The Law Society of Scotland has published its initial findings from its new AML attestation process. This is the first step in a new regime and involved selected firms to complete the new attestation document.
The Law Society has found the first set of responses has highlighted some interesting points:
R.21 requirements appear to be misunderstood.
- 21 relates to internal AML controls at a practice, including the appointment of a Money Laundering Compliance Officer (MLCO), undertaking independent audits to test the adequacy and effectiveness of PCP’s and the completion of employee screening. Should a practice feel this regulation does not apply to them, owing to their size and nature, they should expressly state why in their PCPs.
A common misconception appears to be that ‘size and nature’ solely means the physical size of the practice – ie., number of employees. While this is a factor, consideration should also be given to the points highlighted within LSAG Section 9.1, including the inherent risks documented within your Practice Wide Risk Assessment, the client demographic, the risk-profile, nature and complexity of the work you carry out and the volume of the work.
The Law Society was encouraged to find that more practices are now aware of certain LSAG guidance, Key Compliance Principles and are making improvements to their AML PCPs following attestation completion.
- Practices have advised that improvements/enhancements will be made to their ‘beneficial owners, officers and managers’ (BOOMS) procedures (LSAG KCP 1), their discrepancy reporting procedures (LSAG KCP 18) as well as internal record keeping procedures (LSAG KCP 36).
The AML team will now conduct spot checks as well as contact the next 50 practices selected to complete the attestation process.