High profile London Law firm Mischon de Reya has been fined £232,500 by the Solicitors Regulation Authority for breaches to money laundering regulations. The fine is one of the biggest issued by the regulator.
The firm was fined for:
- Failing to properly identify 4 related clients
- Misplacing evidence of the due diligence it had carried out
- Inadequate training of the partner who carried out the AML due due diligence
Mishcon de Reya carried out work for two individual clients and corporate vehicles connected with them. The firm stated that they had obtained due diligence but had lost the hard copy file and no electronic copy was kept. The SRA has said that the transactions posed a high risk of money laundering as the companies involved were based in high risk jurisdictions.
The firm also acted in 3 property transactions where due diligence was not completed and copies of the due diligence files were not kept.
The initial fine was to be 0.25% of Mischon de Reya’s global turnover which equated to £387,500 and the form has to pay the SRA’s costs of £50,000. The fine was subsequently reduced to take into account that the firm has updated it’s IT systems to prevent loss of files in future and other corrective action.
The SRA in issuing the fine has said that there is a low risk of repetition of the errors but the failings had the potential to facilitate money laundering or terrorist financing. Any fine had to act as a deterrent to other firms.
This case has implications across all regulated sectors including Estate Agency Businesses. It highlights the importance of proper record keeping and ensuring all relevant staff are adequately trained. Your AML risk assessment is your only evidence to HMRC that you have undertaken AML due diligence, what steps you have taken to mitigate any potential risks and how you have come to the conclusions you have. If staff are not up to date with AML regulations and do not receive sufficient training they will not be able to assess the risk and take appropriate action.
To prevent a similar occurrence in your business first make sure your Firm AML risk assessment is up to date and that your AML Policy and Procedures are adequate. Most important are employees with responsibility for implementing AML procedures following them. Review AML training undertaken by your staff. Is the training adequate? Do you have an independent audit of your AML practices? If you are unable or unsure on how to assess these points then LondonCDD can help with reviewing, improving and implementing an effective AML regime.
Get in touch here
Related Posts:
