By Sammie Jones-
Law firms need to do more to prevent money laundering, the Solicitors Regulation Authority said today after a review of 59 practices providing trust and company services.
The SRA conceded said its review found no evidence of actual money laundering or any intention of becoming involved in criminal activities, but spotted breaches of the 2017 Money Laundering Regulations. The SRA also said it discovered poor training and processes. Firms committing such breaches could be unwittingly assisting money launderers.
One of the biggest areas of concern was firms’ risk assessments, where over 30% of firms reviewed were found wanting in this area, including four that had no risk assessment at all.
Customer due diligence also raised concerns, the SRA said. The regulator found inadequate processes in almost a quarter (14) of firms to manage risks around politically exposed persons. However it found that 15 firms had turned down work following effective customer due diligence. The finding is shocking and calls for a major overhaul of the processes of many BritIsh solicitor firms.
As a result of the review, the SRA put 26 firms into its disciplinary processes. It has begun a further review of 400 other firms to check compliance with the 2017 Money Laundering Regulations. This review will be led by a new dedicated anti-money laundering unit, being set up to bolster resources to prevent and detect money laundering.
Paul Philip, SRA chief exective, said: ‘Most solicitors take their responsibilities seriously, but too many firms are falling short. Those firms should be on notice that compliance is not optional. They need to improve swiftly. Where we have serious concerns that a firm could be enabling money laundering, we will take strong action”.