LSAG anti-money laundering guidance update: employee screening process

Our Member Benefits partner Amiqus looks into the Legal Sector Affinity Group's latest anti-money laundering guidance update.

In March 2023, the Legal Sector Affinity Group (LSAG) published the latest update of the guidance on anti-money laundering.

The purpose of the guidance is to assist solicitors and law firms understand their legal responsibilities as outlined in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

Screening Employees: A Risk-Based Approach

Section 9.4 of the LSAG guidance provides valuable insights into screening relevant employees before and during their employment. It underscores the importance of conducting thorough background checks tailored to the risk profile of the individual and their role within the organisation. Employee screening should be undertaken on a risk-basis, aligning the type and extent of checks with the responsibilities and access to sensitive information of the staff concerned.

Mitigating Risks and Ensuring Integrity

Implementing robust screening processes enables law firms to minimise the risk of inadvertently hiring individuals with a history of financial misconduct or involvement in illicit activities. By verifying identities, checking references, and assessing previous employment history, firms can build a workforce of high integrity, protecting their reputation and maintaining compliance with AML regulations.

Moreover, law firms must remain vigilant throughout an employee's tenure and be prepared to address any signs of suspicious behavior promptly. The LSAG guidance recognizes this need for ongoing monitoring and screening of employees. Regular assessments help ensure that employees uphold the required standards of integrity and remain compliant with AML regulations.

Leveraging Technology for Employee Screening

To streamline and enhance the employee screening process, legal firms can adopt digital solutions like Amiqus to automate various aspects of the employee screening process in line with the LSAG guidance, saving time and ensuring thorough due diligence.

Conclusion

By prioritising comprehensive employee screening processes aligned with the LSAG guidance, legal firms can strengthen their compliance measures and mitigate potential risks. Employee screening should be undertaken on a risk-basis, tailoring the checks to the responsibilities and access to sensitive information of the staff concerned.

In the pursuit of a secure and compliant work environment, legal firms can further explore the LSAG guidance and consult with experts to continually enhance their employee screening procedures.

If you’re interested in implementing an effective process for employee checks and background screening at your firm, you can contact Amiqus for more information.

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