New Government focus on AML

Ten and twenty pound notes (sterling) scattered


When I decided to start ABC and Teal I was very clear about one thing. I will not scaremonger, use fear to sell our services.

In compliance there are serious consequences for failing, massive fines in Data Protection and custodial sentences in AML, not to mention striking off by the SRA!

But you all know those things. You don’t need me to tell you that compliance needs to be effective in your firm to mitigate the risks of these consequences.

The consequences often seem very remote – unlikely, not something that will apply to me – and I think that is correct most of the time.

However, I have woken this morning to more criticism of our profession by Ben Wallace, Security Minister, saying solicitors must do more to prevent money laundering, and that failure to report will lead to sanctions and prosecutions.

I sat in a meeting this week, as I do many weeks, with lawyers who do not recognise this criticism of being professional enablers or of under reporting. Who don’t understand why they are being criticised, or “tarred with the same brush”.

Today’s message from government is clear – professionals who enable money laundering will be scrutinised, and there is a high probability of action.

My message today is this – MLROs/COLPs/MLCOs – ask yourself these 5 questions to establish whether you are confident your firm is doing enough.

  1. Are you confident your policies and procedures are effective? Have you had any examples where something should have been spotted earlier, particularly if you have had a production order about a case.
  2. Are you confident all issues are reported to you? Have you had any reports from the high risk areas? If not, are you confident staff know what to look for?
  3. Do you turn cases away because you have concerns about the due diligence, source of funds? If the answer is yes you can point to evidence which says your risk assessment process works in weeding out suspicious cases and stopping money laundering.
  4. Does your CDD procedure properly consider the source of funds? Often CDD is mainly focused on Client ID – which does not prevent money laundering. You need to be able to demonstrate you have considered the source of funds and wealth and thought about any red flags.
  5. Are you confident on the law, what you must report, what the level of suspicion is, how to report?

If any of these answers are no, I would urge you to address them urgently.

Help is available on the Law Society website, the updated guidance from the Legal Sector Affinity Group is essential reading.

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