Money laundering is yet again proving to be one of those resolutely perennial of topics. The chances are that you will have received in the past week or so a request from the Solicitors Regulation Authority (SRA) for your firm to certify to them by the end of January that you are in possession of a valid AML risk assessment as required by r.18 of the Money Laundering Regulations 2017. As this latest thematic review by the SRA will be taking in some 7,000 firms you should not read too much into the fact that you have been singled out to take part in this particular exercise. It may be worthwhile, however, if you have not spotted the request, that you check your email and spam mailboxes. They have been sent to whoever is named as COLP at your firm.
The latest survey follows on from an earlier review this year involving 400 firms which questioned the adequacy of their risk assessment exercise as required by the Money Laundering Regulations 2017. The SRA duly reported at the end of October that they had been disappointed with the outcome of the exercise with one in five respondents having, in their view, no risk assessment at all or one that was not fully compliant with the regulations.
The current exercise looks at the risk assessment process only and not the customer due diligence controls or the policy that those firms subject to the regulations are required to have in place. To comply with the current notice being sent round, it will not be necessary to send the completed risk assessment into the regulator for inspection, but clearly those signing off the return will be anxious to know that they have good grounds for doing so for fear of a disciplinary response by the SRA if they do subsequently investigate the firm’s documentation and conclude otherwise.
Unfortunately the documentation sent out by the SRA assumes a greater knowledge of the legal and professional obligations than most are likely to possess and we have already received several requests for help with this process from subscribers. For that reason we have assembled some materials to help subscribers with their response. They comprise:
- An introductory explanation: ‘The Infolegal Guide to Certifying Risk Assessments’;
- An explanation of the issues that the SRA have suggested that you should consider in drafting your risk assessment (‘Money laundering and terrorist financing firm-wide – December 2019 risk assessment’; and
- An updated and amended version of our Risk Assessment Questionnaire which you might find easier to work on than the SRA’s own version as it helps you to assign a risk level to your firm.
Subscribers to the Infolegal Compliance Hub service will also find a template AML policy within the ‘Office Procedures Manuals’ together with drafts of some of the AML compliance forms your firm may require.
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