Are you feeling the weight of Anti-Money Laundering compliance? You’re not alone.

New industry standards and guidelines are adding complexity, and the cost of non-compliance can be significant. 

Our new infographic reveals the hidden costs of manual KYC checks, missed deadlines, and non-compliance penalties. You’ll also discover how OneSearch can help you significantly reduce these costs and improve your bottom line. 

As we enter May, conveyancers across the country are looking ahead to a predicted busier few months. 2024 is still expected to be a year of positive developments in the UK property market, with interest rates and affordability pressures remaining favourable.

Conveyancers are now making changes to their systems, policies, and procedures in preparation for a much busier 2024, especially in the area of Anti-Money Laundering (AML) checks. So, as a conveyancing practice preparing for the coming year, what do you need to know about AML compliance in 2024?

Laser-like focus by regulators on conveyancer AML compliance

With the publication of SRA’s Anti-Money Laundering annual report 2022-23 in Autumn 2023, it is now 100% clear that regulators are demanding nothing but absolute compliance by law firms and conveyancers with their AML guidelines. During 2023, both the SRA and the CLC uncovered widespread AML code breaches and non-compliance AML by UK law firms. According to the CLC, of the 52 conveyancing practices they inspected:

  • 19 had inadequate AML documented policies or procedures
  • 18 had inadequate AML client due diligence procedures, and
  • 15 had inadequate AML firm-wide risk assessments.

Similarly, the SRA’s own assessments revealed that only around one-third of firms were not fully compliant with their AML obligations.

As the CEO of the SRA, Paul Philip, stated in October 2023:

“Over the coming year [2024], we will increase our work in this area, including undertaking proactive sanctions inspections and desk-based reviews to check how well firms are managing their risk and whether they are complying with licences issued by the Office of Financial Sanctions Implementation. Where we find sanctions breaches, we won’t hesitate to take enforcement action”.

Three-level risk assessments

In 2024, the regulators want to see that all conveyancers are now carrying out detailed risk assessments at the three levels of the:

  • Client
  • Matter, and
  • Organisation

It is not enough for conveyancers to use a ‘check-box’ approach to the three types of risk assessments. The regulators are looking for a detailed, consistent, and integrated approach when it comes to conveyancing risk assessment. Effective policies and training will be vital in ensuring that risk assessments are conducted properly and at the level required to meet the compliance requirements. Risk assessment templates should also be tailored to the organisation, geography, and the type of service being provided.

Conveyancers must go beyond the AML basics in 2024

Regulators have made it clear that they expect law firms and conveyancers to go beyond simply AML check measures; this includes carrying out (where necessary):

  • Source of funds checks
  • Source of wealth checks
  • PEP and sanction checks
  • Enhanced checks

Again, clear and up-to-date policies, coupled with effective training, will be key to making sure that every member of your conveyancing team is carrying out these enhanced checks when they need to and in a consistent and thorough manner.

The SRA and the CLC are also keen to see the wider adoption of proactive, ongoing monitoring measures, which is a key requirement of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. Monitoring involves continually monitoring the risk profile of existing clients to automatically detect problems and take action if they arise. Indeed, the SRA has said ongoing monitoring is “one of the most effective controls firms can put in place to protect against money laundering”.

Introducing OneSearch AML

OneSearch AML is a new-generation automated digital ID verification solution for commercial and residential conveyancers that overcomes all AML compliance challenges identified by the CLC and SRA. It can be easily integrated into your existing conveyancing system, making its adoption and use extremely straightforward for your team members.

OneSearch AML automatically takes care of all the AML checks and processes necessary for compliance in 2024, including:

  • Verifying the identity and addresses of your clients using a simple automated workflow through a mobile app or online portal.
  • Combining ID verification and real-time facial recognition technology to spot masks, impersonations, or fakes with easy-to-use anti-spoofing liveness tests.
  • Using biometric scanning, NFC technology, secure encryption, and cloud-based storage to ensure that ID checks are safe, accurate, and effortless.
  • Carrying out a range of national database checks, including enhanced checks, seamlessly and automatically, ensuring that you know everything you need to know about your clients and,
  • Ongoing monitoring of AML and KYC data, ensuring that any changes, developments, or updates to customer profiles are carried out automatically over a 12-month period.

Final words

If you haven’t started taking action already, now is the time to do so.

2024 is expected to be a busy and successful year for the conveyancing sector in the UK. By putting in place everything necessary to underpin your AML compliance in the coming weeks and months, including workflow and monitoring systems coupled with effective training, you can relax in the knowledge that when instruction numbers pick up, you will remain AML compliant.

As a ready-made and proven solution for AML compliance in 2024 and beyond, OneSearch AML makes the transition to full compliance as simple and straightforward as possible.

This weekend saw OneSearch host a corporate hospitality day at Sandy Park, Exeter, to witness the West Country derby between Exeter Chiefs and Bath.

With this being the Chief’s penultimate home fixture of the season and with visitors Bath performing well in the Gallagher Premiership, this fixture was not to be missed!

James Shepherd, Regional Sales Manager for OneSearch, posted after the event: “A clinical display by Bath against the Exeter Chiefs was by far and away the only disappointment of a fantastic day hosting our OneSearch clients and guests at a sun-soaked Sandy Park on Saturday!!”

The Q1 2024 release of Landmark’s Residential Property Trends Report is now available. This report contains the most recent data from the residential property transaction pipeline, covering listings, SSTC/SSTM, searches ordered and completions. 

Our latest data gives reason for cautious optimism: listing volumes remain strong, building steadily through Q1 ‘24 in England and Wales. Listing numbers in Scotland also began on a positive footing. 

Key findings from Q1 ‘24 include: 

  • In England and Wales, listing volumes in Q1 ‘24 were up 5% vs Q1 ’19. Listings in Scotland were down just 2% in Q1 ‘21 vs Q1 ‘19.  
  • SSTC volumes in England and Wales for Q1 ’24 tracked 32% below Q1 ‘19, with SSTM levels in Scotland 22% down vs Q1 ‘19.
  • Completion volumes in England and Wales for Q1 ‘24 were down 41% compared to Q1 ‘19 levels. In Scotland, completions were down 2% in Q1 ‘24 vs Q1 ‘19. 

Download the Cross Market Activity edition covering England, Wales and Scotland, unveiling the latest residential property market data and insight for Q1 ‘24.  

We trust you’ll find this report to be a valuable guide as we move into the second quarter of 2024.

 

When carrying out Anti-Money Laundering checks on clients, all regulated industries must identify PEPs and sanctioned individuals during onboarding, to comply with KYC and AML requirements.

In this post, we take a deep dive into what they are, who meets the criteria, and explore best practices for your firm, safeguarding you and your business from any financial or reputational perils.

What is a Politically Exposed Person?

A PEP is an individual who is or has been entrusted within a prominent public institution, making them susceptible to corruption. Under anti-money laundering legislation, if a client is identified as a PEP, enhanced due diligence (EDD) is required.

Who specifically classifies as a Politically Exposed Person?

Overall, the list of PEP individuals includes, but is not limited to, heads of states, heads of governments, ministers, MPs, members of high-level judicial bodies such as high courts, as well as family members and close business associates of all the above.

Based on Money Laundering Regulations and UK Government guidance, PEPs are listed into tiered categories depending on their role. For example, Heads of State and Government would be regarded as Tier 1 while mayors and members of local councils would be Tier 4. Under UK Government guidance the expectation is firms should be identifying Tier 1 & 2 PEPs as a minimum.

My firm has identified a PEP, should we cease working with them?

If your client has been flagged as a PEP, you should apply enhanced due diligence measures to the case. This will differ on a case-by-case basis, but this does not automatically mean you should cease business.

Law society guidance suggests you must:

  • Get senior management approval for the business relationship
  • Take adequate measures to establish the source of wealth and source of funds
  • Closely monitor the business relationship throughout

If you know or suspect a money laundering offence is taking place, you must make a disclosure to your firm’s money laundering reporting officer (MLRO).

What about Sanctions?

In addition to enhanced due diligence, all firms are also required to ensure they are not working with sanctioned individuals.

Sanctions and sanctions lists serve as a critical safeguard against financial crime. Businesses use sanctions checks to prevent themselves from getting involved with sanctioned entities. This way, businesses not only avoid the risk of non-compliance fines but also safeguard their reputation in the process. Conducting both PEP and sanction checks is crucial for businesses to minimize the chances of engaging with high-risk individuals or entities and to maintain a robust due diligence process.

Where I can I find out more?

OneSearch AML empowers you to navigate the complexities of due diligence with ease. Our innovative technology simplifies the onboarding process, saving you valuable time without compromising security.

In the ever-evolving world of Anti-Money Laundering (AML), ongoing monitoring plays a crucial role in mitigating risks and ensuring compliance. This is especially true in the realm of conveyancing, where large sums of money are changing hands.

This coffee-break article aims to shed light on ongoing monitoring in AML for conveyancing within England and Wales.

What is ongoing monitoring in AML for conveyancing?

Ongoing monitoring is the continuous process of identifying, assessing, and mitigating money laundering risks throughout the conveyancing transaction. It involves regular reviews of customer due diligence, monitoring transactions for suspicious activity, and reporting any concerns to the authorities.

How often should ongoing monitoring be done?

There’s no one-size-fits-all answer to how often or how long you need to monitor your customers’ activity. Instead, regulations require ‘ongoing monitoring’ that adapts to each business relationship. This means regularly checking conveyancing transactions (and sometimes, where necessary, the source of funds) to see if they match your understanding of the customer, their business, and their risk level. Basically, the higher the risk, the deeper your ongoing monitoring should be.

We empower you to customize your monitoring for each customer, allowing you to focus on those who pose the highest risk.

When should ongoing monitoring take place?

Ongoing monitoring for AML in UK conveyancing should ideally happen throughout the entire client relationship, not just at the beginning.

Here are some key points to consider:

  • Continual Basis: The Law Society recommends a system of file reviews or reminders to ensure ongoing monitoring is applied
  • High-Risk Clients: All clients should be monitored, but those identified as high-risk require enhanced due diligence and more frequent monitoring
  • Trigger Events: Specific situations can trigger the need for additional CDD checks, which essentially act as a form of ongoing monitoring. (Change of name, inconsistent transactions, reluctance to meet in person)

Why is ongoing monitoring important in conveyancing?

Conveyancing deals are particularly susceptible to money laundering due to the high transaction values and the involvement of various parties. Ongoing monitoring helps to:

  • Identify suspicious activity: By regularly reviewing transactions and customer information, red flags like large cash payments, unusual source of funds, or inconsistencies can be identified and investigated
  • Mitigate risks: Early detection of suspicious activity allows for taking timely action, such as seeking clarification from the customer, refusing the transaction, or reporting to the authorities
  • Demonstrating compliance: Robust ongoing monitoring demonstrates to regulators that firms are taking AML obligations seriously and have measures in place to combat financial crime

How can I implement ongoing monitoring in my conveyancing practice?

Here are some steps you can take:

  • Develop a risk assessment: Identify the ML risks specific to your practice and tailor your monitoring procedures accordingly
  • Train your staff: Ensure your staff is aware of their AML obligations and how to identify and report suspicious activity
  • Use technology: Consider using technology solutions to automate some aspects of monitoring, such as transaction monitoring and sanctions screening
  • Seek professional advice: Consult with an AML expert for guidance on implementing effective monitoring procedures

What are some resources available to help me with ongoing monitoring / AML?