Manager Faces Personal Penalties After AML Breach
In a recent notice published by the Solicitors Regulation Authority (SRA), it was stated that a former partner and manager of a large London law firm was sanctioned for his anti-money laundering failures. He was fined a total of £17,500 with an additional £3,500 in costs. He has agreed to pay these charges. The sanction is concerning the same matter in which the firm agreed to pay a fine of £232,500 following an agreement with the SRA in January. This was considered one of the biggest fines ever imposed by the regulator regarding several money-laundering breaches.
These breaches included the failure of correctly undertaking complete customer due diligence, despite these efforts presenting the risks of terrorist financing, money laundering or any other evasions of compliance. It was also revealed that he had not undertaken the mandatory training which is required by AML regulations. He admitted to his lack of understanding at the time and accepted the responsibility for the “gaps in his knowledge”.
The firm involved stated that they had cooperated with the investigation carried out by the SRA and acknowledged the incompetence regarding their due diligence and training. At present, new IT systems have been put in place with adequate and centralised record-keeping to prevent such breaches from reoccurring.
The former partner and manager involved said he assisted in the investigation and admitted to the rule breaches. Since then, he has undertaken comprehensive AML and accounts training.
The regulator has made it clear that it expects firms and those who hold client responsibility to hold their obligations of preventing money laundering in high regard and be more diligent.
Increasingly, it is becoming a requirement for firms to demonstrate their knowledge and understanding of regulatory requirements and present their compliance by providing documents and their submission of files audits and staff interviews. At AML and Compliance, we strive to continuously assist firms in this enquiry process.
There are many firms that are dealing with these procedures in-house without sufficient understanding, resources, or time. This presents a challenge to supervisors, compliance officers and their overall business. As compliance with AML regulations may not be as simple as it appears, expert advice and guidance are an integral part of ensuring your firm achieves a status of compliance and maintains it.
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By working with AML and Compliance, businesses and their owners can be comfortable that regulation is taken care of, enabling them to focus on other essential elements knowing that their compliance structure will not let them down.
Our anti-money laundering risk assessments provide firms with valuable insight into their businesses. They provide an overview of risk and highlight the issues within the business. The risk assessments provided by AML and Compliance are performed to the most meticulous standards; within this process, we factor in all the considerations which impact the staff, clients, operations, and finances of the business.
If you believe your firm may be at risk or you wish to confirm that your firm is achieving the required standards, you can rest assured that our team will bring the level and knowledge and expertise to perform a valuable risk assessment exercise that protects the business at times. You can also visit our partner site, The Strategic Partner, to find out about the range of compliance solutions provided there.
Anti-Money Laundering Risk Assessments
A vital part of Anti-Money Laundering (AML) Regulations is for a business to undertake a formal risk assessment. The predominant reason is to identify, manage, and eradicate the potential for the business to be caught up in money laundering.
Regardless of the size of your business and the complication of your structure, a Risk Assessment must be performed. We work with businesses of all sizes and across all sectors and multiple jurisdictions.
What are the main factors to an AML risk assessment?
An effective risk assessment must include:
- A review of the business’ approach to AML and its policies and procedures.
- A clear understanding of the operation of the business
- An understanding of the clients and where potential risks may arise
- Engagement with staff in order to gather the appropriate information to assess risk and how they are and should be managed
- Identifying the geographical locations where risk could be enhanced and delivering solutions to reduce such risks
- A review of the work types and the risks associated with each of them in order to take action and reduce risks where they arise
- A review of the existing transactions that a business undertakes, identifying the risk and the action to reduce or remove risk from future processes of business
- A review of the process of money management and finances to ensure that businesses are aware of the potential causes of concern and ensuring that the company is able to take action to remove or reduce the risk.
- A review of the knowledge obtained by the staff and identifying where enhancement is necessary
- Considering the application of policies and where they need to be enhanced, ensuring full implementation
- Considering other areas of risk across a business other than AML related areas (business external risks and part of a risk assessment is to take this into consideration)
Our Compliance Services
If you are concerned that your current AML policy is out of date, not robust enough, or you simply want to review your processes and adequately train your staff, please get in contact with our team of experts that have years of experience in this field.
We will work with you to create bespoke and specialist policies that are tailored to your company, and we will help to educate your staff on their obligation.
Call us on 0203 985 8553 or click here for more information about our services.