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Whatever you do, do not say - Do Not Know!

Solicitors Regulation Authority Anti-Money Laundering Information

As we have said in our articles on the subject over the last 2 years, the Anti-Money Laundering focus by the Solicitors Regulation Authority is not short term, it is here to stay and will continue to be a focal point for the regulator.

In the latest part of their crusade on the subject, the SRA are asking firms to “Get ready to tell us about your work within scope of the money laundering regulations” via an email to a practice’s COLP or authorised signatory.

This email contains details on what information the SRA wants firms to send to them, as well as the timescale for when it should be sent. The requirement to submit the information is mandatory. The end date for submission of an on-line form that the SRA will provide for this purpose is the 31st of July 2022.

While that may seem like it is sufficient time to respond, firms will need to exercise caution.

Why should firms be cautious? After all, it’s an online questionnaire that doesn’t ask for any supporting documents (yet)…

The SRA has now been auditing firms for some time and have learned a lot from those audits. Some of what they have learned will have undoubtedly been used to benchmark AML risk indicators for potential poor AML policies, controls and procedures (PCPs) in firms, and that’s exactly what we at cpm21 think is being seen with the questions being asked in the data collection. They are targeted questions, where answers can be selected from “bands,” with an option of answering “Don’t Know.” As the headline to this article says, don’t answer any of the questions “Don’t Know.” That is the first red flag as far as the SRA are concerned as it strongly suggests that a firm does not have a handle on one or more of its AML responsibilities.

So, apart from “don’t know,” how the questions are answered could be key, because those answers may help the SRA decide which firms appear to have the most risk depending on their combined bandings… and maybe should have a desktop or on-site SRA audit.

Of course, there may be a firm out there who would welcome an SRA AML audit, and if that is yours then you can ignore our advice in this article.

Because of all of this, we recommend that firms that have received the SRA email download the questions now and start working on their answers to allow plenty of time to make sure the answers are correct and have been considered carefully. Another point to note is that sometimes the answers to questions from the SRA can be found on such documents as the firm’s PII application, PCRE submissions or a CQS application. That is not likely to be the case here, these questions are not “common” questions and as we said, need careful consideration.

If any firms need help with Anti-Money Laundering issues, then contact a cpm21 consultant, contact details are on our website;

https://cpm21.co.uk/CPM21-:-Professional-Management-by-Lawyers-People