Concerns raised over AML Certificate data accuracy

Scottish legal practices have been urged to improve the accuracy of their Anti-Money Laundering (AML) Certificate data or risk disciplinary action.

The Law Society’s AML sub-committee has called on firms to thoroughly check their data before submitting their certificates after finding incorrect information had been provided by more than 70 firms, around 10% of supervised practices, this year.

Errors included duplicate, inflated or conflicting figures, and failing to provide the required jurisdictional information when citing figures for non-UK work. All practices whose certificates contained errors have been contacted by the AML team.

The AML Certificate is now in its sixth year and a mandatory annual process for all practices that fall under Money Laundering Regulations. It enables the Law Society to understand risks across the sector and at an individual firm, client and file level.

Failure to submit a certificate can result in disciplinary action being taken the AML sub-committee. Inaccurate data may also contribute to a firm being referred to the sub-committee and to a risk-based inspection of a practice by the AML team.

Charlie Fraser, convener of the Law Society’s AML sub-committee, said: “Completing the AML Certificate is an important exercise for all firms in the regulated sector. Submitting accurate data is crucial for effective risk management and supervision, and errors take a significant amount of time to investigate and correct. The AML sub-committee takes appropriate and proportionate action against firms that fail to lodge their certificates. It may be that firms that repeatedly provide incorrect information are also referred to the sub-committee to explain the inaccuracies.”

The AML team aims to assist practices to complete their AML Certificate as accurately as possible through a number of measures, including: FAQs and guidance; an advance copy of the certificate around three months prior to the portal opening, along with notes of any changes; and regular reminders during the submission period.

Firms with further questions can contact the AML team at aml@lawscot.org.uk.