On 29th October 2019 the LS Gazette reported that the SRA has given notice that it would over the coming weeks contacting thousands of firms to ask what measures they have in place to combat money laundering. 7,000 firms fall within the regulated sector. On an earlier investigation, it found the majority of firms (64%) were using templates, many of which were of low quality. The SRA believes too many firms appear to take a ‘copy and paste’ approach without thinking through the specific risks and issues they individually face. As well as writing to the 7,000 at-risk firms, the SRA now plans an ‘extensive’ programme of targeted, in-depth visits to firms and calling in more firms’ risk assessments.
Here is a link to the SRA Warning Notice of 29.10.19: https://www.sra.org.uk/solicitors/guidance/warning-notices/compliance-with-the-money-laundering-regulations-firm-risk-assessment-warning-notice/
In summary from the SRA Warning Notice
“Failure to have a money laundering risk assessment in place for your firm is a significant
breach of the money laundering regulations. We will take robust enforcement action where
firms do not have one in place, where it is not sufficient to meet their responsibilities or where breaches are not rectified immediately.”
“We are seeing too many firms that do not have a risk assessment in place, and those firms could be failing to prevent money laundering.“
“We also have a broad concern that firms have not taken into account our sectoral risk assessment as they are required to by Regulation 18(2)(a).”
“Of the 400 risk assessments we [recently] assessed, we have taken follow up action on around 20% which did not meet the required standards. We have also seen broad use of templates, some with prepopulated specimen text. In some cases near-identical risk assessments were submitted by different firms, something that is particularly concerning.”
“Of those risk assessments that are in place, we are seeing that many do not take into account the minimum risks that the regulations require firms to consider.”
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