A top British regulator is going to investigate 7,000 firms to ensure they are compliant with the 2017 Money Laundering Regulations.
The Solicitors Regulation Authority (SRA) made the decision after an investigation in March found that 21% of the 400 law firms checked were not living up to the rules set out in the regulations. These did either not address the risks or, when asked, sent the wrong form to the SRA.
Moreover, 64% of firms were using templates and their assessments were usually of a lower standard.
The SRA was also concerned that too many of them had sent in assessments that were recently recent, potentially suggesting that the polled firms may have only created ones to respond to the SRA’s request.
Paul Philip, chief executive at the SRA, 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 poor processes open the door to money launderers.
“A call from us should not be the prompt for a firm to get their act together. You need to take immediate action now if you are not on top of your money laundering risks. Where we have serious concerns, we will take strong action.”
The news comes at the same time as Finance ministers around Europe have asked the European Commission to set up an anti-money laundering authority.
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