We have read in the Law Society Gazette this week that the SRA are concerned at firm’s “CUT and PASTE” approach to AML.
Speaking from experience, I would say that this approach is not just in relation to the AML, and its far more widespread that people would care to admit. I can generally go into any given firm and tell if the policies and procedures have been written by the firm or whether they have been copied and pasted from various sources in an attempt to provide a compliant framework for them to work within.
I even recall going to on firm where the COLP/COFA had not read the contents of the policies they had “borrowed” and left the name of the other firm and the individuals who worked there within that policy. One may say that’s a rookie error, but it demonstrates the systemic issue with the culture of the firm and approach they have toward compliance.
Following on from the SRA’s thematic review earlier in the year it was able to evidence the issues that they uncovered and despite publishing this, it has not encouraged firms to “get their houses in order”. Whilst firms may think it’s all red tape, the regulations are there to protect firms and individuals to ensure that they do not fall foul of the repercussions which may occur. Firms can no longer have a “it won’t happen to us” attitude.
With 64% of firms using templates – you are at risk of diluting the risk assessments, risk management and training of staff to ensure they are complying with the AML Regulations, and your firm’s procedures. Essentially you are taking a massive gamble with your firm, and your staff. Remember it’s your practising certificate on the line! Is this copy and paste approach something that you know is happening in your firm and if so, is that the type of firm you want to work for.
Firms tend to not think of the consequences and more importantly are not looking at how money laundering is supporting criminal activity, whether it is in the form of terrorism, human trafficking or other forms of criminal activity. Do you really want to be contributing to this and does that make you any better than the people committing the offence. You may think that is harsh, yet it is the reality. Whilst you may think that one person or one firm can stop this type of activity, if everyone collectively is taking the same risk based approach then there is more a chance or eradicating this behaviour which forms money laundering.
As the SRA have said, a phone call from them should not be the prompt for going into overdrive for a firm to get their act together, in the event that the SRA have concerns they will be taking strong action.
The SRA are looking to support firms with new guidance, checklists and templates with the aim to help firms understand the level of expectations and to enable them to put steps in place. There will also be a Practical Advice Service.
AML compliance should be absolutely mandatory and if you have any concerns and do not know whether you are compliant or how to approach things, Symphony Legal can assist.