Getting the most out of our new AML templates

Our AML Risk Manager, Dale Trahms, explains how to make the most of the recently refreshed AML PCP and CMLRA templates.

As the Law Society’s anti-money laundering (AML) team, we’re continually looking to create and keep up to date a range of focused and relevant materials that aid practices in complying with their AML obligations.

Most recently, we’ve launched a refreshed AML Policies, Controls and Procedures (PCP) template, as well as new Client and Matter Level Risk Assessment (CMLRA) templates for both natural and non-natural clients and matters. These templates can all be found in our AML Toolkit.

AML PCP template

The new AML PCP template was created off the back of the findings of our recent thematic review on AML PCPs, which identified a number of areas where practices could improve. The new template is aimed at assisting members to comply with both their regulatory requirements and Legal Sector Affinity Group (LSAG) guidance.

We anticipate and hope that the template will help practices to construct written, established and maintained PCPs that will help to identify, manage and mitigate risks identified in Practice Wide Risk Assessments.

CMLRA templates

Similarly, the new CMLRA templates are tailored towards assisting practices undertaking holistic risk assessments and due diligence at client and matter level in line with regulatory and LSAG guidance requirements. The templates are accompanied by comprehensive guidance notes to aid completion, and we believe that this will help ensure that the nature, background and purpose of each transaction is appropriately documented along with any identified potential risks.

How to use the templates

Each practice is encouraged to tailor the templates to fit their needs.

For example, the AML PCP template should be adapted to suit a practice’s individual circumstances, business, size and nature, so practices with a significant geographic reach may wish to include a section on how fee earners should approach these types of overseas matters practically. Whereas a practice who solely deals with residential conveyancing may find that not all of the sections included in the template are appropriate or relevant.

Of course, there is information that must be included by all practices in their AML PCPs and further details on this can be found within Regulation 19 of the Money Laundering Regulations and Section 4.8 of the LSAG guidance. Our PCP thematic review results also explore these requirements, offering examples of good practice and we would encourage all practices to read the findings and examine what areas they could make improvements.

Likewise, the questions outlined in the CMLRA templates are not exhaustive and each practice should tailor the templates to suit their individual needs or the individual needs of each matter. In addition, practices should also provide internal guidance and training on the use of the template to ensure its appropriate use.

Further information on what must be included within your client and matter risk assessments can be found within the risk factors to consider of LSAG section 5.

Our supervisory expectations

It’s important to remember that the templates are there to aid compliance and should not be solely relied upon. While the money laundering regulations provide for compulsory requirements, not all aspects of the templates will be relevant or applicable to every practice, so it’s important to tailor your templates to match your business.

Well documented and up-to-date PCPs and CMLRAs will not only assist with the compliance of the money laundering regulations, they will also help practices to demonstrate compliance upon request from both us at the Law Society, as your AML supervisor, and any other relevant authorities, such as law enforcement.