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SRA to ramp up AML visits
Julian Dixon
June 18, 2020

SRA plans to ramp up anti-money laundering visits

The Solicitors Regulation Authority (SRA) is to expand its AML visits to all high-risk firms on a three-year rolling basis, along with visiting a sample of lower risk firms.

The initiative was revealed in the SRA’s draft Business Plan and Budget, which sets out its planned work for the first year of its Corporate Strategy 2020-23, commencing November.

The SRA currently spends around 2.5% of its overall budget on AML activities, but anticipates this rising to 3% during 2020/21.

The changes mean every month the SRA will call in and analyse a sample of firms’ AML policies, procedures and controls, or their risk assessments.

The SRA will publish findings from the assessments to promote learning and improvement. Additional guidance will also be provided to help firms get compliance right. This includes the SRA’s work supporting the implementation of the Sixth Money Laundering Directive.

Other notable points made in the Business Plan and Budget include:
  • The financial and economic impact of Covid-19 is likely to be significant and long lasting. As a result, more regulatory activity is potentially needed.
  • The SRA is to start reviewing the methodology of its risk-based approach, which helps target those who may fall foul to AML oversight.
  • The SRA is also planning to undertake a thematic review into tax advice.

The SRA has identified money laundering as a priority risk. Half of all the reports it receives about money laundering involve a firm that has not conducted due diligence on a client or their funds.

Global money laundering and terrorist financing watchdog, Financial Action Task Force, has also raised concerns about the relatively low number of SARs filed by solicitors and other legal professionals.

The Office of Professional Body Anti Money Laundering Supervision (OPBAS) is the regulator that oversees the work of the SRA. It’s latest report emphasised that while strong progress has been made in implementing AML measures by the bodies it supervises, more action is needed.

The SRA is the largest regulator of legal services in England and Wales, covering around 80% of the regulated market. Information, support and guidance about money laundering and compliance for law firms is available on the SRA’s website.

The business plan is under consultation until 26 August 2020.

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Julian has more than 20 years of financial services experience gained at major investment banks including Deutsche Bank, JP Morgan and Commerzbank. His roles have ranged from front-office sales leadership to private equity. Julian has extensive knowledge of financial services processes and technology.