The Legal Sector Affinity Group (LSAG) which is made up of representatives from the different regulatory and representative bodies in the legal profession, releases information and guidance for legal services professionals. The LSAG 2020 guidance provides a detailed commentary on recently amended UK regulations on money laundering (as well as the 2017 regulations).
The LSAG guidance provides an update to material previously published in 2018, updating the content to match the new regulatory environment. Key changes in the new publication include:
- Expanded guidance on understanding source of funds and source of wealth
- A new section addressing the need for firms to understand the technology they are using
- Clarifications on high-risk sectors, accepting cash into the client account, customer due diligence (CDD) on referrals from another legal practice, timing of CDD/exceptions
- Discrepancy reporting to Companies House, and other relevant registries from new duty/obligations introduced from January 2020
As well as this the SRA have produced further guidance, in light of a UK Government risk assessment, published in December, producing a legal sector-specific money laundering risk assessment, focused on the specific challenges of the sector.
Juliet Oliver, SRA General Counsel, said: ‘Tackling money laundering is a priority for all of us and we know the vast majority of firms are committed to keeping the proceeds of crime out of the profession. These documents offer comprehensive information on some of the better ways to achieve this. Our sectoral risk assessment identifies and discusses the biggest issues and emerging threats currently facing providers of legal services as they look to combat money launderers. It is complemented by the LSAG guidance, which covers all the bases of the 2017 regulations, plus a thorough review of how regulations and expectations on firms have evolved since then.’