Coronavirus: AML warning
Criminals are exploiting the coronavirus crisis and law firms may be more susceptible because of the financial pressures they are under, the group that oversees the legal profession’s response to money laundering and terrorist financing issues has warned.
The Legal Sector Affinity Group (LSAG) – which includes all the UK’s main legal regulators – said criminals would look to take advantage of the Covid-19 outbreak, such as the difficulties with undertaking customer due diligence where clients cannot be met face-to-face.
A newly published advisory note on Covid-19 [1] said the economic downturn caused by the pandemic may make legal practices “more susceptible to financial difficulties or other pressures, which creates risk and potential weaknesses for criminals to exploit”.
It urged practitioners and firms to be particularly alert to several risks in new or prospective customers:
- Being asked to work with unusual types of client or on unusual types of matter;
- Resistance from a client regarding compliance with due diligence checks, for example being pressured to forego necessary due diligence checks or to “speed up” the process;
- Becoming involved in work that is outside of the practice’s or practitioner’s normal area of experience/expertise – without full understanding of the money laundering and counter terrorism risks associated with it;
- Any attempt to gain access to your client account where not accompanied by the provision of legal services; and
- Transactions where the business rationale for the transaction is not clear.
“Always ensure that you are comfortable as to your understanding of the matter, including its purpose and why it is happening in the particular way it is happening,” the LSAG said.
The note also provides advice on identification and verification during the crisis.
In other coronavirus-related news, the Association of Professional Support Lawyers has published a “simple set of suggested modifications” [2] to the Law Society formulae and code, and solicitors’ undertakings in property transactions.
The goal is to reduce the time spent negotiating bespoke modifications, but aims to keep deviations from standard practice “to a bare minimum”. The association said that “widely drafted caveats and qualifications relating to Covid-19 should be resisted because they may lead to uncertainty and loss of trust”.
The Inns of Court College of Advocacy has published ‘Principles of remote advocacy’ [3] to advise advocates on the best way to use their skills of communication and persuasion at a time when almost all hearings have gone online.
“Fortunately, we already have some experience to draw on,” it said. “In civil and criminal courts, ‘paperless’ working has already been taking place, so that advocates have begun to learn some of its challenges.
“In other areas such as arbitration and international litigation, there is already experience of remote hearings and cross-examination of distant witnesses by video. Courts and advocates have been building on these experiences, and rapidly gaining experience of the skills required to deal effectively with remote hearings.”
Cornwall law firm Parnalls is publicising its ‘mobile document signing team’ to help clients execute and sign legal documents during social distancing.
“Whilst maintaining the required two metres apart, our mobile team can attend your address and witness the signature of your will or other legal document.
“We can witness signatures through a window or even over a garden fence provided that we are in ‘line of sight’ and outside…
“Furthermore, if Covid-19 is causing you difficulties in obtaining a witness for any other matter such property transfers, statutory declarations, mortgages or any other deed that requires a witness, then our mobile team can assist from a safe distance.”
Conveyancing technology company InfoTrack has made its eSignature product ‘SignIT’ [4] free to use for all of its clients until the end of May.
SignIT, backed by DocuSign, allows law firms to obtain client signatures safely and efficiently from within the InfoTrack platform.