Thursday, June 27, 2019

You don’t have to be based in London to get caught up in money laundering!

Money laundering has been very much in the news recently.

Some of the stories include the Solicitors Regulation Authority (SRA) announcing the results of its thematic review into law firms that deal with trust and company services work, where it is pursuing 26 firms that fell below the required standards. There has also been an announcement that the SRA will be reviewing the anti-money laundering arrangements in hundreds of other law firms, as well as news that the police are using their new powers by issuing Unexplained Wealth Orders (UWO) where the source of funds is questionable. 

Two UWOs have recently been issued, one in relation to a Politically Exposed Person who spent £16m in Harrods over a ten-year period and bought a house in Knightsbridge for £11.5m and a golf club in Ascot for £10.5m; the other UWO was issued to offshore companies that purchased three London properties worth £80m.

As London becomes too ‘hot’ for money launderers, it is likely they will start to head to the regions to try and get away with their activities, so it is imperative that if you operate outside London you and your staff are alert to this.

When we review files for firms, we often see blank or incomplete AML risk assessments, which clearly shows a lack of attention to key procedures and exposes the firms involved to the risk of getting caught up in money laundering activities.

All law firms, whether based in or outside London, must ensure they do all they can to comply with the Money Laundering Regulations and deter money laundering; the penalties of not doing so are significant, so getting it right now will be far better than getting caught and punished later!

Author: Brian Rogers