Do you find it difficult to get your team to follow your AML policy and procedures? Do the words ‘head’ and ‘brick wall’ spring to mind?

Perhaps you should direct them to this case, which resulted in a £3,500 fine for a legal executive conveyancer who didn’t ‘adequately’ establish the source of funds on a couple of property transactions.

The SRA noted that this was contrary to the firm’s AML policies, controls and procedures.

There was no suggestion that this was a pattern of behaviour, or that the transactions resulted in actual financial crime. It was enough that a ‘wilful disregard of her regulatory obligations…had the potential to cause harm to others’.

Anyone who has direct responsibility for the cases they handle faces similar exposure. 

Note that the regulator puts the bracket for this level of breach up to about £5,000. It could be much more in serious cases. The SRA can now fine regulated people up to £25,000 in traditional firms (£50m in ABSs) without referral to the SDT. 

They could also use their powers to rebuke, reprimand or make a referral to the SDT. And publicise decisions, of course. Who knows what damaging career consequences that could have.

SRA regulation of AML policies

The SRA is becoming increasingly bullish on AML enforcement and its willingness to hold individuals accountable.

In fact, this case underlines the importance of firms protecting themselves by implementing clear AML policies and controls. If the regulator can see that you have taken steps to put in place appropriate financial crime safeguards, and yet despite your best efforts a professional who should know better fails to follow the rules, there should be an element of insulation from sanctions aimed at those in charge. 

That does not mean there is a fundamental shift away from firm-level culpability. It is important as ever to put in place the appropriate procedures, train the team and supervise the work. 

But now the SRA has demonstrated it is willing to wield an additional stick at the case handler level to ensure AML compliance.

So if your team needs any motivation to follow the rules, remind them that they personally are on the hook. It’s not just the partners, COLP and MLRO these days.

“Don’t want to follow our policy? Fine!”