The Rotherham-based firm was fined for failing to ensure it had relevant documentation in place to prevent activities relating to money laundering and terrorist financing as required by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017).
The firm carries out conveyancing work. It is, therefore, an ‘in scope’ firm for the purposes of the MLRs 2017.
In 2023, the SRA’s anti-money laundering (AML) proactive supervision team carried out an AML inspection of the firm to assess its compliance with the MLRs 2017. In January, an SRA AML Associate notified the firm that they had concerns about the firm’s compliance with requirements for a documented firm wide risk assessment (FWRA), its policies, controls and procedures (PCPs) and client and matter risk assessments (CMRAs). None of the six live files reviewed during the inspection had CMRAs carried out on them.
These concerns led to a referral to the SRA’s AML investigation team. The firm was provided with guidance, and it took steps to rectify the issues and bring itself into compliance with the MLRs 2017.
It was discovered that between 2017 and 2023, the firm failed to have in place a documented assessment of the risks of money laundering and terrorist financing to which its business was subject (a firm-wide risk assessment (FWRA)) pursuant to Regulation 18(1) and 18(4) of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017).
Between 2017 and 2023, the firm failed to establish and maintain fully compliant policies, controls, and procedures (PCPs) to mitigate and effectively manage the risks of money laundering and terrorist financing, identified in any risk assessment (FWRA), pursuant to Regulation 19(1)(a) of the MLRs 2017, and regularly review and update them pursuant to Regulation 19(1)(b) of the MLRs 2017.
It also failed to have in place a process to assess the level of risk, as required by Regulation 28(12)(a)(ii) and Regulation 28(13) of the MLRs 2017. The firm was, therefore, unable to demonstrate that the extent of the measures it had taken to satisfy the requirements of Regulation 28 was appropriate, as required by Regulation 28(16) of the MLRs 2017.
In doing so, to the extent that the conduct took place between October 2011 and November 2019, the firm breached outcomes 7.2 and 7.5 of the SRA Code of Conduct 2011 and Principles 6 and 8 of the SRA Principles 2011, and to the extent that the conduct took place from 25 November 2019, the firm breached Principle 2 of the SRA Principles 2019 and Paragraphs 2.1(a) and 3.1 of the SRA Code of Conduct for Firms 2019.
The firm was directed to pay a financial penalty of £11,232 and ordered to pay costs of £1,350.
Read the full SRA report here.