[1]By Legal Futures Associate Amiqus [2]
Regulation is on the rise and the sanctions landscape is constantly evolving, which can make avoiding complicity in international money laundering or criminal financing feel like a full time job. Law firms are, now more than ever, required to put the right policies and measures in place, and take the necessary steps to prevent money laundering – their processes being one of the key high-risk areas.
What is AML compliance?
Anti-money laundering is the concept that brings together regulation, specific laws and internal processes of a variety of parties which are all created, maintained and continually revised with the aim of preventing money laundering and financial crime.
Successfully complying with anti-money laundering means that these parties, in our case law firms, have taken sufficient steps to comply with the AML laws and regulations. By doing so, they are directly reducing the amount of money laundering occuring and are aiding in the global fight against financial crime.
Why is it vital?
When feeling frustrated by the burdensome process of keeping on top of AML regulation, it’s easy to forget why it is so necessary.
The outcome of laundered money has a real human cost. According to the Economist, £90bn passes through UK bank accounts each year supporting slavery, human and drug trafficking, gun crime, corruption and fraud. At the moment, criminals are sitting on more money than ever as a result of the pandemic.
Legal and conveyancing firms are at particular risk. Last December, the government published the National Risk Assessment of Money Laundering and Terrorist Financing 2020 report, which ranked the overall risk of money laundering involving lawyers as high.
No one would want the proceeds of crimes like these running through their accounts. But many firms still believe it can’t happen to them – wrongly. Complying with AML regulation is therefore key if you want to protect your firm from money laundering and from losing money to fraud.
What you need to comply with AML regulation:
1. Client due diligence:
- Exchanging Documents
WHAT IS IT: You will need a number of documents from your clients in order to fulfil the parameters of some checks. You may need to request different types of documents at different types of the process.HOW AMIQUS HELPS: The Amiqus platform helps you send or receive documents to/from your clients with ease via the embedded document transfer functionality. You can do this as many times as you need, at no extra cost. All documents are automatically scanned for viruses, and nothing will reach you unless it is safe.
- Client Data Safety
WHAT IS IT: A key aspect of every AML process is keeping your client’s data safe when gathering documentation and information from them. Manually collecting these via email, the post or in person can be highly unsafe and the general consensus amid UK regulators is that verified digital technology is better.HOW AMIQUS HELPS: The Amiqus platform comes with a unique inbuilt and customisable form functionality. You can use custom forms to gather any information from your client, and do so securely through an encrypted platform, instead of via email, which comes with inherent risks.
Simple forms can be used to gather your client’s bank account details for payment of free proceeds at the conclusion of a conveyancing sale. A more detailed form may be used to gather information for marketing a property for sale, or to gather some basic information from a client that you are going to be drafting a Will for.
- Watchlist Monitoring
WHAT IS IT: Guidance suggests firms should be applying enhanced due diligence and ongoing monitoring to all high risk clients. For each client that you are setting up ongoing monitoring, you should consider whether the level of ongoing monitoring should be standard or high.
HOW AMIQUS HELPS: The Amiqus watchlist check has an ‘ongoing monitoring’ option. This automatically re-scans PEPs, sanctions and adverse media databases every day. It is a powerful tool for keeping customer and enhanced due diligence information up to date, and for identifying high risk clients.
- PEPs and Sanctions check
WHAT IS IT: For proper AML compliance, you are required to establish procedures to identify PEPs and the level of risk that is associated with them. You should check whether the client is a PEP or a family member/associate of a PEP. If this is the case, further checking is required, such as looking into their source of funds. You should also take steps to check your client against the HM Treasury and the Office of Financial Sanctions Implementation consolidated list.HOW AMIQUS HELPS: Using Amiqus, you can complete customisable international photo ID verification and watchlist checks for PEPs, sanctions and adverse media screening. These are available with ongoing monitoring.
- Source of Funds
WHAT IS IT: It is good practice to check the source of funds (even if the matter is an occasional transaction). Collecting bank statements and other relevant documentation is useful for identifying the source of funds or the source of wealth of a client. It is vital in many cases to establish the reason or provenance for funds when conducting source of funds and source of wealth checks on PEPs, as part of enhanced due diligence. Furthermore, the LSAG guidance also considers these checks good practice as part of holistic client due diligence in general.HOW AMIQUS HELPS: Via the Amiqus platform, you can gather and verify bank account information and transaction history securely using our banking information check. Our check uses Financial Conduct Authority (FCA) regulated open banking technology. Banking information is provided in an electronic format so it’s even filterable by transaction type and amount. We also offer a fallback option. Our custom forms and document-request features mean you can establish a given reason for funds and combined with the banking information check offer strong support for source of funds/wealth investigation.
2. Staff and BOOMs Screening:
WHAT IS IT: You should not only perform correct due diligence on your clients, but also your staff and BOOMs. It is vital to do so both prior to their employment and during. This screening may include criminal record checks, credit checks, adverse media checks, reference checking and electronic identity verification.
HOW AMIQUS HELPS: You can run criminal record checks (Disclosure and DBS), photo ID checks and both identity reports and document transfers for proof of address through the Amiqus platform, to both verify the identity of BOOMs and check for convictions.
For AML frontline staff vetting you can additionally run credit reports, screening for politically exposed persons (PEPs), sanctions and adverse media, as well as pre-employment information and reference gathering.
It is possible to set up a secondary Amiqus account with separate user access to keep staff data separate from client data at no extra cost if that fits your internal processes better.
3. Audit trail
WHAT IS IT: Maintaining an audit trail is essential in order for you to be properly prepared when the auditors ring your doorbell. Keeping things well documented but clear and concise will help you avoid fines, and doing so digitally is your best bet against mistakes, lost data and duplication, particularly when many firms still process paper forms and hard copies of personal documents.
HOW AMIQUS HELPS: Amiqus securely holds all documentation and data in one place. You can provide view-only access to auditors, which means no more last-minute panic – audits will be a breeze, and keeping track of the information prior is no longer a hassle but a smooth process.
4. Risk Assessments
WHAT IS IT: Your AML risk assessments should be recorded somewhere and should detail the steps you take to avoid and combat money laundering. Regulators may ask to see these upon auditing. The LSAG guidance suggests conducting risk assessments on all new clients and matters, as well as completing a firm wide risk assessment (PWRA). Make sure to diligently include your sources, and reference your current processes and policies for high-risk clients or matters. This is vital for any size of firm.
HOW AMIQUS HELPS: The Amiqus platform allows you to seamlessly, within one system, complete, track and store risk assessments with the use of approved templates. Amiqus helps with writing firm-wide risk assessments by making the design, documentation and implementation of your processes easier.
If you’re interested in implementing an effective process for combating money laundering with Amiqus, get in touch with us at or book a quick demo. [3]
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