The SRA Business Plan for November 2022 to October 2023… Keeping firms on their toes…

The SRA have published their latest “business strategy,” and something that is no surprise catches the eye immediately regarding their continued approach to their Money Laundering obligations. While the obvious point to make firms nervous is the final one below, they should also note some of the other ones that the SRA will most likely expect to see in Money Laundering Policies Controls and Procedures and Practice Wide Risk Assessments.

The excerpt from the business plan document follows;

“Between November 2022 and October 2023, we will:

• Continue to strengthen our approach to preventing money laundering and financial crime, including through proactive supervision, and investigation and enforcement activities.
• Respond to changes set out in HM Treasury’s review of AML and supervision.
• Lead projects to understand areas of responsibility that we may receive through new legislation, potentially ensuring quality of suspicious activity reports.
• Check the client lists of a sample of firms with exposure to the Russian market for potential sanctions breaches.
• Carry out a thematic review into compliance with the financial sanctions and licensing regime to seek to understand the challenges faced by law firms and whether we can helpfully provide guidance in this area. 
• Respond with agility to changing national and international sanctions and any other relevant changes to the external environment.
• Continue to refine our risk rating methodology for firms through our capture of new information about money laundering risks, allowing us to proactively target our supervision. 
• Carry out two AML-focused thematic reviews to build understanding of how firms are dealing with specific issues in practice. 
• Build our supervision programme to increase numbers of law firm inspections and desk-based review activity.”

So, we’ve highlighted the five that firms should particularly watch out for in bold above.

Why should solicitors firms watch out for these?

Well, let’s deal with them one by one.

1.  Respond to changes set out in HM Treasury’s review of AML and supervision.

Any changes here may have a direct impact on how the SRA approaches audits and what firms can expect from them, especially if the Legal Sector Affinity Group (LSAG) amends its guidance.

2. Carry out a thematic review into compliance with the financial sanctions and licensing regime to seek to understand the challenges faced by law firms and whether we can helpfully provide guidance in this area.

Whenever the SRA carry out a thematic review it always seems to “trickle” down into their activities. This review should be watched out for in case firms need to modify their file opening and client and matter risk assessment procedures.

3. Continue to refine our risk rating methodology for firms through our capture of new information about money laundering risks, allowing us to proactively target our supervision.

And by proactively targeting supervision, this will include desk and office-based audits of solicitors firms.

4. Carry out two AML-focused thematic reviews to build understanding of how firms are dealing with specific issues in practice.

This point will almost certainly affect what the Regulator will expect to see from a firm’s PCPs and PWRA. It may stem from what they consider they have seen as best practice in firms they have audited.

5. Build our supervision programme to increase numbers of law firm inspections and desk-based review activity.

It is already apparent from the advertisements from platforms such as Linkedin that the SRA are recruiting more people for their Money Laundering Directorate. This will inevitably mean more capacity for them to audit firms…

There are a lot of things in the SRA business plan 2022/2023 but these AML linked objectives are where firms really need to be “on their game” with…

If your firm needs help with its Anti-Money Laundering Compliance, then contact Wayne Williams or Paul Jones at cpm21 today.