a robust stance on anti-money laundering compliance and will deal promptly with any firm that that transgresses the rules."
Once the work is complete come May 2015, and all relevant firms have been screened, the SRA will report their findings later that year.
