Insurance giant’s ABS hit with fine for money laundering failure

Anti-money laundering: Risk assessment deadline missed

The alternative business structure owned by global insurance services firm Crawford & Company has been fined for failing to confirm that it had a compliant anti-money laundering risk assessment.

It is in the second batch of firms sanctioned by the Solicitors Regulation Authority for the failure.

Crawford describes itself as the world’s largest publicly listed independent provider of claims management and outsourcing solutions to carriers, brokers and corporates, and has been building up its ABS, which is headquartered in Liverpool, since 2016.

In December 2019, the regulator wrote to the 6,500 law firms that fell within the scope of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

It asked for a declaration that they had a compliant firm-wide risk assessment in place to identify and assess the business’s risks of money laundering and terrorist financing.

The SRA asked them to complete the declaration by 31 January 2020.

By April 2020, a significant number had not done so but follow-ups were delayed due to the start of the pandemic.

The SRA named six firms last month that only provided their declarations in March or April 2021, for which it fined them each £800 and ordered to pay costs of £600.

Another seven have now been fined the same amount for the same reason, with Crawford & Co Legal Services by far the most high-profile to date. The others are Law Together and AB Corporate, both in Manchester, Telford firm Picasso Legal, Hole & Pugsley of Tiverton, Norwich’s Lake Jackson and St Helens practice Smooth Law.

In a separate development, the chair of the Law Society’s money laundering taskforce, Amasis Saba, has complained about the suspicious activity reports (SARs) regime being viewed “solely as a numbers game”.

Lawyers have long been criticised for the relatively small number of SARs they make, but in an article written for the National Crime Agency, Mr Saba said there was “little recognition for the fact that a lot of the work of the sector goes unsung because work and potential clients are turned away but, very correctly and subject to careful review, are not reported due to privilege”.

He continued: “At the same time, valuable resources are wasted with reports which provide next to no value to law enforcement to ensure technical compliance.”

Mr Saba welcomed the government’s review of the effectiveness of the SARs regime and said the evidence showed the number of lawyers aligning themselves with criminals was “genuinely the thinnest sliver”.

But he added: “Regardless of the pace of change, the legal sector cannot be complacent or naïve. There are criminals across the country buying property, establishing trusts, using corporate vehicles and engaging the legal sector to help them.”

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