Report shows more AML actions driving improvements

October 31, 2024

Our latest annual report shows that we have increased regulatory measures against firms in a bid to boost compliance and ensure the profession addresses the risk of money laundering.

Our anti-money laundering (AML) report also shows improvement in the way companies manage risk. The report details our work over the past 12 months to help companies comply with anti-money laundering regulations, as well as actions taken against companies that did not take their obligations seriously. Publication of the report is a requirement imposed on all supervisors by the Office of Professional Body Anti-Money Laundering Supervision (OPBAS) and HM Treasury.

It shows that in 2023/24 we took regulatory action against companies in relation to anti-money laundering breaches in 78 cases, an increase on the previous year (47). In more than half of cases, the most common breaches were related to companies having inadequate risk assessments or AML controls. We issued 44 fines totaling £556,832.

We have increased our proactive monitoring work over the last year, almost doubling the number of proactive firm contracts (inspections and reviews) we carried out (545), compared to the previous year (273). Through this work, we have helped 394 companies improve their AML controls and have seen marked improvements in the way companies assess risk. Only 12% of client and subject risk assessments were deemed ineffective, compared to 51% the previous year.

Paul Philip, chief executive of the SRA, said: ‘We must work together to prevent criminals from using our profession to launder money. Last year we were concerned about how many companies were not managing risk effectively. There is still a long way to go, but we are pleased to see marked improvements in this area.

‘It has been a year of change as additional regulatory requirements have increased scrutiny on economic crime and our work to prevent it. Lawyers play a vital role in preventing money laundering; however, we will take action against the minority who do not take this responsibility seriously.’

In addition to the annual report, we have also published a thematic review that analyzes anti-money laundering training in companies. We found that when money laundering compliance officers (MLCOs) had received additional training, companies were almost 50 percent more likely to comply, compared to those whose MLCOs had not.

We also found that the training was too focused on how to comply, without covering why it is important to have strict controls. He also highlighted the importance of ongoing and additional training, rather than one-off sessions. Following the review, we have published a training checklist to help businesses make improvements in this area.

As of April 5, 2024, 61% of regulated companies are within the scope of anti-money laundering rules.