The Solicitors Regulation Authority (SRA) has published its first professional supervisor report which revealed that 273 reports of potential anti-money laundering (AML) breaches were made to the board, and 29 enforcement actions resulted in fines of £160,000.
The report revealed that more than 6,500 firms were captured by the scope of the AML regulations, with the work of 23,430 relevant individuals specifically of interest.
A total of 85 firm visits took place, offering guidance on issues such as tax advice, with another 168 desk-based reviews taking place. The SRA also made 39 suspicious activity reports to the National Crime Agency.
SRA’s report found that the most common reason for non-compliance with the anti-money laundering regulations was having no proper risk assessment in place for AML matters, while other issues included poor client due diligence and checks on the source of funds.
Other reasons for breaches of the regulations include a failure of staff to follow procedures, inadequate training or supervision, and poor policies.
The ALM report sets out work over the past 12 months to help firms ensure their processes are effective and followed properly, including action taken against the firms that “failed to take their obligations seriously”.
The report is a new requirement for all supervisors by both the Money Laundering Regulations and guidance by the Office for Professional Body Anti-money laundering Supervision (OPBAS) as well as HM Treasury.
Anna Bradley, chair of the SRA Board, said: “Money laundering allows some of the worst crimes in society to be profitable. Our commitment to stamping it out is clear.
“I know from our discussions with local law societies that meeting their obligations is something that matters a lot to the profession. The overwhelming majority want to do the right thing, but there is still a small but nonetheless significant proportion of firms which are just not doing enough to prevent money laundering.”
Bradley added: “As well as allowing criminals to profit from their actions, they undermine the trust consumers place in the profession, damaging confidence in the rule of law and the administration of justice.”