The Solicitors Regulation Authority (SRA) has urged around 7,000 of its regulated firms to re-assess their processes now that the Fifth Anti-Money Laundering Directive (5AMLD) has come into force.
Despite the short lead time between the regulations being laid in Parliament on 20th December and coming into force today (10 January 2020), the SRA has remained insistent on the complete and immediate compliance with all regulatory change.
However, they also recognise the short time frame to make all necessary amendments and are planning on releasing guidelines in conjunction with a number of legal sector supervisors named in the regulations.
The Legal Sector Affinity Group (LSAG), including the SRA, will include guidelines on:
- a duty to collect proof of registration for entities (eg trusts and companies)
- a duty to inform the registry of any discrepancies in their information
- changes to client due diligence and enhanced due diligence
The regulator has also reminded its regulated firms that some of its own processes will now change. New applications for Beneficial Owners, Officer and Managers (BOOMs) will now need to provide a Basic Disclosure and Barring Service (DBS) check which shows applicants do not have any of the criminal convictions that would prevent approval.
Paul Philip, SRA Chief Executive, said:
“Money laundering supports criminal activity such as people trafficking, drug smuggling and terrorism. The damage money laundering does to society means that every solicitor must be fully committed to preventing it. The vast majority would never intend to get involved in criminal activities, but the reality is that poor processes can open the door to money launderers.
“This new legislation aims to further reduce the risk of law firms being used to launder money. Working with the Legal Sector Affinity Group, we will be providing a range of support to firms to help them comply.”
