The Solicitors Regulation Authority (SRA) is set to use its new power to demand information from solicitors about economic crime several hundred times a year. The power has been added to the Economic Crime and Corporate Transparency Bill currently going through Parliament.
New Economic Crime Power
According to the Ministry of Justice (MoJ), the SRA expects to use the New Economic Crime Power around 750 times annually. The new power will help the SRA meet its obligations to oversee and enforce the prevention and detection of economic crime more effectively. Currently, the SRA only has the power to request certain documents ahead of inspections related to money laundering. It is used for this purpose around 1,500 times per year. However, this power does not apply to economic crime more broadly, leaving approximately 3,200 law firms and sole practitioners without coverage.
The new bill will also introduce a new regulatory objective requiring all legal regulators to prioritise the promotion of economic crime prevention and detection. The MoJ states that the risks of economic crime go beyond money laundering, with fraud and breaches of sanctions regulations also posing significant threats.
The MoJ estimates that the extra time spent by legal professionals in handling these requests would amount to £225,000 annually, based on a staff cost of £50 per hour. Nonetheless, the new power is likely to help preserve public trust in the legal services sector and the jurisdiction’s attractiveness, which may also positively impact practitioners’ turnover.
Rudi Kesic, CEO at Verify 365, stated, “As financial crimes become increasingly sophisticated, it’s critical that the UK continues to strengthen its laws and regulations.The New Economic Crime Power will be a valuable addition to the legal framework and will help promote trust in the legal services sector. We are excited to see how this new power will be used in practice and believe it will be instrumental in protecting businesses and consumers from economic crime.”
To comply with these new regulations and combat financial crime, law firms can leverage AML technology to streamline their compliance efforts. One such example is Verify 365, a digital identity verification and AML checks platform that helps firms meet their KYC and AML requirements quickly and easily. Verify 365’s platform is built to streamline the verification process and eliminate the hassle of manual checks and processes. With our biometric ID verification, AML compliance, source of funds checks and analytics, faster digital e-payments, and qualified e-signatures, you can speed up client onboarding and ensure regulatory compliance with ease.
“Our client onboarding technology will help law firms to verify clients and establish certified digital identities that make verification easier and more secure, allowing them to comply with the new regulations while reducing operational costs and increasing efficiency,” added Rudi. “Verify 365’s technology platform can help law firms ensure compliance with regulatory requirements related to identity verification, address checks, sanctions checks, and source of funds checks using open banking. By leveraging advanced technology, our platform simplifies the verification process, reducing the risk of errors and improving the speed and accuracy of compliance checks.
This can be particularly valuable for law firms dealing with anti-money laundering and counter-terrorism financing (CTF) regulations, which require robust identity and financial checks to prevent illicit activities. New Economic Crime Powers are off the back of many fines already issued by the regulators. By integrating Verify 365’s technology into their compliance processes, law firms can save time, reduce costs, and improve their overall AML compliance procedures.”
For more information on how to stay AML compliant for your law firm, browse our resources for the latest guidance or check out our SRA audit top 10 tips.