AML Roundup June 2020 AML Certificate, SARs webinar and more

SARs are a crucial part of UK law enforcement and are a legal obligation for those working in the regulated sector.

We have partnered with the National Crime Agency to produce a webinar which will help you to produce high-quality SARs.

The webinar is largely focused on DAML (Defence Against Money Laundering) SARs, but will help in the submission of any type of Suspicious Activity Report.

You can access the webinar here. 

Earlier in the year we published the results of our Trusts and Company Services Providers (TCSP) thematic review.  This was an extensive piece of work which highlighted a real need for improvement in compliance with the Money Laundering Regulations, in TCSP work.  We would strongly encourage you to read the report in full and consider how the learnings might apply to your firm.

In July we will be starting work on our next thematic.  This time the focus will be on Politically Exposed Persons (PEPs) and we will be contacting a large number of firms working with PEP clients to take part in stage one of the review. Firms who took part in last years review may be asked to complete the initial questionnaire.

Under r.26 of the Money Laundering Regulations (MLRs) 2017, it is a criminal offence to act as a beneficial owner, officer or manager (BOOM), or as a sole practitioner, of a practice unit in scope of the regulations without Law Society approval.

Due to the Covid-19 crisis, the Disclosure Scotland service is currently only processing applications for people working on sectors deemed vital at this time. HM Treasury are content that, on a temporary basis, firms or new sole practitioners can provide a statutory declaration that the BOOM(s) does not have a relevant criminal conviction as part of the application.

Find out more here.

It is crucial that solicitors continue to look after their own health and safety and that of their colleagues and clients by following Government restrictions.  This does of course, present challenges when solicitors, limiting physical contact with clients, still need to carry out thorough ID and verification checks.  In response to this issue, we have produced guidance on carrying out non face-to-face ID and verification checks and you can find this in the practice updates section of our coronavirus updates page.

Firms were required to be compliant with the terms of the Fifth Money Laundering Directive with effect from the 10 January 2020.  There was a short lead in time between the regulations being laid in Parliament on 20 December and the legislation coming into force.  In recognition of this we agreed to take a proportionate and risk-based approach to non-compliance for a limited period after this date.

The new requirements have now had time to embed and we would like to take this opportunity to remind you of your regulatory obligations.

The UK Legal Sector Affinity Group (LSAG), of which we are a member, published a key changes document to help the legal profession comply with the new requirements.  These include, a duty to collect proof of registration for entities, a duty to inform the registry of any discrepancies in their information and changes to client due diligence and enhanced due diligence and you can  find further information and the full document on our website here.

The UK Legal Sector Affinity Group (LSAG), which includes the Law Society of Scotland and all the legal sector supervisors named in the Anti-Money Laundering (AML) regulations, has jointly published an advisory note, highlighting key AML risks and challenges for the legal profession associated with the Covid-19 crisis. It also includes information to help the profession comply with their ongoing obligations under the Money Laundering Regulations. You can find further information and access the advisory note on our website here.

The National Crime Agency consistently produces quality insight and information on money laundering and illicit finance which you can find on their website.

This month they have produced their latest SARS in Action May 2020

The have also updated the reporting routes and glossary codes which must be used when reporting and you can find the Glossary Codes Note document here.

The Glossary Codes and Reporting Routes document can also be found on the NCA website here

The NCA have also produced a publication identifying Indicators of Modern Slavery and Human Trafficking in the Legal Sector. Interestingly, the report draws attention to the fact that criminal defence family and immigration solicitors are most exposed to the signs of human trafficking.  Notably, these areas of law and practice fall outwith the scope of the money laundering regulations – which demonstrates how vital it is that all members of the legal profession remain alert and vigilant for the signs of criminal activity.

The European Commission has put forward a series of measures designed to further strengthen the EU's framework to fight against money laundering and terrorist financing:

To help support firms through the unprecedented circumstances and difficulties of the Covid-19 crisis, we extended the AML Certificate deadline by three months.

That extended deadline of 12 June is now almost upon us, and therefore we would strongly advise you to begin the exercise as soon as possible, if you haven’t already done so.

You can find everything you need to get started on the completion and submission of your certificate, including answers to frequently asked questions, a downloadable paper copy of the certificate, should you wish to prepare your data in advance before submitting online and completion notes with additional supporting guidance, on our website.

If you are likely to struggle to meet the extended deadline, please let us know as soon as possible by emailing us at aml@lawscot.org.uk.