Anti money laundering round-up
03 March 2015
We are halfway through our anti money laundering campaign, helping firms to test the systems they have in place to identify suspicious activity. The campaign was launched in September and will report back in May. It has been well received by the profession and there has been some interesting feedback.
We launched our anti money laundering campaign in September to support solicitors and law firms.
We are roughly at the halfway stage in the campaign, with around half of the 500 firms identified as high-risk having been visited by us. Of those, only around 20 will need a second visit from us for further work assuring the systems they have for identifying suspicious activity.
The legal sector is one of a number of areas of work that attracts organised criminals seeking to launder the proceeds of crime, a fact made in a 2013 Financial Action Task Force report. Concerns have also been raised recently by the National Crime Agency (NCA) about the quality of suspicious activity reports submitted by the profession and the reduction in numbers submitted over recent years to the central reporting body the UK Financial Investigation Unit.
Our campaign is about testing the processes we felt were perhaps most at risk of being targeted for money laundering to ensure they are set up to identify suspicious activity and making reports to the NCA. We also tested staff awareness of these systems and their ability to apply them to ensure that they could effectively identify suspicious activity and make reports to the NCA.
The guidance we have placed on our website (www.sra.org.uk/aml) outlines a number of "red flags" that tell solicitors that the activity is suspicious. Solicitors should be familiar with all of the red flags that suggest they have been asked to handle suspect transactions.
Paul Philip, Chief Executive, said: "The profession's reaction has been excellent and very positive. No-one has been negative about the campaign, and we continue to have lots of interest shown in the work that we're doing.
"Everyone we have engaged with is interested in the final report and we hope that it will be use to the profession once it has been completed. A number of firms we visited showed us they had refreshed their training and systems—with the dates showing that this had been carried out a few weeks before we arrived. The challenge for us is to create a culture where firms are updating their systems without the encouragement of an SRA visit—it should be in-built.
"There have also been some learning points for us and some further work is being done around issues we have identified with firms' systems that are new to us."