Anti-Money Laundering Annual Report 2023-24

Foreword by Paul Philip

It has been a year of change as additional regulatory requirements have increased the scrutiny on economic crime and our work to prevent it.

Solicitors play a key role in keeping money launderers out of legal services. As a Professional Body Supervisor, our focus has been on assessing and mitigating risk, whilst making sure that proper systems are in place to prevent money laundering in our profession.

We were pleased to see the Economic Crime and Corporate Transparency Act passed last autumn. The Act provides us with new powers to gather information and to impose unlimited fines for economic crime matters. It made explicit our ongoing commitment to the prevention and detection of economic crime in a new regulatory objective. We welcome these changes as they will strengthen our regulatory toolkit.

To reflect this new regulatory objective, this report sets out our work to prevent and address financial sanctions evasion. Financial sanctions are a means of penalising countries, regimes and individuals. Solicitors and law firms must have appropriate procedures in place to prevent them from breaching the sanctions regime, and in the last year we performed 55 sanctions inspections.

Our work to prevent money laundering continues to develop as the challenges and risks increase. In the last year we submitted 23 suspicious activity reports, performed 237 proactive inspections and 258 desk-based reviews, and brought enforcement action against a combined total of 78 firms and individuals.

We have increased our focus on assessing and mitigating risk. Following thematic work on assessing risk at firm level, we carried out a further thematic review into how firms assess risk at client and matter level. Accurately assessing the risk that a client or transaction poses, means that firms can undertake the correct level of customer due diligence (CDD) and mitigate risk through appropriate ongoing monitoring. As a result of our thematic review we published a warning notice, information for firms on assessing risk at client and matter level, and a template risk assessment for firms to follow.

In the coming year we will continue our efforts to prevent economic crime. Our priority is always to help solicitors and law firms stop criminals using our profession to launder money. We will achieve this by reinforcing the importance of anti-money laundering compliance and taking action when it is needed. We are grateful to the majority of the profession who support this work by complying with the regulations and operating as effective gatekeepers.

Paul Philip

Chief Executive

Solicitors Regulation Authority