AML – Time to update your firmwide risk assessment [free training and checklist for lawyers]

All law firms caught by the Money Laundering Regulations must have a firmwide risk assessment (FWRA).

FWRAs are the backbone of money laundering compliance. They inform compliance officers where they need to focus policies, training and client due diligence.

In a recent live Zoom training, Rachael Eyre and Jonathon Bray led a session on how to update your law firm’s FWRA.

The slides and recording will be available to COLP Insider newsletter subscribers (free). Access to the Zoom recording expires in 30 days.

The main points to come out of the firmwide risk assessment training

• The SRA is actively auditing AML compliance, of which firmwide risk assessments are a significant part.
• There are Warning Notices in play. This means the profession is ‘on notice’ that the regulator takes non-compliance seriously.
• We have already seen firms named and shamed (and fined) for failing to comply with the administrative aspects of the Money Laundering Regulations. This could damage a firm’s reputation.
• The Money Laundering Regulations are extremely wide in scope, and captures:
  • Independent legal professionals – transactional lawyers
  • Tax advisers – an extremely loose definition, which can bring in all sorts of practice areas including employment, will writing and litigation
  • Trust and company service providers – setting up trusts and companies, acting as a professional trustee and other commercial services.
• The regulations (and regulators) have done the work of identifying which areas you should be looking at.
• Going through the FWRA process is a useful exercise. It makes you think about the specific risks faced by your practice.
• You must personalise your FWRA! The SRA auditors can sniff a template a mile off. No two FWRAs should look the same.
• Drafting a FWRA is not a one-person job. Gather information and intelligence from across the firm.
• Wherever risk is identified, you need to think about how it can be mitigated. In turn, this will feed through to your compliance systems.
• The SRA has a free template to get you started.
• You can also download a free checklist here.