How to prepare an anti-money laundering audit for the SRA
With increased enforcement action from authorities over breaches of anti-money laundering (AML) regulations, it is easy to see why many firms are preparing for an AML audit. Access Legal regulatory director Brian Rogers answers frequently-asked questions about the process.
Can we put forward our external compliance consultant to discuss matters with the Solicitors Regulation Authority (SRA)?
You can, but it is likely that the SRA will also want to speak to people within your firm involved with anti-money laundering, including your money laundering reporting officer (MLRO), money laundering compliance officer (MLCO), compliance officer for legal practice (COLP) and other partners. They will look to get a full picture of your firm that a consultant may not be able to provide.
Can we use a template practice-wide risk assessment (PWRA) wording?
Yes, you can, but you need to make sure the template has been amended to suit your firm and everything has been completed appropriately. Firms often leave out transactions and delivery channels from the PWRA, but this is important if you provide services involving complex or high-value transactions. The SRA have lots of resources you can use and I’d recommend having a look because you can’t get better than what’s been provided by the regulator.
Do we need to risk assess every new client/transaction?
Yes, but the level of due diligence and assessment will depend on what risk they pose. If you consider them to be low-risk, you may then apply a different level of customer due diligence (CDD), otherwise you have to have a look at enhanced due diligence and everything else that goes with it.
Do we have to show how our policies, controls and procedures work in reality?
Yes, you need to make sure that things are working in reality, and that you are checking them, updating policies as things change, and making training available for staff as well. Then, if the SRA do come along, they will want to speak to a number of people in your firm and they will all be able to show that the policies work in practice.
What level of knowledge does our MLCO or COLP need to have of AML obligations?
They need to know effectively everything about money laundering. They need appropriate training – so keep an eye on the practice notes coming from the Law Society and things coming out from the SRA. The SRA now has a very good AML team and they are producing lots of good resources – so make sure both your MLCO and COLP keep up to date with these and keep their knowledge of AML regulations up to date.
