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Anti Money Laundering (AML) violations in England & Wales reported to the Solicitors Regulation Authority (SRA) dropped by 21 to 252 in the financial year 2021–2022 despite the sanctions drive.
The National Crime Authority (NCA) received twenty Suspicious Activity Reports (SARs) from the SRA in the tax year, totaling GBP149M of possible illicit cash. This number is also much less than the last year when the SRA sent 39 similar reports to the NCA.
The SRA has greatly boosted the resources it allocates to monitoring AML compliance during the past two years. It performed 109 desk-based assessments and 163 inspections of businesses throughout the period, leading to 140 businesses coming into full compliance, according to SRA Chair Anna Bradley. The SRA’s 6,500 regulated law firms reported that failing to complete client due diligence as well as risk assessments, checking sources of funding, and not recognizing clients were the most common compliance failures.
The enforcement of severe sanctions against Russian firms is likely to be reflected in a similar report for the fiscal year 2022–2023. According to Bradley, the SRA has indeed increased its efforts to ensure that lawyers are aware of and fulfill their duties to fulfill the monetary sanctions regime, with updated instructions and data on threats and red flags. Additionally, it undertook a project to select a sample of businesses having exposure to the Russian market as well as to check their customer lists for ‘designated persons’—individuals who are the target of financial penalties.
According to the organization, it is extremely crucial for firms’ fee-earners to be conscious of all parties engaged in transactions including a beneficial owner, to make sure they are adhering to the sanctions regimes. A quarter of the companies under examination did not address the issue of making sure their customer is not the target of financial penalties. The SRA states that it intends to publish more tips in November 2022 to assist companies.
“In the coming year, we will continue to work proactively to make sure we help firms we supervise to comply with sanctions legislation, stepping in to take action where they don’t,” Bradley added.