LONDON (Within The Law) - The Solicitors Regulatory Authority has waded into the issue of anti-money laundering telling law firms that they should ‘know exactly where their clients’ money came from before entering into any transactions.
Speaking at a virtual event Mark Boyle, policy lead on anti-money laundering for the regulator warned the idea that firms need to check only whether clients have a UK bank account is a myth.
Speaking to the SRA’s annual compliance conference he said:
“The key is knowing who your client is and understanding who your client is and understanding why they have come to you – does it make sense?
“You really need to be checking how did the person get their money? Be it through salary, investment or gifts. It can be many legitimate means, but you need to understand that and be evidencing that.’
Speaking at the same virtual event, Helena Wood, an associate fellow with the Centre for Financial Crime and Security Studies, said firms who were unknowingly enabling money laundering posed as big a threat as those who were doing it on purpose.
“It is not the complicit solicitor or compliance officer who are the full part of the problem here,” she said. “I would say it’s the complacent, the unwitting and it’s negligence that is really allowing people to access the financial and legal systems in this country. It is those that see compliance as a tick-box exercise.”
The UK has always been seen as a high-risk jurisdiction for money laundering with law firms and solicitors being seen as attractive targets thanks to the position of trust they hold. However, the problem has surged during the pandemic. The SRA, which says it is seeing an increase in the number of money laundering matters it deals with joins a number of other regulators, including the FCA and SFO in taking action to remind firms of their duties regarding to money laundering.
(Written by Tom Cropper, Edited by Klaudia Fior)