Refreshed AML Client and Matter Level Risk Assessment templates

Introducing the new Client and Matter Level Risk Assessment templates

The Law Society of Scotland's anti-money laundering (AML) team is continually looking for ways to create, update and provide our members with a range of focused and relevant materials to aid practices in compliance with their obligations.

We're really pleased to launch a refreshed Client and Matter Level Risk Assessment (CMLRA) template for both natural and non-natural clients and matters, as well as accompanying comprehensive guidance notes to assist with completion. These can be found in the AML Toolkit section of our website.

The new templates are tailored towards assisting practices undertaking holistic risk assessments and due diligence at client and matter level in line with regulatory and Legal Sector Affinity Group (LSAG) guidance requirements.

How to use the templates

The AML team believes these refreshed templates and the accompanying guidance notes will assist with practices employing a more comprehensive and holistic approach to the completion and documentation of CMLRAs. This will ensure that the nature, background and purpose of each transaction is appropriately documented along with any identified potential risks.

When using these templates, practices should also provide internal guidance and training on the use of the template to ensure its appropriate use.

The questions outlined within these templates are not exhaustive and we encourage each practice to tailor the templates to suit their individual needs or the individual needs of each matter.

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

“If it’s not documented, it didn’t happen…”

A core principle of AML compliance is taking a risk-based approach and comprehensive CMLRAs play an essential part in the application of a risk-based approach for all in-scope matters of the money laundering regulations.

To effectively apply a risk-based approach, it is pertinent to identify all of the potential risks involved in any in-scope matter and ensure these are adequately documented. The level of due diligence applied to the matter should be based on the particular risk factors documented within the CMLRA and the assessment of overall risk associated with the client/matter.

Well documented CMLRAs will not only assist with the compliance of the money laundering regulations, it will also help practices to demonstrate compliance upon request from both the Law Society of Scotland, as your AML supervisor, and other relevant authorities such as law enforcement.