Law firms are generally doing well on detecting and preventing money laundering – but there is no room for complacency, the Law Society has warned.
The Financial Action Task Force (FATF), an inter-governmental body created to investigate financial crime, is expected to scrutinise the UK in 2018, with speculation the legal profession will face added scrutiny over and above other sectors.
The taskforce covers 34 financial jurisdictions and monitors the progress of members in implementing measures to counter financial crime.
Its report on money laundering and terrorist financing in July 2013 said the legal profession was proving ‘very attractive’ to organised crime.
EU member states have until mid-2017 to implement the fourth money laundering directive, which will pass into EU law within the next few weeks.
The directive will, for the first time, oblige EU member states to keep central registers of information on the ultimate ‘beneficial’ owners of corporate and other legal entities, as well as trusts. Lawyers will need to be more vigilant about suspicious transactions made by their clients.
The definition of politically exposed persons will be widened for carrying out enhanced due diligence.
The Society’s anti-money laundering policy adviser Scott Devine told attendees at the Legalex conference in London this week there was potentially a ‘short time bedding in a new regime before the FATF comes knocking on our door’.
The Solicitors Regulation Authority has nearly finished visiting 500 firms as part of efforts to ensure they have robust systems in place to guard against involvement in money laundering, and are compliant with current regulations and legislation.
Devine said early indications suggest firms were ‘pretty good overall’, though there were incidents of poor behaviour and some areas requiring attention.
The SRA’s report is expected to be published in September.
6 Readers' comments