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Assumed AML checks leave Barristers and Chambers Vulnerable
Barristers and chambers in the UK could now be more vulnerable to money laundering activity, after a recent report showed that almost 30% of investigated law firms do not comply with anti-money laundering regulations.
The ‘AML Annual Report’, carried out by the Solicitors’ Regulation Authority (SRA), revealed that of the 224 firms inspected, 43 were compliant, 115 partly compliant and 66 were not compliant.
This partial and non-compliance poses a threat to the legal industry on the front of AML checks – But how exactly does it threaten barristers and their chambers?
The Money Laundering Threat to Barristers and Chambers:
Money laundering criminals adeptly target businesses like banks, real estate agencies and legal firms, allowing them to take advantage of large financial transactions and wash their money both efficiently and effectively.
In the UK every year, an estimated £100 billion of illicit funds flows through the country’s businesses and financial institutions, according to Transparency UK.
The legal sector is frequently a target for money launderers, therefore barristers and chambers need to be ever vigilant.
Both barristers and their clerks are vulnerable to involvement in money laundering at the point where they suspect or know that someone is involved in a money laundering operation.
If they fail to disclose their suspicion or knowledge or send a ‘tip off’ regarding suspicious activity to those involved, they are now involved in the operation and expose themselves to unlimited fines and a jail sentence of up to 5 years, or both
Case in point.
Earlier in November for Stratega licensed conveyancers, James Marshall and Jeremy Kotze, who were involved in one of the most serious cases the Council for Licensed Conveyancers (CLC) has ever seen.
Found guilty of breaching the CLC’s code of conduct and AML rules, the pair were permanently disqualified, fined £10,000 each and ordered to pay £44,000 in costs.
This subsequent involvement comes off the back of a failure to carry out the relevant AML checks which fall on the shoulders of all legal professionals from solicitors to barristers and clerks.
Too often, the required anti-money laundering checks are assumed to be the responsibility of the instructing solicitor, however barristers and chambers staff alike have a responsibility to carry out their own checks.
Therefore, leaving the responsibility for AML checks to the instructing solicitor exposes barristers and chambers to increased risk of inadvertently becoming involved in illicit schemes.
The legal profession’s vulnerability to money laundering underscores the critical importance of comprehensive anti-money laundering training to safeguard against involvement in such illegal activities.
Launch of NEW Anti-Money Laundering training
Having recognised the need for barristers and chambers staff to take AML procedures seriously, legal compliance specialists, we have recently released our new online Anti-Money Laundering training module.
Their training module details the risks that money laundering poses to barristers and chambers, alongside the offences that members and staff are capable of committing should they find themselves involved in the illegal activity.
Learners will gain knowledge on what money laundering is, various ways to identify it, and – crucially – how to avoid falling victim to it. It’s worth reiterating that failure to do so as a chambers member or clerk can result in an unlimited fine or a maximum prison sentence of 14 years.
The phases and warning signs of money laundering are also addressed, coupled with information on assessing risk and how to carry out client due diligence in 3 regimented stages.
This sector-specific edition is accessible to users for 12 months, concluding with a randomised multiple-choice exam which provides certification upon completion.