AML: Remember who your client is!

Anti-Money Laundering procedures are embedded within every law firm across the UK to prevent their corporate structure being used as a vehicle for illegitimate, criminal activity.

All solicitors must carry out sufficient transaction checks on their clients, in line with Anti-Money Laundering Regulations to ensure clients are who they claim to be. That being said, Private Client solicitors are often faced with initial contact from individuals who do not become clients of the firm. So, when does this arise and what careful steps should be followed?

Straight forward vs Not-so-straight forward

Identifying a client from initial contact is sometimes straight forward. An example would be those wishing to have their Will or Power of Attorney put in place. Direct contact is made by the instructing individual and clear instructions are given. It is obvious who the client is, and necessary checks should be completed to verify the identity of the individual wishing to instruct your services.

However, difficulties arise when initial conversations are with those who do not eventually become the client(s) of the firm. This is often the case with Powers of Attorney where concerned, and usually younger, friends or family members want to protect those around them. It is often the case that those making the initial call are those that will facilitate the information being provided on behalf of the client e.g. providing Proof of Identification or Proof of Address.

Being extra careful when instructions are not direct

It is vital in these scenarios to appreciate the legitimacy of receiving instructions in this manner. There are a multitude of reasons why a friend or family member may request legal advice on behalf of another and be in a position to know their instructions. This can be anything from physical limitations to a reluctance to embrace technology and everything in between.

The most important aspect is to know who your client is and be able to comply with all Anti-Money Laundering Regulations, irrespective of who initially wishes to instruct your services.

Guidance

  • Establish who your client is from the outset of a transaction
  • If the initial contact is from an individual who is not your client, understand their relationship to the client (e.g. spouse)
  • Ensure instructions are always verified with your client
  • Obtain Proof of Identification and Proof of Address for your client

Streamlining procedures to comply

Complying with Anti-Money Laundering Regulations can be an arduous task for a firm of any size or capacity. The Law Society of Scotland has partnered with Amiqus Resolution, and their product Amiqus ID, to streamline the client identification process and produce reports to firms to confirm the identity of their clients. The process is straight forward and provides certainty to law firms that relevant background checks have been completed on the identities of new clients.

Identifying your client is vital; don’t fall into the trap of thinking your client is always the person you are speaking to!

This article was submitted to be published by Friends Legal as part of their advertising agreement with Today’s Wills and Probate. The views expressed in this article are those of the submitter and not those of Today’s Wills and Probate.

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