The newly published UK National Risk Assessment (NRA) of Money Laundering and Terrorist Financing has been greeted with disappointment by the Law Society of England and Wales, with president Richard Atkinson pointing out the lack of prosecutions in the so-called ‘high risk’ legal sector.
The 2025 NRA, produced by HM Treasury and the Home Office, continues to classify the sector as high risk for money laundering and says there has been ‘no significant change in vulnerabilities since 2020’. The updated assessment adds:
“Criminals are often drawn to legal service providers due to the veneer of legitimacy legal professionals can offer due to perceptions of the sector’s integrity. The nature of the services offered, and the volumes of money that can be moved through them also contribute to the sector vulnerabilities…”
However, Atkinson has called for a proportional approach and says the updated document fails to take into account sector-wide improvements in compliance and reporting. He commented:
“We welcome the continued focus on identifying and addressing the threat of money laundering and terrorist financing across the UK economy.
“Legal professionals continue to play a vital role in upholding the integrity of the wider financial systems and the country’s economy and growth. It is therefore disappointing to see that the legal sector continues to be categorised as high risk, when there have been very few, if any, prosecutions or convictions related to money laundering within the legal sector.”
But the new NRA – which was previously updated in 2020 – claims that the volume of cases of suspected money laundering involving lawyers remains high. The document notes:
“Whilst there has been a decrease in the volume of SARs submitted by the legal sector since 2020, the decrease in SARs is not judged to be indicative of a decrease in the scale of misuse of legal professionals. The volume of cases of suspected money laundering that involve lawyers has remained high, relative to the small number of regulated professionals. Many identified cases that involve legal sector professionals involve high sums of assets laundered.”
The NRA also describes how criminals ‘may use a combination of legal services’ to frustrate due diligence efforts, with ultra-high-net worth criminals exploiting several firms. ‘This can make it more difficult for a single LSP to identify illicit activity’.
And, while the NRA does acknowledge that ‘the majority of firms’ ensure services are not used for criminal purposes – with only 16% found to be non-compliant in 2023/24 – it goes on to add that complacency, lack of training and weaknesses in supervision can increase vulnerabilities.
But Atkinson says an absence of direct evidence ‘raises questions about the proportionality of the risk classification’. He added:
“While we acknowledge that any sector can be targeted by criminals, the government must adopt a more balanced and evidence-led risk-based approach that recognises diversity within legal services and the proportionate risks associated with different areas of practice.”
Conveyancing continues to be considered as ‘an inherently high risk activity’, with conveyancers who deal with prime or super-prime property purchases seen as more likely to be exposed to higher risk persons. The number of firms found to be non-compliant with Money Laundering Regulations by the Council for Licensed Conveyancers rose from 48% in 2021/22 to 66% in 2023/24.
The National Risk Assessment of Money Laundering and Terrorist Financing 2025 can be downloaded at https://assets.publishing.service.gov.uk/media/6877be59760bf6cedaf5bd4f/National_Risk_Assessment_of_Money_Laundering_and_Terrorist_Financing_2025_FINAL.pdf
