Welcome to AML
The anti-money laundering landscape in the legal sector is changing and coming into ever more focus, with an increased awareness of the multitude of ways in which the legitimate services provided by legal firms can be used for illegitimate purposes. HM Treasury and the National Crime Agency in the latest National Risk Assessment clearly define the legal sector as being at high risk of Money Laundering.
The Law Society itself is regulated by the Office for Professional Body AML Supervisors (OPBAS) and in order for us to meet our statutory obligations as a Professional Body Supervisor we employ a range of tools to assess the risk of our population and of our individual members. These include thematic reviews, desk-based assurance reviews and specific file reviews via the AML Certificate. These tools ensure we not only supervise effectively, but also create more focused and relevant educational materials and training events in order to aid firms in compliance with their obligations.
Adopting a risk-based approach allows us to be robust, fair and responsible - balancing the commercial realities and the environment in which our members operate with our overarching legal responsibility to ensure our members are complying with their AML obligations.
These AML pages contain various aids to risk mitigation; key documents, risk templates, answers to some of commonly asked AML questions and much more.
The Money Laundering Regulations 2017 set administrative requirements for the anti-money laundering regime within the regulated sector. Regulation 12 states that the regulations apply to 'independent legal professionals'.
An independent legal professional includes a practice unit or a sole practitioner who by way of business provides legal or notarial services to other persons. It does not include solicitors employed by a public authority or working in-house.
The Proceeds of Crime Act 2002 establishes a number of money laundering offences including:
- principal money laundering offences
- offences of failing to report suspected money laundering
- offences of tipping off about a money laundering disclosure, tipping off about a money laundering investigation and prejudicing money laundering investigations
The Proceeds of Crime Act 2002 applies to everyone, although certain failures to report offences, and the tipping off offences, only apply to people who are engaged in activities in the regulated sector (including the legal profession).
The Terrorism Act 2000 establishes several offences about engaging in or facilitating terrorism, as well as raising or possessing funds for terrorist purposes. The Terrorism Act applies to all persons. There is also a failure to disclose offence and tipping off offences for those operating within the regulated sector.
We hold a dual role regarding the application of anti-money laundering legislation and regulation:
- The provision of expert guidance on anti-money laundering best practice and other financial crime-related issues, through inspections, our professional practice team, materials found on this website and through our dedicated AML audit function.
- Supervisory authority responsibilities in our capacity as the professional body for Scottish solicitors.
AML supervisory authority status has been ratified by Her Majesty's Treasury and is discharged through the use of the Solicitors (Scotland) Act 1980:
No person shall be qualified to practice as a solicitor in Scotland unless:
- The person has been admitted and their name appears on the roll of Scottish solicitors
- The person has a practising certificate issued by us
The Act gives disciplinary powers to us and entitles us to issue "accounts rules" regarding how client money should be handled by a solicitors practice unit.
- The Accounts rules are contained in our Practise Rules 2011, including a rule specifically requiring solicitors to "comply with the provisions of the Money Laundering Regulations" and to be able to "evidence compliance with the provision of part 7 of the Proceeds of Crime Act 2002 and also part 3 of the Terrorism Act 2000" (appendix 6)
- Wider standards of conduct for solicitors are contained within the Practice Rules 2011 which encompass such fundamental principles as "trust and personal integrity" and "competence, diligence and appropriate skills"
While we are committed to the education and support of our members in preventing the Scottish legal system being used to launder criminal or terrorist funds, we have a duty under the regulations to take appropriate action where members do not comply with the requirements of the regulations.
We discharge our supervisory duties and responsibilities by:
- Undertaking "deep dive" AML audits of larger firms
- Combining monitoring of AML compliance with monitoring of accounts rules compliance in its rolling financial compliance inspection regime, largely undertaken on its small to medium size member firms
- The bi-annual process of self-certification of AML compliance signed by the money laundering reporting officer of all member firms
The 2017 Money Laundering Regulations dictate that where “there is more than one supervisory authority for a relevant person, the supervisory authorities may agree that one of them will act as the supervisory authority for that person”.
We have agreed a memorandum of understanding with the Solicitors Regulation Authority, which assigns responsibility for AML supervision based on the location of law firms’ registered office.
For clarity, firms whose registered offices are in Scotland will be supervised for AML compliance by the Law Society of Scotland. The Solicitors Regulation Authority will supervise firms whose registered offices are in England or Wales for AML compliance. Find out more here.
AML-related complaints for prosecution go to the SSDT as a matter of professional misconduct, as per S.52 of the Legal Profession & Legal Aid Scotland Act 2007. Findings and SSDT outcomes can be found on the SSDT website.
Latest updates
AML SARs thematic review initial findings
The initial findings of our thematic review into suspicious activity reports (SARs) have revealed positive procedures are in place across firms, but further support and guidance is needed on training and the threshold for suspicion.
AML SARs thematic review: DAML spotlight
Our anti-money laundering (AML) team has highlighted defence against money laundering reports (DAMLs) as a key area of focus for firms, following the release of initial findings from its suspicious activity reports (SARs) thematic review.
AML inspection guide
We've put together a detailed guide to help members understand more about the AML inspections process and how to prepare for each type of inspection.
"All Too Familiar" AML training film released to members
All members now have free access to the anti-money laundering (AML) film “All Too Familiar”, a dramatised look at how firms can become unwittingly involved in money laundering.
Scottish firms’ AML-related work nears £700m
Almost £700 million of gross fees across Scottish legal firms in 2023 related to work falling under anti-money laundering (AML) regulations, analysis of the latest AML Certificate has shown.
AML annual supervisory report 2024
The Law Society of Scotland’s annual anti-money laundering (AML) supervisory report highlights the range of AML work undertaken between April 2023 and April 2024 to fulfill its supervisory obligations.
Amiqus ID
Amiqus ID is an encrypted online tool for client-onboarding and transaction checks