Making sure you have an AML risk assessment in place

Earlier this year we conducted a review of how well firms were complying with 2017 Money Laundering Regulations which require them to hold a firm-wide money laundering risk assessment.

We approached a sample of 400 firms, asking them to send us their risk-assessment documents. Reviewing the responses, we found that many documents were of a poor quality. In other cases, firms did not have an assessment in place.

Having a firm-wide risk assessment is a mandatory requirement under Regulation 18 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The assessment also helps you to create appropriate policies, procedures and controls to protect your practice.

As a result of the findings from our review we are now (this week) writing to those firms captured by the 2017 Money Laundering Regulations requiring your Compliance Officer for Legal Practice (COLP) to sign a declaration confirming that your practice has a firm-wide money laundering risk assessment in place. The deadline for responding is 31 January, 2020. Firms outside the scope of the regulations will not be written to.

We take our responsibilities as an anti-money laundering supervisor extremely seriously. Money laundering, and the crimes it enables, is a serious risk for the UK, and a priority focus for us.

We have provided guidance on creating a firm-wide risk assessment, alongside a sectoral risk assessment and a warning notice which you are required to take into account. The legal sector guidance on preventing money laundering and terrorist financing has other helpful information on completing and maintaining your risk assessment.

Early in the New Year, we are expecting the fifth Anti-Money Laundering Directive to come into force. We will advise you on any changes and how they might affect you once the directive is published.