- Publication Date
- 2024-03-18
The Solicitors Regulation Authority (SRA) conducted an audit of a law firm's compliance with the Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017. During this process, they identified that the law firm had policies, controls, and procedures in place that did not comply with Regulation 19 of these regulations from June 2017 to February 2023. Additionally, the firm failed to conduct adequate Client and Matter Risk Assessments as required by Regulation 28 during the same period. The firm's newly updated procedures, compliant with the regulations, were submitted in February 2023.
The SRA assessed that the firm had shown disregard for statutory and regulatory obligations which potentially facilitated dubious transactions linked to money laundering. This inadequacy posed a considerable risk, as the firm did not establish adequate anti-money laundering documentation and controls. Subsequently, a regulatory settlement agreement was reached, where the firm agreed to a fine as a suitable corrective measure. The SRA did not detect any direct harm to consumers or third parties and noted a low risk of recurrence, mitigating the seriousness of the misconduct.
To determine the appropriate fine, the SRA followed its published guidance, considering the nature and effects of the misconduct. The firm was categorized as medium risk due to its insufficient compliance measures and the oversight that potentially allowed vulnerabilities to persist over an extended period. However, the firm has since addressed these deficiencies and is now compliant. The agreed financial penalty reflects the firm's annual turnover and serves both as a disciplinary measure and a deterrent to similar conduct in others. The settlement emphasizes maintaining public confidence in legal practices by ensuring adherence to anti-money laundering legislation.