“AML should never be seen as a ‘tick box’ only and always as a fully thought out and controlled process.”
What’s New in the 2025 National Risk Assessment (NRA)
The UK’s fourth NRA, published on 17 July 2025, maps evolving threats of money laundering and terrorist financing, and what they mean for businesses and professionals across sectors . The 163-page report stresses:
- Increasing use of sophisticated criminal schemes (cryptocurrency, layer networks, shell entities)
- Continued risk from open financial systems that facilitate both trade and illicit flows
- Identification of legal sector vulnerabilities, including trust/ company formation, conveyancing and client accounts
Why the Legal and Professional Sector Is on High Alert
A recent independent review reinforced this risk: solicitors and law firms are still seen as high-risk for money laundering. The NRA highlights that trusts, opaque corporate structures, and rapid funds through client accounts are typical laundering vehicles.
“The recent National Risk Assessment does not mean that using a solicitor is high-risk. It means that Solicitors often deal with potentially high-risk transactions and are at risk of being exposed to money laundering and terrorist financing. The NRA states that there needs to be ‘increased effectiveness of the AML/CFT regulatory and supervisory regime’. The responsibilities upon solicitors to carry out CDD/EDD will only increase. Solicitors and Law Firms need improve their ability to identify and mitigate risk. If you want to stop the baddies, you need to think like the baddies”
Mark Heffer, Fraud Prevention Specialist
Key Takeaway 1: Tick-box Compliance Isn’t Enough
While checklists can guide you, AML must be a fully integrated process:
- Regular risk assessments tailored to your business context
- Enhanced due diligence where risks are highest
- Ongoing internal control reviews and staff training
This aligns with the NRA’s focus on risk-based, evidence-informed strategies, across financial institutions, regulated businesses, and professional firms.
“The National Risk Assessment 2025 reiterates that conveyancing, trust and company services are found to be the greatest risk areas for money laundering, including the misuse and exploitation of client accounts. Sham litigations were identified in 2020 as an emerging risk, but with just one related prosecution since this is no longer viewed as a widespread problem. Here at Teal, we will continue to help law firms identify and close any gaps in their AML compliance via our range of support services. That said, we hope to see a more balanced and evidence-led risk-based approach when it comes to the SRA's enforcement approach.”
Key Takeaway 2: Address Specific Threat Areas
The 2025 NRA calls out critical services that demand extra attention:
- Trust & Company Formation
- Shell companies and nominee structures remain high risk
- Shell companies and nominee structures remain high risk
- Conveyancing
- Especially in “super-prime” regions, rapid transactions and cash use are red flags
- Especially in “super-prime” regions, rapid transactions and cash use are red flags
- Client Accounts
- Risky when used like banking accounts; CDD must tie money flows to genuine transactions
- Risky when used like banking accounts; CDD must tie money flows to genuine transactions
Key Takeaway 3: Supervision and Enforcement Must Be Robust
The NRA shows that professional bodies (like the SRA) are under scrutiny, and enforcement is ramping up. Notable outcomes include:
- Significant compliance failures in global firms, e.g. Simpson Thacher fined £362,000 for inadequate AML policies in its London office
- Ongoing crackdowns in professional services, and calls for clearer, targeted regulations.
Turning Law Firm Risk Into Resilience
The team here at Teal Compliance focuses on supporting law firms on why and how to embed AML into their DNA, not just in documentation, but throughout their operations.
How?
Tailored Risk Assessments
Identify and quantify risk areas. The easy targets are private client, conveyancing, and commercial.
Control Design & Testing
Put CDD and enhanced due diligence (EDD) steps into action, and carry out regular audits, whilst ensuring these controls are actually working.
Culture & Training
Ensure your team recognises warning signs and follows AML compliance and regulatory protocols, whilst embedding a compliance-first mindset, long before red flags appear!
Continuous Improvement
Please do monitor NRA updates and enforcement trends, and maintain and refresh internal processes on a continual and controlled basis.
Teal’s Final Word on the NRA Report
The 2025 NRA is a clear call for us all in the legal profession, nothing about your AML framework should be off‑the‑shelf. Meaningful compliance requires:
- Well-defined risk-based frameworks
- Controls matching those risks
- Regular monitoring and real-world testing
As we consistently say, AML isn’t a checkbox exercise, it’s an ongoing, disciplined journey.
How Teal Compliance Can Help
Teal AML Audits are uncover weaknesses before the SRA does!
Our SORTED Programmes are tailored solutions to embed robust AML controls
Our Training & Webinars keep your team up-to-date on sanctions, FATF outcomes and regulatory trends
