AML and UK sanction issues leads to National law firm being fined £101,357.00

National firm Ashfords [www.ashfords.co.uk] has been fined £101,357.00 by the Solicitors Regulation Authority [SRA] for money laundering compliance failures reported by the firm itself.

• In one transaction Ashfords had retrospectively ‘identified a potential link between one of the purported beneficial owners and an entity subject to UK sanctions’,
• In two others customer due diligence revealed conflicting information as to the ultimate beneficial owner and the source of funds was ‘not fully understood or evidenced and had changed during the transaction’.

The fine, the fourth largest imposed by the SRA, was agreed despite the regulator stating that there was no suggestion that any money laundering or other financial crime took place.

In published details of an agreed outcome, the SRA said Ashfords:-

• Had identified areas of concern in relation to compliance with the 2017 AML regulations and the SRA principles and code of conduct.
• Has agreed to pay a penalty of £101,357 plus investigation costs of £1,350.
• https://www.sra.org.uk/consumers/solicitor-check/508761/

SOME DETAILS

Three conveyancing transactions carried out between October 2017 and March 2018 were highlighted as matters of concern.

1. Two of the transactions related to the purchases of properties on behalf of a limited company worth
1. £3.2m and
2. £550,000
2. The third transaction related to the purchase of a property worth more than £3m on behalf of a UK registered charity.

In relation to the first transaction,

1. The SRA said customer due diligence revealed conflicting information as to the ultimate beneficial owner and the source of funds was ‘not fully understood or evidenced and had changed during the transaction’.
2. The firm’s compliance raised the issues but there was no written record as to if they were fully resolved before the transaction was completed.

The SRA said.

• A retrospective search by Ashfords during its own investigation
• ‘Identified a potential link between one of the purported beneficial owners and an entity subject to UK sanctions’,
• The client file in the charity transaction showed.
• The firm had previously been instructed to act in the purchase for a different client.
• The file contained no source of funds information or customer due diligence documentation.

In considering mitigation, the SRA said the firm.

• ‘Had procedures and controls in place; however, they were not followed in these matters’.
• There is no suggestion that the transactions actually involved money laundering or any financial crime.'
• There was no evidence that any harm had been suffered,
• The firm had brought the matter to its attention initially, assisted throughout the investigation, admitted breaches, made changes to systems, policies and procedures and ensured that regular training to all relevant employees is provided.

An Ashfords said:

• It failed to behave in a way that maintains public trust and failed to carry out the business effectively and in accordance with proper governance and sound financial and risk management principles.

• ‘We self-reported in 2019 to the Solicitors Regulation Authority potential breaches of the money laundering regulations on three transactions that were carried out in 2017 and 2018.
• ‘We were registered as an ABS (alternative business structure) at the time so there is a higher threshold in relation to the SRA’s fining powers. We were scored at the lower end with the full discount applied.
• ‘Since our self report we have made substantial improvements to our anti-money laundering processes including through a more rigorous centralised client onboarding process, revised policies & procedures and ongoing investment in our training & education programme across the business.
• We take our responsibilities under the Money Laundering Regulations and the SRA Principles and Code of Conduct extremely seriously.'

SOURCE

https://www.lawgazette.co.uk/news/national-firm-hit-with-sras-fourth-largest-fine-over-aml-compliance/5118030.article

https://www.sra.org.uk/consumers/solicitor-check/508761/