The Law Society of Scotland launches review of AML compliance in Scottish law firms

Verify 365 Digital Onboarding Technology, a leading provider of anti-money laundering (AML) solutions, welcomes the release of the Law Society of Scotland’s thematic review of practices’ Policies, Controls and Procedures (PCPs) and the launch of the refreshed AML PCP template. The report, which was published on 20th April 2023, highlights both positive aspects and areas requiring improvement in the AML compliance of Scottish solicitors.

According to Rudi Kesic, CEO at Verify 365, “We applaud the Law Society of Scotland for taking a proactive approach to identify specific current and emerging AML risks within the regulated population. The findings of this thematic review are an important reminder that practices must remain vigilant in their efforts to combat financial crime, and we urge all practices to review their AML PCPs accordingly.”

As a provider of cutting-edge AML technology, Verify 365 recognizes the vital importance of robust PCPs in the fight against money laundering and terrorist financing. The company’s digital onboarding solution incorporates advanced identity verification and risk assessment capabilities to help firms comply with regulatory requirements, detect suspicious activity and prevent financial crime.

In June 2022, a thematic review of PCPs was announced by the Law Society of Scotland in order to gain insight on how the profession complies with obligations under the MLRs and LSAG guidance. The review involved a sample-based approach across 40 practices and has led to the creation of a thematic report to provide supplementary guidance and support for AML compliance in this critical area.

Thematic reviews are a compulsory exercise for those chosen to participate and allow for a better understanding of AML risks and compliance within the regulated population. The data gathered can be used to provide further support to members in mitigating AML risks. AML technology such as Verify 365 may be used in this process.

The AML team stated that a number of areas requiring improvement were highlighted.

Findings include:

* An absence of PCPs that clearly demonstrate that customer due diligence should be holistic in nature and the importance of documenting the nature, background and circumstances of the client/matter.

* Inadequacy in documented and practical guidance in relation to record keeping requirements.

* A lack of practical guidance to staff on red flags in relation to the identification of money laundering and terrorist financing.

* An absence of documented and practical guidance in relation to the ongoing monitoring of clients/matters.

“The refreshed AML PCP template is a valuable resource that practices can use to enhance their AML compliance efforts,” added Rudi. “By leveraging innovative technologies like Verify 365, firms can streamline their AML processes and improve the accuracy and effectiveness of their risk assessments. We look forward to continuing our work with the Scottish legal sector to help combat financial crime and promote a more secure and resilient business environment.”