"Flag It Up" campaign highlights money laundering signs

Solicitors are being urged to support Flag It Up, the UK Government’s anti-money laundering campaign, and "flag up" suspicions about potential dirty or laundered money.

The Legal Sector Affinity Group (LSAG), which is chaired by Ian Messer, director of financial compliance at the Law Society of Scotland, has partnered with the Government to highlight the threat posed to the sector by money laundering. Flag It Up supports lawyers to spot the "red flags" or warning signs of money laundering and encourages them to flag up any suspicions by submitting a suspicious activity report (SAR) to the National Crime Agency (NCA).

Some key red flags for lawyers to look out for include:

• whether clients are overly secretive or evasive;
• if the activity is inconsistent with the client’s known legitimate income;
• if a lawyer is being asked to act outside their usual speciality or has been offered an unusually high fee;
• if activities involve complex or illogical business structures that make it unclear who is conducting a transaction or purchase.

Knowing the red flags can help protect lawyers and their firms from being caught up in criminality and from the resulting reputational risk, fines and prosecution.

Flag It Up has been devised for lawyers and accountants but with a particular focus on solicitors, as the HM Treasury/Home Office National Risk Assessment 2017 identified that solicitors are the group within the legal sector which is at the greatest risk from being targeted by criminals, due to the work they do. The NCA’s National Strategic Assessment 2018 highlights that the scale of money laundering impacting the UK annually could potentially be in the hundreds of billions of pounds, and lawyers have a legal obligation under the Money Laundering Regulations 2017 to file a SAR when they spot something suspicious.

Mr Messer commented: “Criminals look to exploit the services of legal professionals to assist them – often unknowingly – in laundering the proceeds of serious and organised crime. Because solicitors often provide property transaction services, trust and company support services and operate client accounts, they are in a unique position to mitigate the risks of money laundering. By remaining alert and vigilant to the red flags and taking appropriate action, you can help tackle it.”

The campaign, which runs until the end of March 2019, aims to provide professionals with best practice guidance on how to protect their business reputation and ensure they are not caught up in criminality. For additional information about the campaign, or more advice on how to tackle money laundering, go to FlagItUp.campaign.gov.uk