Conveyancing AML checks, money laundering and illicit finance – time to protect your law firm?

By Rudi Kesic – CEO at Verify 365

21 October 2022 – London

Money laundering is a major challenge in the legal sector as it underpins most forms of organised crime in the UK, which allows criminals to develop their operations, deposit funds and hide their assets. Although there are no exact figures, there is a realistic possibility that the scale of money laundering impacting the UK annually is in the hundreds of billions of pounds.

The threat of money laundering in the legal sector

Money laundering is an ongoing issue for solicitors and conveyancers and has the potential to threaten the UK’s national security, national prosperity, and international reputation.

The critical importance of the legal sector to the UK’s economy and London’s reputation as the world’s top legal hub, means that property transactions, particularly high value money laundering involving Russian, Chinese, or Arab clients, can undermine the integrity of the UK’s legal system and its international reputation.

How conveyancing solicitors are helping criminals with money laundering

The UK benefits from an active and dynamic market of law firms, supported by a limited number of restrictions on establishing a company in England and Wales. The ease with which a company can be established is frequently exploited by criminals who set apparently legitimate companies both within UK and offshore, but which are primarily a mechanism for laundering illicit funds.

The property market is another route exploited by criminals, particularly in London. Money laundered in this country is often the proceeds of crime generated in another country; large financial centres are attractive destinations or transit points for the proceeds of crime.

The main issue with London is the sheer size of criminal money flowing through the UK. Virtually all high-end money laundering schemes, and several cash-based ones, are facilitated by the abuse of legitimate processes and services. Solicitors and conveyancers in England are regularly “exploited”, but sometimes complicit, and sometimes negligent, and sometimes unwitting – and this small minority of people can pose a very significant threat.

Lawyers can act as intermediaries and use their skills, knowledge and abilities to draft documentation, disseminate funds, and allow highly complex structures to be created that move and store large amounts of criminal money and conceal ownership effectively.

Best solutions for conveyancing solicitors and estate agents

Verify 365 are working with key regulation agencies to make the UK legal sector a hostile environment for criminals by:

– providing effective and easy to use client onboarding technology and anti money laundering checks for solicitors to fight property fraud;

– exposing organised criminals engaged in money laundering by providing access to source of funds bank accounts and bank statements to comply with the legal requirement;

– training lawyers from across the UK on best practices to fight fraud, identify suspicious activity, understand the crime act regulations and anti money laundering rules;

– providing the best digital onboarding solutions and AML checks which have been specifically developed for lawyers to make it harder for criminals to abuse the UK’s legal system;

– estate agent support and training to identify risk with a cash buyer, request clients to provide proof of address and proof of funds, in line with the latest money laundering regulations;

– mortgage lender support and guidance with international money laundering checks and bank account verifications, especially focussing on cash buyers;

– supporting the property industry by enabling clients to easily provide proof of funds and evidence of current address to ensure a smooth conveyancing process;

– bank statement and document analytics using FCA-regulated Open Banking technology to identify criminal funds and hidden property assets for foreign clients engaged in a property transaction in the UK;

– work in cooperation with NCA, company service providers and other domestic and international partners to tackle the identity risk.

Finance is increasingly global, with money and assets moving quickly between jurisdictions, products and services.

AML checks are critical to build an effective response

Working alongside major financial institutions enables Verify 365 to detect and disrupt money laundering activities in the UK and around the world.

By using Verify 365, law firms and solicitors can easily undertake AML and identity checks to identify money launderers, therefore disrupt further criminal activity, as well as making the UK’s legal sector a difficult environment for those who seek to use it to launder criminal finances.

By working in partnership with law enforcement and private sector organisations, Verify 365 are helping to support law firms’ own efforts, provide training and insight to help solicitors and conveyancers to spot the signs of money laundering, and develop new technologies to identify and stop fraud.

How can your law firm comply with AML regulations

If you work in legal services or a related industry and suspect that your law firm is under threat from money laundering or terrorist financing, you should call Verify 365 to assist your practice with implementing a digital client onboarding system.

The best practice for AML compliance for conveyancers as required by the Solicitors Regulation Authority include:

– NFC & Biometrics ID Checks

– International AML Checks

– Proof of Address Checks

– Politically Exposed Person (PEPs) Checks

– International Sanctions List Checks

– Open Banking Source of Funds Verifications

– KYB Company Checks (International)

Best practice for digital client onboarding 

For conveyancers, the risk of money laundering and ID fraud is inherently higher than in other areas of law, which is shown in how the professional indemnity premiums for conveyancing firms are much higher than those who do not work with property transactions.

Reducing risk is a key challenge for the legal and property sectors and the legal sector has traditionally been slower to adopt technology to help prevent fraud. This leads to a stagnant, manual approach to the conveyancing process which poses further problems for law firms, estate agents, and buyers and sellers.

That’s why we made Verify 365 – the perfect solution for conveyancing and client onboarding.

As the first legal technology company in the world to meet the Safe Harbour Digital ID standard set out by HM Land Registry, our solution has helped hundreds of conveyancing law firms streamline processes by completing everything from ID verifications, AML checks, ePayments, Searches, and TA6 Forms, all in one technology platform.

Protect your solicitors practice from the risk of money laundering

By implementing Verify 365, your law firm will be protected from the risk of money laundering and the proceeds of crime. With the integration of Verify 365, you firm’s clients can be verified remotely in less than two minutes by simply taking a scan of their government issued ID document NFC-chip using their smartphone, followed by a selfie which includes liveness detection, and finally linking their profile to the secure online banking platform for an instant source of funds verification. Verify 365 first extracts the encrypted data from the NFC-chip and matches this to the ID document.

The platform then uses the latest AI-powered facial biometric and liveness technology to check that the ID matches the client’s face. This ensures the person presenting the identity is its legitimate owner and is physically present.

What makes Verify 365 unique? 

What makes Verify 365 unique is that users can start their AML and digital identity verification journey anywhere, anytime, through a simple and user-friendly app that meets all the regulatory requirements from the HM Land Registry, Solicitors Regulation Authority and the Financial Conduct Authority.

If your law firm is looking for a digital client onboarding solution specifically developed for SRA regulated solicitors firms in England and Wales, please visit www.verify365.app.