By Published On: 21 May 20242 min read
  • Steven Hickling

Introduction

In this blog post, we’ll explore the key aspects of anti-money laundering (AML) regulations that apply to law firms in England.  As a law firm committed to upholding the highest ethical standards, we rely on our clients’ cooperation to meet our anti-money laundering (AML) obligations.  Let’s dive in!

What Are the Money Laundering Regulations 2017 (MLR 2017)?

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) came into force in June 2017. These regulations aim to prevent criminals from using professional services to launder money.

Key Obligations for Law Firms

  • Risk Assessment: Conduct a thorough money laundering and terrorist financing risk assessment specific to the firm.
  • Policies and Controls: Implement robust systems, policies, controls, and procedures to address AML risks.
  • Internal Controls: Adopt appropriate internal controls to monitor client activities.
  • Training: Provide AML training to all staff.
  • Beneficial Ownership: Comply with requirements related to beneficial ownership information.
  • Perform Customer Due Diligence (CDD), enhanced due diligence (EDD), or simplified due diligence (SDD) based on risk.
  • Follow specific requirements for Politically Exposed Persons (PEPs).
  • Ensure record-keeping and data protection systems meet regulatory standards.
  • If acting as a trustee, comply with additional obligations.

What We Expect from Our Clients

Provide Accurate Information

  • Clients must provide accurate and up-to-date identification documents. This includes valid government-issued photo IDs, proof of address, and any other relevant details.
  • Clients should disclose beneficial ownership information if applicable (e.g., shareholders, directors, ultimate beneficiaries).

Transparent Communication

  • Clients must be transparent about the source of funds for transactions. If funds come from a business, inheritance, or other sources, they should provide necessary documentation.
  • Clients should clearly state the purpose of transactions (e.g., property purchase, investment, estate planning).

Cooperate with Due Diligence

  • Clients should cooperate during the Customer Due Diligence (CDD) process. This includes answering questions, providing additional information, and understanding the need for due diligence.
  • If a client falls into a higher-risk category (e.g., politically exposed persons), they should be prepared for additional scrutiny (Enhanced Due Diligence (EDD))

Timely Responses

  • Clients should respond promptly to requests for information. Delays may hinder our ability to comply with AML regulations.

Report Suspicious Activity

  • Clients must report any suspicious activity they observe during their interactions with us. This includes unusual transactions, unexpected fund transfers, or any red flags.

Conclusion

By understanding and adhering to MLR 2017, law firms play a crucial role in combating money laundering. By working together, we can maintain the integrity of our services and contribute to a safer financial environment. Thank you for your cooperation in meeting our AML obligations.

Share this article