Compliance experts Legal Eye have responded to the LSAG guidance with a comprehensive AML Independent Audit Certification programme to help firms across England and Wales meet the requirements.
At the start of this year the Legal Sector Affinity Group (LSAG) issued a lengthy draft guidance of AML guidance for law firms.
The focus of the guidance changed in emphasis to meeting Regulator’s expectations of good practice. Being able to explain any gaps or deviations in adherence to the parts of the guidance that the LSAG thinks practices should be observing will be paramount.
Not a small task, 9 months after the guidance release MLROs and MLCOs are going to have to make sure they are complying.
Law Firms will be expected to evidence their adherence to the guidance, the latest service launch from the team at Legal Eye is a comprehensive and complete offering to help relieve practice managers, MLROs and MLCOs of the burden of carrying out an independent audit where they may not have the internal resources suitable.
Making the decision to ‘go independent’
Reg 21 of The Money Laundering Regulations 2017 requires a relevant person, where appropriate to the nature and size of a business, to establish an audit function that is completely independent to your core business.
Does your firm need one? Well you may have some fantastically trained AML staff, but spotting where something may be not ‘quite right’ or having the influence to ensure new recommendations are adopted can be tough from within a culture.
The size of your firm will be dictated by the obvious; the bigger a firm is the harder it is to have clarity on whether your firm is complying with the policies, controls and procedures.
When determining the nature of a business, it is important to consider the risks that are identified through a practice wide risk assessment. What high risk matters does your firm undertake? Is this on a regular basis? What methods do you implement to carry out and deliver your services?
Following a pandemic of over 18 months, most firms have had to carry out a lot of non-face to face work, what are the risks associated with this? Have you thoroughly reviewed these, or like most industries has your firm created a hybrid way of working that has yet to be audited? The SRA’s Risk Outlook in November 2020 commented on an independent audit; ‘most firms have to consider their PCPs independent of the business and audits can help highlight your weaknesses so you can take targeted action.’
A certified programme
Trying to find a member of the firm who is independent of the AML function and with the knowledge to conduct an audit is no mean feat. The Legal Eye independent audit will help firms to fulfil the LSAG requirements and provide a certificate to demonstrate a firms’ commitment to compliance, all without any disruption to any member staff, meaning no invasion into practice management or fee earner time.
The team works with a participating firm delivering an audit report which summarises an evaluation of the firm’s AML PCPs. A comprehensive and solid model of support, the audit will be carried out biennially with re-certification conducted remotely over a half day review.
Speaking about its launch, MD Paul Saunders said: ‘ Helping our clients meet regulatory obligations and navigate through them whilst embedding them into their culture is what we do. Legal Eye has a pragmatic approach to assisting firms and helping them to meet the requirements set out by regulators. This latest AML Independent Audit Accreditation not only seals our committed to the sector, it also demonstrates how much we want to be at the heart of helping firms mitigate risk.’