AML guidance shake-up to help conveyancers
The Legal Sector Affinity Group (LSAG), which includes all UK legal sector professional bodies and supervisors, has completed an extensive revision and redraft of its anti-money laundering (AML) guidance.
This replaces previous versions of the guidance and is currently pending approval by HM Treasury, although the guidance is currently available in draft form.
This draft version includes AML guidance released after the implementation of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) and incorporates subsequent amendments made by:
- The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (implementing 5MLD)
- The Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2020
The final HMT-approved guidance will be released in two parts.
The HMT approved version will also be reliable upon under provisions in the regulations e.g. regulation 21(10)(b)(ii) – determining what is appropriate with regard to the size and nature of your business.
Key changes to the guidance include:
- Expanded guidance on understanding of source of funds and source of wealth
- New section on technology – addressing the need for firms to understand the technology they are using in order to use it effectively
- An expanded section on risk assessments (firm-wide, client and matter)
- Revised, more granular contents section with embedded links
- Revised Legal Professional Privilege section
- Clarifications on high risk sectors, accepting cash into the client account, CDD on referrals from another legal practice, timing of CDD/exceptions
- Discrepancy reporting to Companies House, and other relevant registries from new duty/obligations introduced from January 2020 i.e. material changes to the regulations which are reflected in the guidance.
Law Society president David Greene said:
“The guidance includes fully revised and expanded guidance on risk assessments, expanded guidance on source of funds and source of wealth, an updated training section and a new section on how to effectively use AML-related technology to mitigate risk.
“In light of these changes, the legal profession should review their current AML governance, policies and procedures and update where appropriate.
“The Law Society will be on hand to support members in understanding and applying the guidance and we have a range of resources in place to support members including a series of webinars and our practice advice service.”