Money laundering: Failures continued for considerable period of time
A Surrey law firm has been fined £10,000 for breaches of the anti-money laundering rules in its training, approach to risk assessment and in a conveyancing transaction which produced £850 in fees.
QualitySolicitors Brett Holt accepted the fine by reaching an agreement with the Solicitors Regulation Authority (SRA) but said that a “significant proportion” of law firms had “struggled to achieve compliance” with the 2017 Money Laundering Regulations.
In the agreement, approved by the Solicitors Disciplinary Tribunal, Brett Holt accepted that in a property transaction in late 2017 it failed to undertake identity checks and retain copies of address verification documents.
It also failed to take appropriate measures between June 2017 and June 2018 to ensure staff were aware of the law relating to money laundering and terrorist financing and had been trained on the regulations.
Nor did the firm possess a risk assessment as required by the regulations between June 2017 and December 2018.
However, in mitigation not agreed by the SRA, Brett Holt said it had never been the subject of the disciplinary proceedings since it was set up in the 1960s, with the current partners in place since 1995.
It said the firm’s failures in terms of training and the risk assessment were a result of the new regulations coming into force; it had complied with the previous versions.
On risk assessments, Brett Holt noted that an SRA study of 400 firms’ anti-money laundering risk assessments in spring 2019 found 21% were not compliant, including 10% that were unable to produce a risk assessment at all.
“It is therefore clear that this is an area where a significant proportion of the industry has struggled to achieve compliance.”
Brett Holt said the failures in the conveyancing transaction were the result of a failure to make adequate checks, rather than any checks at all, and “the firm’s financial gain on the transaction was very modest, at £850”.
It said it had expressed its regret and rectified the shortcomings.
However, the SRA described the firm’s level of culpability as “moderately high” because the failures on risk assessment and training “continued over a prolonged period”.
The other rule breaches related to a conveyancing transaction “involving significant sums of money”.
The SRA said: “It was incumbent upon the firm, as a practice handling substantial sums of client money in the course of property transactions, to be alert to its obligations in respect of preventing money laundering.”
Brett Holt agreed to pay the SRA’s costs of £10,350.
Leave a Comment