The UK’s current system of AML supervision of the LEGAL SECTOR is NOT up to the job.

Lawyers must be at the forefront of preventing dirty money from entering the UK.

But lawyers have repeatedly been found to be some of the most prominent professionals involved in laundering schemes or facilitating transactions for clients against whom there are widespread allegations of corruption.

Effective anti-money laundering (AML) regulation and supervision are crucial for ensuring lawyers step up to play a proactive role as gatekeepers to prevent dirty funds from undermining the UK’s financial integrity.

In 2022 Spotlight on Corruption published a detailed report on whether the UK legal sector was being adequately supervised for money laundering.

• https://www.spotlightcorruption.org/
• https://www.spotlightcorruption.org/wp-content/uploads/2025/03/Broken-Record-report.pdf

Spotlight on Corruption found that despite high rates of non-compliance, there were low levels of supervisory enforcement in the industry and that the body set up to drive consistency in supervision – the Office for Professional Body AML Supervision – had been unable to raise standards sufficiently across the board.

Dr Helen Taylor, Spotlight’s Senior Legal Researcher and author of the report, said:

• “After six years of listening to the same broken record, it is now clear that the UK’s current system of AML supervision of the legal sector is not up to the job, despite the best efforts of OPBAS.
• With a FATF review looming in 2027, now is the time for the government to call time on this fragmented system and consolidate AML supervision of the non-financial professional services.”

In this report, Spotlight on Corruption reviews the latest statutory reports on money laundering from legal sector AML supervisors to understand progress.

In its latest detailed analysis of the performance of the professional bodies that police lawyers for money laundering, Spotlight on Corruption finds that a step change in effectiveness is needed to keep dirty money out of the UK.

The ‘Broken Record’ report – which reviewed the latest statutory reports on anti-money laundering from the nine legal sector supervisors – found that, despite some bright spots of best supervisory practice, long-standing and fundamental problems remain. These include:

• Ongoing high non-compliance rates with AML rules, with non-compliance rates still sitting at roughly 30% among English solicitors and over 50% among Scottish solicitors assessed, with particularly alarming non-compliance levels among high-risk conveyancing firms.
• Inconsistencies in supervisors’ strategies, powers and sanctions resulting in considerable discrepancies in enforcement outcomes, with the most significant fine of an English firm hitting £500k in 2023/24 while fines against Northern Ireland solicitors are capped at £3k;
• Continuing reluctance by some supervisors to resort to tough sanctions for serious and recurring AML failings, with only two individuals being struck off for AML failures across the legal sector in 2023/24;
• The Solicitors Regulation Authority cannot land significant blows against the largest law firms despite almost doubling its enforcement actions and bringing in 771% more fines over the last year.

With HM Treasury poised to determine how the UK’s AML supervisory regime should be reformed to show much-needed progress ahead of a crucial global financial crime watchdog FATF visit, root and branch reform is needed.

A single statutory AML supervisor for non-financial professional services offers the best way to address the ongoing weaknesses in the legal sector. However, consolidation must build on some of the incremental gains that have been made.

The report makes five key recommendations to inform the Treasury’s ongoing review of AML supervision:

1. Relieve failing professional body supervisors of their duties as an urgent priority within a carefully managed transition to consolidated AML supervision – including two that the Office for Professional Body AML Supervision (OPBAS) recently found ineffective.
2. Establish best supervisory practices, including granular risk assessments, better strategic targeting of high-risk areas, and more ambitious enforcement.
3. Retain, integrate and build sectoral and regional AML expertise in any new AML supervisory structure.
4. Work towards a consolidated public register of the regulated sector.
5. Expand thematic work and cross-sectoral information-sharing.

Broken Record Click here to read the report https://www.spotlightcorruption.org/wp-content/uploads/2025/03/Broken-Record-report.pdf