Anti-money laundering (AML) compliance remains a key priority for law firms across England and Wales. Risk assessments form the foundation of a robust compliance framework in this area. Despite improvements in the quality of Firm-wide risk Assessments (FWRAs) and Client and Matter Risk Assessments (CMRAs), as seen in the Solicitors Regulation Authority’s AML Annual Report 2023-2024, many firms still struggle to implement robust risk assessment frameworks.
As per the report, some of the common themes in non-compliant risk assessments include:
- Omission of a dedicated FWRA, with firms instead providing alternative documents such as an AML policy or operational risk assessment that focuses on business risks rather than AML risks
- A lack of detail in FWRAs around expanding on identified risks and tailoring assessments to their specific business activities and jurisdictions.
- Limited understanding of conducting CMRAs, resulting in overly simplistic assessments that rely on a tick-box approach without recording clear reasoning, due diligence measures, or risk mitigation steps
These deficiencies can limit the effectiveness of a risk-based approach and the establishment of appropriate policies, controls, and procedures (PCPs) to mitigate risks.
Properly evaluating potential clients and their proposed instructions is crucial for law firms. Failing to do so can make them vulnerable not only to regulatory actions but also to significant reputational damage and financial penalties. Moreover, it exposes the firm to the risk of laundering proceeds from criminal activities, regardless of its size, specialism, or expertise.
Simplifying risk assessments for law firms
Many firms struggle with fragmented compliance processes, often using multiple spreadsheets, paper-based records, or separate templates stored in different locations. This not only increases the administrative burden but also makes audits and reviews more challenging.
Amiqus has expanded its risk assessment functionality, providing law firms across England and Wales with everything they need to conduct thorough, well-documented risk assessments in one easy-to-use platform. For more details, speak to the Amiqus team.
A range of templates and supporting documents created by the Solicitors Regulation Authority (SRA) has been added to the Amiqus platform to support firms with their risk assessments. This includes:
1. Firm-wide risk assessment template
A structured template designed by the SRA using learning from their review to help firms identify and evaluate money laundering and terrorist financing risks at a firm level. Completing a FWRA is a mandatory requirement of the MLRs 2017 and will likely form part of any supervisory inspection by the Society. The template serves as a useful guide for practitioners and should be tailored to their practice.
2. Client and matter risk assessment template
An approved template by the SRA with a list of factors to help firms assess and record the money laundering risk posed by a client or transaction. The SRA emphasises that solicitors should adapt the template to ensure it accurately reflects the risks their firm faces through their clients and the type of work they undertake.
3. Guidance notes for FWRA and CMRA
This is supporting guidance from the SRA for MLROs and solicitors when conducting firm-wide, client, and matter risk assessments. The templates should be used in conjunction with the guidance notes so that those completing the risk assessments have further regulatory-approved guidance straight to hand to aid them in completing each section.
Additional templates and support we’ve introduced
In order to help ensure you have all relevant materials and records in one place – centrally and securely stored in the platform, we have introduced a number of additional templates and support materials, such as:
1. Sanctions risk assessment template
A template for solicitors to evaluate and record their clients’ sanctions risks. This assessment helps identify exposure to high-risk entities and allows firms to implement effective controls and policies to mitigate potential issues.
2. LSAG AML guidance 2023
This is a fully comprehensive, 220-page AML compliance guide approved by HM Treasury for use by legal professionals. It is well-divided and has an indexed contents page for easy navigation. The guide adds colour to the underlying regulations and offers practical guidance on how to comply with your AML obligations.
Amiqus: your trusted compliance partner
Amiqus collaborates with regulatory bodies across the legal landscape to stay informed about AML regulations and continuously improves its product based on their guidance.
Our Director of AML and Economic Crime Risk, Graham MacKenzie, has over a decade of regulatory leadership experience as Chair of the UK AML Supervisors Forum, member of LSAG, and Head of AML at the Law Society of Scotland. Thus, we are well-placed to help you navigate the complexities of AML compliance.
Amiqus helps firms meet compliance with AML regulations and LSAG guidance by providing AML checks and sanctions screening solutions tailored to the needs of legal practices in England and Wales.
By bringing together risk assessments, due diligence checks, compliance documentation, and more in one platform, Amiqus makes it easier for firms to fulfil their AML obligations while improving efficiency and reducing risk.
Whether you’re looking to enhance your firm’s risk assessment process, ensure thorough sanctions screening or streamline your overall AML compliance, Amiqus provides the trusted tools and guidance you need.
Ready to access our new and improved risk assessment offering, along with expert advice and support? See the Amiqus platform in action over a quick call—book your personalised demo.
