Anti-money laundering: CQS firms not complying
The Solicitors Regulation Authority (SRA) has fined a South-East London law firm £114,000 for anti-money laundering (AML) failures, one of the largest to date.
Amphlett Lissimore Bagshaws – which trades as Amphlett Lissimore – failed between December 2019 and March 2024 to maintain fully compliant policies, controls and procedures (PCPs) and to conduct client and matter risk assessments (CMRAs), as required by the 2017 Money Laundering Regulations.
The shortcomings were identified in a desk-based review carried out by the regulator’s AML proactive supervision team.
With the SRA’s help, the firm brought its PCPs into compliance but admitted it did not have a CMRA form or process in place. It has now rectified this.
Applying the SRA’s fining guidance led to a figure of 2% of Amphlett’s annual turnover, £114,006. This reflected that the breaches “persisted for longer than was reasonable” and “had the potential to cause harm to the public interest and to public confidence in the legal profession”.
The firm’s full co-operation with the SRA’s investigation and the remedial action since taken mitigated the misconduct.
Though the maximum fine the SRA can impose on traditional law firms is currently £25,000, Amphlett is an alternative business structure and the SRA can fine them up to £250m.
Amphlett was also ordered to pay costs of £1,350.
It is just the latest of a steady stream of fines the SRA has handed out over the last couple of years to firms that have not been able to show they comply with the regulations. PCPs and CMRAs have been the common failures, along with not having in place a firm-wide risk assessment.
A recent Legal Futures investigation highlighted how many of these firms are members of the Law Society’s Conveyancing Quality Scheme and/or Lexcel scheme, raising questions about how rigorously the standards – which both require AML compliance – are policed. Amphlett Lissimore is a member of both.
Since our last round-up of fines, there have been three more – £10,719 for Birmingham firm JR Jones, £6,362 for O’Haras in Poole and £2,137 for Richard Kanani & Co in Farnham. All are also members of CQS.
In separate news, the threshold for submitting a defence against money laundering (DAML) suspicious activity report (SAR) will rise from £1,000 to £3,000 on 31 July.
These means lawyers will not commit money laundering offences if the value of the suspected criminal property in the proposed transaction is less than £3,000.
In a notice to its regulated community, the Council for Licensed Conveyancers pointed out that this meant firms could return money to a client/customer to end the business relationship without committing a criminal offence if the value is below £3,000.
“This new threshold likely covers most payments on account that CLC practices receive during conveyancing transactions.”
If only they’d publish the details of those firms who weren’t fined and who passed the audit.