AML and solicitors: time to root out the bad apples? John Binns writes for Money Laundering Bulletin

AML and solicitors: time to root out the bad apples? John Binns writes for Money Laundering Bulletin

BCL partner John Binns writes for Money Laundering Bulletin discussing The new draft business plan of the UK’s Solicitors Regulation Authority (SRA), saying it will regularly visit ‘high risk’ law firms to check their AML compliance.

Here’s an extract from the article:

“Few would argue with the proposition that there are solicitors and others who work at solicitors’ firms out there who are ‘getting away with’ breaching the UK’s money laundering laws. That will necessarily encompass a broad range of ‘bad actors’, from people who are knowingly laundering property for their clients or failing to report them, at one end, to otherwise legitimate firms that choose not to invest in the time and resource to develop a robust AML programme and the expertise, internal or bought-in, to deal with it.

As well as breaking the law, all of these ‘bad actors’ are also harming the profession to some extent – the dishonest by tarnishing its reputation, the corner-cutters by disrespecting a supposedly level playing field. So it must be right that the SRA’s draft business plan (on which it has, for the first time, invited comments) commits it to stepping up the fight against these people, by regular visits to ‘high risk’ firms, and spot checks on a sample of the rest, and to reporting back to the Office for Professional Body AML Supervision (OPBAS). It might also help calm those critics of the profession, notably within the UK’s National Crime Agency (NCA), who accuse it en masse of not reporting enough suspicious activity to them. What possible problem could solicitors have with that?

The potential problems

What does ‘high risk’ mean?

Actually, they should have at least three. The first of course is that phrase ‘high risk’, which begs the question of how this is defined. Those firms involved in high-end London property transactions for tax haven-incorporated clients should consider themselves targeted, of course, but if the SRA has a list of such firms, it’s unclear how it has been drawn up. Insofar as it relies on firms’ own written risk assessments, now a legal requirement, of course, that simply incentivises bad actors to start misleading the system, and/or themselves, on the first line. Firms that assess their own business as ‘high risk’ are now positively inviting the SRA to come and visit.”

 

This article was originally published by Money Laundering Bulletin on 18/06/20. You can read the full version on their site.

John Binns is a partner at BCL specialising in all aspects of business crime, with a particular interest in confiscation, civil recovery and money laundering under the Proceeds of Crime Act 2002 (“POCA”). His business crime experience includes representing suspects, defendants and witnesses in cases invoking allegations of bribery and corruption, fraud (including carbon credits, carousel/MTIC, land-banking, Ponzi and pyramid scheme frauds), insider trading, market abuse, price-fixing, sanctions-busting, and tax evasion. He has coordinated and undertaken corporate investigations and defended in cases brought by BEIS, the FCA, HMRC, NCA, OFT, SFO and others.