Treasury-approved guidance on how to comply with the new anti-money laundering regime coming in to force today may not be available for months, the Solicitors Regulation Authority admitted. However it said that its enforcement activity will take into account the 'limited time that firms have had to prepare' for the fifth Anti-Money Laundering Directive.
Regulations implementing the directive, the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 were published just before Christmas, realising fears that firms would have little time to prepare. About 7,000 SRA-regulated firms are caught by the regulations.
In a statement today, the SRA said the new requirements include:
- 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 new regime will also require new applicants to be registered as beneficial owners, officers and managers (BOOMs) to provide a Basic Disclosure and Barring Service (DBS) check for criminal convictions.
The Legal Sector Affinity Group (LSAG) - which includes the SRA and other legal sector supervisors named in the regulations - is drafting updated guidance on the regulations. 'This will require the approval of Treasury and will be made available in the coming months,' the SRA said. In the meantime, summary guidance will be available from today.
Although the legislation requires firms to be compliant from today, the SRA said its enforcement activity would take into account the limited time that firms have had to prepare.
Paul Philip, SRA chief executive, said the regulator would provide 'a range of support' to help firms comply: 'The damage money laundering does to society means that every solicitor must be fully committed to preventing it,' he said. '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.'
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