As the Solicitors Regulation Authority’s AML enforcement team continues its crackdown on regulation breaches, the Law Society of England and Wales has said it is ‘disappointed’ with the government’s response to the 2024 consultation on Money Laundering Regulations.
In the foreword to the response – published last month – economic secretary to the Treasury Emma Reynolds said the government is ‘confident that these changes represent a balanced approach to mitigating illicit finance risks and supporting businesses to invest and grow’.
But Law Society president Richard Atkinson said the report represented ‘a missed opportunity’ that would do little to ease the burden on the legal profession.
He commented:
“Making the Money Laundering Regulations more proportionate, risk-based and workable for all sectors is a step in the right direction by the government. However, these proposed changes will do little to ease the regulatory burden felt by the legal profession and others.
“Some helpful clarifications have been made such as simplifying due-diligence and defining ‘unusually complex’ transactions’, but ultimately this was a missed opportunity to drive meaningful reform.
“We are disappointed that no action has been taken to address the discrepancies in client due diligence timing, or to eliminate the risk of criminal liability associated with reliance on third-party checks, which continues to be a source of frustration for lawyers and the public.
“Our regulatory framework must be effective in combatting financial crime, but it must also be workable in practice for legal professionals and the wider economy.”
The consultation covered four main themes: making customer due diligence more proportionate and effective; strengthening system coordination on economic crime; providing clarity on the scope of the MLRs; reforming registration requirements for the Trust Registration Service.
A summary of the main changes can be seen here.
