- Publication Date
- 2024-05-09
The SRA conducted an audit of a law firm's compliance with anti-money laundering (AML) requirements. In December 2021, the SRA's proactive AML team initiated an inspection, revealing several areas of concern related to the firm's compliance with the mandatory documented firm-wide risk assessment (FWRA), policies, controls and procedures (PCPs), client and matter risk assessments, and AML training.
These issues prompted a referral to the SRA's AML investigation team. By April 2022, the law firm received guidance to achieve compliance. Subsequently, the firm implemented a documented FWRA and a training policy. Despite these efforts, further improvements in their PCPs were necessary.
The SRA discovered that since June 2017, the law firm failed to maintain a documented assessment addressing the risks of money laundering and terrorist financing in association with its business. Additionally, the firm lacked adequate PCPs designed to mitigate these risks and neglected to regularly review and update them.
The firm also failed to conduct client and matter risk assessments on eight client files and did not ensure all relevant employees received the required AML training.
The outcome of the SRA's findings led to the imposition of a financial penalty on the law firm. It was ordered to pay a fine due to the seriousness of its conduct, which represented a breach of regulatory obligations that persisted for an unreasonable period. Moreover, the firm disregarded the SRA's guidance and warning notices, which explained the necessary compliance measures and alerted about the risks associated with failing to comply with AML requirements.