UK LAW firm fined for relying on Ukrainian lawyer for AML checks.
29/10/2023
A London firm handling a property transaction between two Ukrainian citizens has been fined around £12,000 for failing to conduct sufficient AML checks.
DKLM LLP, based in the Square Mile, relied upon customer due diligence and source of funds checks provided by a lawyer working in Ukraine.
The Solicitors Regulation Authority said:
- The extended due diligence required for this matter was not carried out, with insufficient scrutiny of the background information provided.
A complaint had been made about the firm relating to a transaction for a UK property. The complainant alleged
- That the firm miscalculated his stamp duty land tax liability and he was not refunded the money he was owed.
Concerns were also raised that:
- The house appeared to be undervalued compared with properties in the same street, and legal costs appeared to be high.
The SRA’s investigation found:
- Inadequate checks to the extent that the firm could not accurately know if the funds for the transaction had been paid.
- The firm failed to pay sufficient regard to two SRA warning notices about money laundering, although there was no suggestion that the transaction involved any financial crime.
- The firm failed to adequately identify at the outset of the retainer that the third-party lawyer relied upon had previously been struck off by the Solicitors Disciplinary Tribunal.
The SRA said:
- ‘The conduct showed a disregard for statutory and regulatory obligations and had the potential to cause harm, by facilitating dubious transactions that could have led to money laundering (and/or terrorist financing).
The firm agreed to pay a £12,072 fine and £1,350 costs.
Source
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