• Legal Professionals

    Some services provided by the legal profession are attractive to criminals wanting to launder the proceeds of crime and to finance terrorism.

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Legal Professionals

What are the ML/TF Risks?

Legal practitioners and conveyancers provide certain services that operate as a gateway to property and financial markets, financial institutions and other regulated professionals.

These ‘gatekeepers’ provide financial and business services that can be abused to disguise beneficial ownership, conceal the origins and purposes of financial transactions, facilitate tax evasion and, ultimately, launder the proceeds of crime. Operating through or behind a professional adviser can provide a veneer of legitimacy to criminal activity.

Legal practitioners can be used to create complex (but legal) structures that can create distance between criminals and their illicit wealth and through conveyancing facilitate a process that allows for the transfer of ownership of property, a high-value asset that provides ideal opportunities for laundering large volumes of illicit funds.

The Money Laundering and Terrorist Financing (ML/TF) risks associated with legal practitioners include:

  • Criminals may seek to conduct their financial activity through a legal practice to disguise their criminal involvement;
  • Criminals may seek out lawyers as gatekeepers to the financial system to give the impression of respectability and legitimacy;
  • Criminals may misuse a legal practices’ trust accounts for deposits or international wire transfers to avoid detection;
  • Criminals may seek the assistance of lawyers to establish companies or trusts which they then use to obscure who really owns or controls the funds and assets (that is, the beneficial owner);
  • Conveyancing can facilitate a process that allows for the transfer of ownership of property, a high-value asset, that provides ideal opportunities for laundering large volumes of illicit funds; and
  • Conveyancing transactions that involve a disproportionate amount of private funding/cash, which is inconsistent with the profile of the purchaser.

Legal practitioners must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures as a critical first step in complying with AML/ CFT laws.

What are the AML/CFT obligations?

In developing responses to obligations under AML/CFT laws and regulations the following steps must be undertaken:

  • Conduct a Money Laundering and Terrorism Financing Risk Assessment;
  • Develop an AML Program that is proportionate to ML/TF Risks;
  • Establish effective Board and Senior Management oversight of the AML/CFT Program;
  • Appoint an AML Compliance Officer;
  • Establish a Customer Due Diligence (CDD) Program including collection and verification of know your customer (KYC) information including Enhanced and Ongoing CDD controls;
  • Implement a ML/TF Risk Awareness Training Program for staff;
  • Implement a monitoring program to identify unusual and possibly suspicious customer activity, transactions and behaviour;
  • Establish a process to report suspicions and other activity specified by AML/CFT law and regulation;
  • Establish Record-keeping controls; and
  • Maintain the ML/TF Risk Assessment and the AML Program as the business and risks change.

How can AML Accelerate help?

AML Accelerate, drawing on unparalleled expertise and real-world experience, has developed an AML/CFT Program Manual for the legal industry.

Our solutions deliver all the foundational AML/CFT materials including a ML/TF Risk Assessment, an AML/CFT Program, CDD Standards, and an AML Operating Manual, which you can tailor to your specific needs, ensuring your AML/CFT controls are commensurate with your business.

Who has used AML Accelerate in this sector?

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