FCC Flash

On November 24, 2023, Ashfords LLP, a leading South-West law firm, was fined US$127K by the Solicitors Regulation Authority (SRA) for failing to conduct appropriate anti-money laundering checks on three property transactions. Two of these transactions may have involved a sanctioned entity.

To know more, read here https://www.fcctimes.com/2023/11/27/south-west-law-firm-ashfords-fined-101357-by-sra-over-money-laundering-oversights-in-property-transactions/?utm_source=LinkedInText&utm_medium=FCCFlash01Dec

The Solicitors Regulation Authority (SRA) pointed out that the firm’s client onboarding and monitoring processes exhibited lapses, allowing significant amounts to enter its client account without adequate verification of the source of funds.

The SRA revealed compliance concerns regarding the MLRs 2017, SRA Principles 2011, and SRA Code of Conduct 2011. Between October 2017 and March 2018, three property transactions initiated by a third-party property investment company raised multiple issues:

  • Lack of UBO and SOF Identification: Transactions for properties valued at £3.2m and £550,000 for Client A lacked clarity in beneficial ownership and exhibited shifting funding sources, which remained unresolved despite attempts to address them.
  • Suspected Link with Sanctioned Entity: A subsequent investigation found a possible link between an individual associated with the purchases and a UK-sanctioned entity. Inadequate AML measures increased the risk of funding from a sanctioned source.
  • Insufficient Due Diligence: In another transaction for a property over £3m for UK charity Client B, insufficient funding documentation and trustee-related due diligence heightened AML concerns despite the charity’s status. The firm’s failure to assess AML risks, despite fund-related uncertainties, posed substantial compliance lapses.