In March 2023, the Legal Sector Affinity Group (LSAG) published the latest update on anti-money laundering guidance.
The purpose of the guidance is to assist solicitors and law firms in understanding their legal responsibilities as outlined in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
Screening Employees: A Risk-Based Approach
Section 9.4 of the LSAG guidance provides valuable insights into screening relevant employees before and during employment. It underscores the importance of conducting thorough background checks tailored to the risk profile of the individual and their role within the organisation. Employee screening should be undertaken on a risk basis, aligning the type and extent of checks with the responsibilities and access to sensitive information of the staff concerned.
Mitigating Risks and Ensuring Integrity
Implementing robust screening processes enables law firms to minimise the risk of inadvertently hiring individuals with a history of financial misconduct or involvement in illicit activities. By verifying identities, checking references, and assessing previous employment history, firms can build a workforce of high integrity, protecting their reputation and maintaining compliance with AML regulations.
Moreover, law firms must remain vigilant throughout an employee’s tenure and be prepared to address any signs of suspicious behaviour promptly. The LSAG guidance recognizes this need for ongoing monitoring and screening of employees. Regular assessments help ensure that employees uphold the required standards of integrity and remain compliant with AML regulations.
Leveraging Technology for Employee Screening
Many law firms still onboard staff using static, lengthy, manual forms. This makes it difficult to monitor, review applications and collect documents from prospective employees which, in turn, makes it challenging to identify and resolve red flags. To streamline and enhance the employee screening process, legal firms can adopt digital solutions like Amiqus to automate various aspects of the employee screening process in line with the LSAG guidance, saving time and ensuring thorough due diligence.
One of the key benefits of using Amiqus is access to extensive databases and resources, which enable firms to verify an individual’s identity, check their professional history, and identify any adverse records. This helps firms make informed decisions when hiring new employees and mitigates the risk of potential money laundering or fraudulent activities within the organisation.
Furthermore, Amiqus provides ongoing monitoring services to keep track of employees’ compliance with anti-money laundering regulations. This ensures that firms can promptly identify and address any employee status changes that may pose a risk to the organisation’s integrity.
By prioritising comprehensive employee screening processes aligned with the LSAG guidance, legal firms can strengthen their compliance measures and mitigate potential risks. Employee screening should be undertaken on a risk basis, tailoring the checks to the responsibilities and access to sensitive information of the staff concerned.
Amiqus is the only UK government-certified provider under the Trust Framework that offers a full client and employee compliance platform. While other providers may meet the demands of AML compliance on one front or the other, with Amiqus, firms can trust that their client due diligence and employee vetting are carried out to the highest standard within a single, unified system.
If you’re interested in implementing an effective process for employee checks and background screening at your firm, get in touch with Amiqus today.