Money laundering is on the rise, and while it is difficult to put a number on the amount of money that is laundered through the UK every year, recent estimates from the FSA puts the figure at around £60billion.
One of the key targets for those looking to clean their dirty cash is law firms, but the number of Suspicious Activity Reports (SAR) the NCA received from lawyers fell by 10% last year. This caused Donald Toon, director of economic and cybercrime at the National Crime Agency (NCA), to question whether lawyers were taking their obligations seriously enough.
So what is your law firm doing to prevent money laundering? Under the Money Laundering Regulations, regulated law firms must undertake customer due diligence - not only to verify the identity of their clients, but also the beneficial owners and the nature of business transactions including the source of the funds. This is because where a PEP or sanctioned individual is looking to make a financial transaction, they will do it through an intermediary business or contact, so it is imperative to identify the true beneficiary of the transaction to ensure the funds are legitimate.
And if your firm is not undertaking proper checks, you will be a target.
So what can you do? Well, it is no secret that undertaking money laundering checks is a time consuming and expensive process. Not to mention the fact that fake documents are now so sophisticated, that even if you do meet clients face to face and they produce identification such as passports, driving licences etc. you still cannot be 100% sure they are who they say they are.
The only way you can be certain that your checks are compliant is by using an electronic money laundering checking system- like SmartSearch.
Our award-winning system allows law firms to do a ‘SmartSearch’ which is a way of doing all their anti-money laundering checks in one place. A ‘SmartSearch’ check negates the need for manual checks, therefore saving time and money. By doing a SmartSearch, law firms have the peace of mind that, not only are they complying to AML regulations, but that they are doing it in the most accurate and efficient way.
And while electronic verification is not obligatory, yet, the 5th money laundering directive stipulates that electronic checks should be done where possible, so it is only a matter of time before electronic checks become compulsory. So what are you waiting for? It is time to start SmartSearching.