- Publication Date
- 2024-03-22
In June 2017, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017) came into force. Law firms that carry out certain work are required to comply with the MLRs 2017 and must have Policies, Controls and Procedures (PCPs) in place, as well as conduct client/matter risk assessments (CMRAs) to identify and assess the risks of money laundering and terrorist financing.
In October 2021, the SRA’s Anti-Money Laundering (AML) Proactive Team undertook a desk-based AML review at the law firm to assess its compliance against the MLRs 2017. The audit revealed that the law firm did not have compliant AML policies, controls, and procedures in place. Additionally, it was found that four of its in-scope files lacked CMRAs.
The review led to two allegations against the law firm:
Allegation One: Between June 2017 and around September 2022, the law firm had AML policies, controls, and procedures that did not comply with Regulation 19 of the MLRs 2017.
Allegation Two: The law firm failed to conduct adequate client matter risk assessments (CMRAs) as required by Regulations 28(12)(a)(ii) and 28(13) of the MLRs 2017 on four of its files.
The SRA directed the law firm to pay a penalty of £20,870.68 after considering that the firm's conduct was serious by reference to the following factors:
- The conduct was a breach of regulatory obligations which persisted longer than was reasonable.
- The law firm was responsible for its own conduct, which was serious and had the potential to cause significant harm to public interest and confidence in the legal profession.
- The risk was heightened given the high proportion of the law firm’s work that fell within the scope of the MLRs 2017.
Mitigating factors which influenced the final fine included:
- No significant harm was caused by the firm's failings.
- The law firm made admissions.
- The law firm cooperated with the SRA.
- The law firm had remedied the breaches.