Beyond Box Ticking: Navigating the Evolution of AML Compliance in Today’s Regulatory Landscape

Beyond Box Ticking: Navigating the Evolution of AML Compliance in Today’s Regulatory Landscape

When it comes to AML compliance, law firms can no longer rely on a box ticking exercise. Today, both the SRA and the CLA expect firms to have policies and training that are agile and adaptive to the changing ways of money laundering and criminal behaviour.  

The CLC’s Annual Risk Agenda emphasises the need for licensed conveyancers to understand the importance of tackling economic crime. In particular, the report highlights that CLC-regulated firms must have practice-wide risk assessments (PWRA) that are reviewed annually (or when there is a significant development, such as new legislation or a change to the business). Indeed, the CLC believes that “a poor PWRA is often emblematic of a poor AML culture at a practice“, with a 2022 analysis of practice inspections finding “inadequate PWRAs present in 68% of practices that had been found to be non-compliant with AML rules.”

The SRA is also advocating a bespoke, rather than a cookie-cutter approach to AML. Its AML Sectoral Risk Assessment highlights the need for firms to have a realistic awareness of the risks posed, and the ability to differentiate between clients when assessing such risks.

At a recent SRA conference, the regulator revealed that AML training and desk-based reviews will be two of its key focuses in 2024, and firms must take heed. Not least because the Economic Crime and Corporate Transparency Act received Royal Assent in October 2023, with the new legislation giving the SRA the power to implement unlimited fines for economic crimes.

Over the next 12 months and beyond, both the CLA and the SRA will continue to emphasise the importance of robust PWRA, that take into account (amongst other factors):

  • the nature of the firm
  • the type of work it does
  • the culture of the firm
  • the people who work there,
  • the clients served.

Successful AML compliance will also require firms to keep up to date with the latest threats, trends, regulations and best practices. There is no one-size-fits-all approach to AML. And the penalties for non-compliance are likely to be substantial.

Is your law firm risk-ready?

Legal Eye’s new online AML training course for money laundering reporting officers (MLROs) and Deputy MLROs will help ensure that you are fully prepared for a visit from the regulator. Designed to meet regulator expectations, with a focus on realistic risk awareness, our course helps compliance officers align their risk assessments with the latest SRA and CLA requirements.

Covering key topics such as roles and responsibilities, ID verification, source of funds, sanctions, and more, we offer training on all the essential elements. And following a scoping call, we can include additional areas tailored to suit your firm’s specific requirements.

Developed to help build a culture of learning and diligence, not just for the compliance officer but for the firm as a whole, contact us at bestpractice@legal-eye.co.uk or call 020 3051 2049 for details.

This article was submitted to be published by Legal Eye as part of their advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.

Legal Eye

https://www.legal-eye.co.uk/

Legal Eye works with law firms to ensure compliance and optimise performance. Their extensive and thorough knowledge of the law and regulations will ensure your law firm is compliant and your processes sound. Files are audited to ensure you are not only complying with the service level agreements you have in place, but very importantly, also the code of conduct. They provide a documented audit trail which is firstly, a requirement of the code of conduct and secondly, essential for PI Insurance purposes and very often for CQS, Lexcel and other quality accreditations. This provides documented evidence of a proactive approach towards risk management. The advice they offer is clear and practical, and they pride themselves on exceptional customer service and unbeatable work quality.

Services include:

  • Specialist expertise across the full range of regulatory, risk and compliance issues to inform your internal decision making.
  • Additional qualified resource where you simply do not have the time to review your regulatory position or to carry out essential ongoing tasks such as file reviews.
  • An online risk hub –  an online resource centre for law firms. The hub provides a comprehensive bank of resources to help COLPs, COFAs, partners, directors and managers to manage risk. It includes precedent policy and procedure documents and templates, access to online training on a range of risk and compliance topics, and a range of useful materials such as ‘how to’ guides, short videos and articles.
  • Drafting and review of key policies and procedures including the supply of ‘document packs’ to save you time researching and writing documentation.
  • Expert advice on how to comply with up-to-date regulation including the very latest requirements complete with a written set of recommendations.
  • Specialist outsourced complaints  handling service provided by former SRA and LeO officers.
  • Gap analysis of your firm’s policies, processes and procedures as they relate to the Solicitors Accounts Rules (SAR) including the production of a written report summarising the strengths and weaknesses of the current arrangements and detailing recommended next steps and actions to put your firm in an even stronger position.
  • Training on SAR and on anti money laundering (AML) as well as other finance-related training which can be delivered virtually for your firm, face-to-face (subject to government guidance) or online via Legal Eye’s Training Academy.
  • A Standard Procedures Manual to provide a practical and comprehensive roadmap for firms to follow when looking to double check whether the current operating procedures are fit for purpose, setting up a new firm – or arm of a firm – or starting a new finance function from scratch.
  • Experienced advice and support for one-off projects such as achieving quality accreditations or switching regulators.
  • Proven high quality training for fee earners and staff held at your office/s covering essential risk topics such as  Anti Money Laundering, data  protection, cybercrime, conflict of  interest and more.
  • Online training from The Legal Eye Academy – core modules available to all staff at their convenience. Includes built-in auto reminder functionality so that you no longer have to chase staff indi-vidually to complete important training. Your package includes free updates to ensure knowledge is always up to date.
  • Added value updates by email to all your key people covering all the latest updates on risk and compliance.
  • The Legal Eye team includes former solicitors, partners and directors in law firms; former case handlers at regulators such as the Solicitors Regulation Authority and the Legal Ombudsman and experienced risk and compliance professionals.
Contact: Paul Saunder Tel: 0203 0512 049 Email:  bestpractice@legal-eye.co.uk Address The Old Grammar School Church Road Thame Oxfordshire OX9 3AJ

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