Calls for grace period for solicitors to adapt to AML regulations

first_imgA group representing anti-money laundering supervisory bodies in the legal sector has called for a grace period to allow the profession to adjust to regulations coming into force today.The Legal Sector Affinity Group, whose members include the Law Society and Solicitors Regulation Authority, has told the Treasury that a ‘sensible supervisory approach’ to the new regulations would give firms and individuals time to adjust to their new obligations.The group said it feels this is particularly important ’given the extremely short timeframe’ between the final version of the regulations becoming available and their coming into force. The Law Society and the SRA are working to get guidelines published as soon as possible.The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 transpose the EU Fourth EU Anti-Money Laundering Directive into UK law.  The final version of the regulations was published last Thursday, 23 June – and comes into force today.The regulations create a new criminal offence if any individual makes a false or misleading statement in the context of an investigation. This is punishable by a fine or up to two years’ imprisonment.The regulations also introduce new internal controls and procedures. Obligations for carrying out due diligence will fall on a nominated senior manager member of the board of directors. The individual must be a member of the board of directors or an equivalent management body.Despite the call for more time for law firms and individuals to adapt to the changes, figures published today suggests the profession is broadly supportive.According to legal and financial research company LexisNexis Risk Solutions, 73% of financial crime professionals in UK said they thought the directive will make it easier for firms to prevent money laundering. This is a marked improvement from a 2015 survey related to the previous version of the regulations which found that only 17% of those surveyed thought they would significantly reduce money laundering.Mike Harris of LexisNexis Risk Solutions, said: ‘Britain has always been at the forefront of fighting financial crime – but our research shows the compliance professionals in the financial services sector view the new regulations as further supporting the fight. That said, it’s important not to underestimate the sheer scale of the logistical challenge for organisations resulting from this regulatory change, especially for smaller to medium sized firms.’last_img