- Publication Date
- 2022-08-05
The Solicitors Regulation Authority (SRA) conducted an investigation into the law firm. This investigation identified areas of concern in relation to compliance with Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017 (MLRs 2017), SRA Principles 2011 and 2019, and SRA Codes of Conduct 2011 and 2019.
During the investigation, it was found that, while the law firm had a risk assessment in place, it was neither adequate nor compliant. Therefore, the law firm did not have an AML practice-wide risk assessment as required by Regulation 18 of the MLRs 2017 from June 2017 (when the MLRs 2017 came into force) until October 2020. Additionally, the relevant lawyer failed to sufficiently regard the SRA’s warning notice on this topic first issued in May 2019.
The relevant lawyer, on behalf of the firm, incorrectly made a declaration to the SRA in December 2019 that the firm's risk assessment was compliant with the requirements of Regulation 18 of the MLRs and relevant guidance. The firm's risk assessment was not in place and compliant until October 2020.
Furthermore, the relevant lawyer and the law firm did not establish AML policies, controls, and procedures (PCPs) as required by Regulation 19 of the MLRs 2017 and previously by Regulation 20 of the MLRs 2007. The law firm was required to establish and maintain such policies and procedures to mitigate and effectively manage the risks of money laundering and terrorist financing. The relevant lawyer claimed that the firm, being a recognized sole practice with only one fee earner (himself), did not need to establish these protocols.
The relevant lawyer admitted, and the SRA accepted, that by failing to comply with money laundering legislation, both the relevant lawyer and the firm had breached their obligations:
- From October 2011 to November 2019: Failure to behave in a way that maintains the public’s trust in the provision of legal services, non-compliance with legal and regulatory obligations, ineffective business conduct, inadequate risk management, and failure to achieve outcomes related to effective systems and compliance with applicable legislation.
- From November 2019 to October 2020: Failure to act in a way that upholds public confidence in the solicitors' profession, and non-compliance with the SRA’s regulatory arrangements and other legislative requirements.
The agreed-upon outcome includes that the relevant lawyer will pay a financial penalty of £2,000 and cover the investigation costs amounting to £600.