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Over the past twelve months, the SRA has doubled its engagement with businesses, carrying out 254 inspections and 258 written assessments between April 2023 and April 2024.
This means that the chance of inspection by the SRA increases.
More than three-quarters of companies (77%) appeared to fully (21.5%) or partially (55.5%) comply with their obligations in the field of money laundering and financial sanctions.
But the SRA found that 23% of businesses are not following the rules, with corrective or enforcement action including:
- 44 fines imposed totaling £556,832
- two findings and warnings
- one condition imposed on a company’s permit
- four cases referred to the Solicitors Disciplinary Tribunal (SDT)
The SDT:
- issued two fines totaling £511,900
- one person suspended or employment checks placed
- In two cases it rejected or did not confirm the findings
Common compliance issues
Of the 118 companies that did not comply, the most common violations were failure to:
- conducting customer and/or case risk assessments
- have a compliant company-wide risk assessment
- have adequate AML policies, controls and procedures in place
- conduct staff training
- adequately identify and verify clients from the outset
- assessing and identifying customer or business risks
- carrying out continuous monitoring of transactions
- carry out checks on the origin of the funds
The SRA published a thematic overview of AML training in October 2024 highlighting the importance of not treating AML training as a box-ticking exercise.
Steps your company can take include:
- ensure that staff are well informed about anti-money laundering and data protection regulations
- maintaining comprehensive and detailed records of all sessions, materials and assessments for SRA inspections
- keeping detailed and up-to-date training logs
- adopt the ROLE framework:
- recognizable: tailor the training to specific roles and risks, so that it is tailor-made for your company or work types
- Ongoing: Don’t treat AML training as a one-off event and update staff regularly
- leadership-driven: involvement and buy-in from seniors is crucial
- Engaging: Use a mix of interactive methods (such as e-learning, workshops, webinars and more) to keep your team alert and informed, with real-life scenarios to keep it relevant
A thematic investigation into the source of financing will soon be conducted.
How we can help
As a professional body for lawyers, we have a range of expert resources to help you meet your legal obligations and minimize risk.
Explore our anti-money laundering hub and access expert, practical and time-saving resources, including advice on:
When it comes to due diligence, take a risk-based approach and ask yourself, “Does it make sense?”
The Anti-Money Laundering Guidelines for the legal sector also include comprehensive guidance on:
- policies, controls and procedures
- understanding and proving the source of money and the source of wealth
- governance and internal controls