Campaign group Spotlight on Corruption chose an interesting week in which to release its few-holds-barred 87-page report provocatively entitled 'A privileged profession?'. The report, subtitled 'How the UK's legal sector escapes effective supervision for money laundering,' tentatively proposes giving the Solicitors Regulation Authority sector-wide - and UK-wide - powers to police money laundering compliance.

Publication was presumably timed to coincide with the parliamentary passage of the Economic Crime and Transparency Bill, which already proposes to give the SRA unlimited fining powers. But it also followed reports in the Gazette of the travails suffered by the owner of a small Midlands firm who found herself under suspicion of failing to tick a particular AML compliance box. The Solicitors Disciplinary Tribunal eventually threw out all charges against Maya Nisa-Zaman - but not before she had incurred £43,000 in legal costs and thousands more in lost revenue. 

To put it mildly, therefore, Gazette readers were not impressed by the suggestion that the profession somehow escapes AML supervision. As for extending the SRA's powers, a couple of forthright Gazette reader comments were read out at the launch event. 'It's not an invitation for the SRA to act as the Gestapo,' one attendee protested. 

Luckily expert attendees at the event (held under the Chatham House Rule) were able to subject the report to more sophisticated - and constructive - criticism. Among other things we learned that AML supervision in the UK stands up reasonably well compared with in Germany, which has more than 300 professional supervisors, and in the US, where there is no professional regulation for AML at all. And if we're talking about extending the AML regime, then perhaps social media and telecoms operators might be a more urgent target than the already regulated sector? 

Obiter's favourite suggestion was that the government should take the opportunity to throw out the current EU-based box-ticking regulatory regime and replace it with one that sets out what we want to achieve and leaves it to the profession to get there. 'Though that is not likely to be politically possible,' the attendee said with spectacular  understatement.

Topics