From 1st October 2014, Money Laundering Reporting Officers (MLROs) who fail to complete consent suspicious activity reports (SARs) properly, will have them rejected under new guidance issued by the National Crime Agency. SARs disclosures which omitted either the reason for suspicion or a statement regarding the criminal property involved, would in effect be rejected, or “closed”. The SARs reporter would then be sent a notification letter stating that the submission had been closed. Despite this, MLROs would still have a legal obligation to make a disclosure before the “prohibited act” took place, and to obtain consent to avoid any liability under the Proceeds of Crime Act 2002 (PoCA). It is recommended that firms use SAR Online when submitting a consent request as this will prompt for certain relevant information. Firms should also ensure that the contact details held by the NCA for the appropriate individual at the firm are up to date, especially if they have not submitted a SAR for some time. For further guidance click here.
The Solicitors Regulation Authority (SRA) is stepping up its efforts to ensure solicitors firms do not become embroiled in money laundering activity and are compliant with the various regulations and legislation associated with anti money laundering compliance.
The legal sector is one of a number of areas of work that attracts organised criminals seeking to launder the proceeds of crime. Solicitors have a duty under the Code of Conduct to ensure their business complies with anti-money laundering legislation and the Proceeds of Crime Act.
The SRA will therefore be undertaking a specific piece of focus work starting now until May 2015, working with firms to ensure robust systems are in place to guard against solicitors becoming involved in money laundering. This will include closer engagement with those firms identified as most at risk, and providing support and guidance across the whole of the profession from large firms to sole practitioners.
Paul Philip, SRA Chief Executive, said: “Law firms often handle large sums of money, and this means they attract those who seek to launder the proceeds of crime. We want to work with the profession to ensure that all firms, no matter how large or small, have the systems in place to guard against money laundering and that they are compliant with the current regulations and legislation.
“We will also be testing the systems used within firms to report money laundering, and how widely these systems are known within each firm.
“We also want to ensure solicitors are meeting their legal obligations to report suspicious transactions to the appropriate authorities. The SRA will be taking a robust stance on anti money laundering compliance and will deal promptly with any firm that that transgresses the rules.
“Our work will focus initially on those firms deemed at highest risk, but all firms need to be aware of the issue. There will be serious consequences for those who fail to take their obligations seriously.”
The SRA will report their findings after the focus work is completed early next year.