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Firm Fined for Inadequate FWRA

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The Solicitors Regulation Authority (SRA) assault on firm for breaches of anti-money laundering (AML) rules has continued, with Raegal Limited being fined £1,520 (an amount equivalent to 2.4% of its gross annual domestic turnover for the last financial year). On top of this an order of £1,350 was made for costs.

The penalty was due to the the failing to prevent its client account from being used as a banking facility and failing to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017).

In April 2023, the SRA commenced a forensic AML audit into the firm. On 16 January 2024, a forensic investigation officer prepared a report which identified concerns surrounding the use of the firm’s client account and the firm’s compliance with the MLRs 2017.

The decision by the SRA sates that between 30 June 2017 and 28 February 2024, the firm failed to have in place an appropriate firm wide risk assessment (FWRA) that identified and assessed the risks of money laundering to which its business was subject taking into account all risk factors pursuant to Regulation 18(2) of the MLRs 2017.

In addition, since 30 June 2017, the firm failed to establish and maintain fully compliant AML policies, controls, and procedures (PCPs) to mitigate and effectively manage the risks of money laundering and terrorist financing, identified in any risk assessment (FWRA), pursuant to Regulation 19(1)(a) of the MLRs 2017, and regularly review and update them pursuant to Regulation 19(1)(b) of the MLRs 2017.

No mention is made as to whether there was adequate client matter risk assessments.


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