- Publication Date
- 2024-03-19
The investigation led by the SRA's proactive AML team identified various areas of concerns surrounding the law firm's compliance with the requirements for a documented and compliant AML firm-wide risk assessment (FWRA) and its policies, controls, and procedures (PCPs). The review was conducted between November 2021 and August 2022.
Based on these concerns, the matter was referred to the SRA's AML investigation team. The law firm was provided with guidance to assist in compliance. Although the law firm implemented a FWRA and PCPs in September and October 2022, these were still not compliant with regulations. It was only in November 2023 that the firm implemented compliant documents.
It was found that between June 2017 and November 2023, the law firm failed to ensure compliance with having a compliant FWRA and PCPs, as mandated by Regulations 18 and 19 of the MLRs 2017. This non-compliance persisted despite various regulatory directives.
The investigation led to a directive for the law firm to pay a financial penalty of £19,482. The seriousness of the firm’s conduct was highlighted for several reasons:
- The breach of regulatory obligations persisted longer than reasonable.
- The law firm ignored guidance and warning notices from the SRA for a significant period, explaining what was required, the risks of non-compliance with AML requirements, and the regulatory consequences.
- The firm’s conduct had the potential to harm the public interest and diminish public confidence in the legal profession, particularly given the high proportion of the law firm's work that fell within the scope of the MLRs 2017.
The law firm’s conduct was categorized in conduct band C, specifically at C3 (2.4% of annual domestic turnover), resulting in the financial penalty. Mitigating factors considered included the law firm’s cooperation with the SRA, actions taken to remedy the breaches, and the absence of evidence indicating actual harm materialised.