VERIFY 365 OFFERS INDUSTRY-LEADING SOLUTIONS IN LIGHT OF RECENT AML ENFORCEMENT TRENDS
LONDON, 13 October 2023 – The landscape of Anti-Money Laundering (AML) enforcement is rapidly evolving. With the Solicitors Regulation Authority (SRA) recently shedding light on these shifts, the importance of robust measures for compliance cannot be overstated. Here, Verify 365 emerges as the beacon for law firms, providing state-of-the-art solutions tailored to current AML challenges.
Christian Shotton, Head of AML Investigations, and Nicola O’Brien, AML Investigations Manager, have recently delivered a webinar and emphasised the gravity of existing concerns within firms, highlighting issues at the client and file level, offering insights into the SRA’s enforcement actions, and showcasing cases that resulted in financial penalties.
The National Crime Agency (NCA) adds weight to this discourse. In their recent publication, they note how ‘Professional Enablers’ are jeopardising the integrity of the UK’s economy and reputation. Such enablers, they describe, provide services that abet criminality, either deliberately, recklessly, improperly, or even through negligence.
In response to the above concerns, the SRA has strategically positioned itself with three dedicated AML teams to combat money laundering: AML Policy, AML Proactive Supervision, and AML Investigations. Despite such measures, several issues remain at the firm level, including an absence of controls, inadequate firm-wide risk assessments, insufficient training of staff, and an alarming ignorance towards warning notices and guidance.
They point out that Firm-Wide Risk Assessments (FWRA), an integral aspect since 2017, is still missing in some firms. These assessments, while mandated, need to be tailored to reflect the size and nature of a given business.
Emphasising the training aspect, the SRA points out that it’s very important for firms to consistently train employees and maintain records of the same. Shockingly, last year alone saw 249 AML related reports, with a staggering 522 reasons for breaches. The crux of these issues often revolves around the inadequacy of customer due diligence (CDD) measures. Lawyers, whether through negligence or deliberate actions, can inadvertently aid money laundering, making CDD’s role even more critical.
CDD’s foundational pillar is to treat each client and matter with utmost importance from inception. This involves risk assessing clients, considering transaction factors, and abiding by regulations to demonstrate the taken measures, which then guides the level of CDD to be obtained.
Recent case studies further underline these concerns. Numerous firms faced fines, ranging from £2,000 to £20,000, for overlooking compliance aspects such as FWRA, training staff, or ensuring risk assessments.
Amidst this backdrop, Verify 365 risk and compliance technology can address the multifaceted challenges law firms encounter. Rudi Kesic, CEO of Verify 365, comments, “In the shifting trends of AML compliance, our technology suite ensures law firms remain anchored, fortified against potential vulnerabilities.”
At the heart of Verify 365’s offerings is the Dynamic ID Biometric Identity Check. This proprietary, UK-developed technology guarantees that individuals are genuinely who they claim to be by leveraging biometric facial recognition, NFC tech and ID document verification. Furthermore, Verify’s KYC and KYB measures ensure a meticulous vetting process for both individuals and businesses.
In addition, Verify’s continuous PEPs and Sanction Checks are equipped to provide real-time updates, ensuring firms remain updated against Political Exposed Persons (PEPs) and sanctions lists. The feature of instant Global Address Verification offers swift validation of client addresses from around the world.
Perhaps most innovative features in Verify’s platform is the use of Open Banking Technology for Source of Funds, providing transparency and speed in verifying sources of funds, covering 3,000+ banks globally, while also offering training modules ensuring every staff member is adept with AML policies and procedures.
“As challenges evolve, so do we,” concludes Rudi, “Our focus remains unflinching – ensuring our partners in the legal domain can effortlessly navigate the intricacies of AML compliance.”
SRA Annual report for the fiscal year 2022-23
The Solicitors Regulation Authority (SRA) has published its Anti-Money Laundering (AML) annual report for the fiscal year 2022-23. The report underscores the critical role legal services play in preventing economic crime and money laundering. The SRA has increased its resources dedicated to preventing and detecting financial crime, conducting proactive inspections of 177 firms and 73 desk-based reviews in the past year.
The report highlights the enforcement actions taken, including fines totaling £137,402, one individual suspended, and one individual subject to employment controls. In the most serious cases, where money laundering is suspected, the SRA reports to the National Crime Agency and submitted 24 suspicious activity reports involving assets totaling more than £75 million in the last year.
The SRA has also worked to ensure that all solicitors understand and meet the obligations of the financial sanction regime, conducting a thematic review of law firm compliance with the financial sanctions regime and issuing guidance on requirements and risks. They carried out spot checks on 23 firms to assess compliance with the sanctions regime.
Over the coming year, the SRA plans to increase its work in this area, including proactive sanctions inspections and desk-based reviews to check firms’ risk management and compliance with licenses issued by the Office of Financial Sanctions Implementation. The SRA emphasises the importance of dedicating appropriate resources to preventing money laundering, highlighting that preventing money laundering is a shared responsibility among everyone working in a firm.
Note: The content provided here is a summary of the key points from the SRA’s AML annual report for 2022-23.
About Verify 365:
Verify 365, the flag-bearer in AML technology, serves legal professionals and enterprises. Our relentless pursuit of innovation ensures that our clients are always a step ahead, prepared to tackle the ever-evolving challenges of AML compliance.
For a deeper dive into AML compliance, technology’s transformative role, or further insights, reach out to Verify 365 on 0121 274 2312 (UK).