The recent article published by The Negotiator highlights concerns from the Property Lawyers Alliance (PLA) regarding the perceived excessiveness of anti-money laundering (AML) regulations in the conveyancing sector, arguing that these controls are “choking” the homebuying process with red tape, delays, and financial burdens. While these frustrations are understandable, it is crucial to recognise the indispensable role that AML controls play in protecting the integrity of the UK property market, safeguarding clients, and upholding the legal profession’s reputation.
The Real Threat: Money Laundering in Property Transactions
Real estate is globally recognised as a high-risk sector for money laundering. The high value and relative stability of property make it an attractive vehicle for criminals seeking to legitimize illicit funds. The UK National Risk Assessment 2020 and regulatory bodies have consistently identified the legal and property sectors as being vulnerable to such abuse, particularly through complex ownership structures and cross-border transactions. Without robust AML controls, the property market would be exposed to significant financial crime risks, undermining public trust and potentially facilitating the movement of criminal proceeds through the economy.
Why AML Checks Are Not Just Bureaucracy
AML requirements—including customer due diligence (CDD), enhanced due diligence (EDD) for high-risk clients, ongoing monitoring, client matter risk assessments, and suspicious activity reporting—are not arbitrary hurdles. They are essential safeguards that:
- Prevent criminals from using property transactions to launder money.
- Protect law firms and conveyancers from inadvertently facilitating criminal activity, which could result in severe legal and reputational consequences.
- Ensure that the UK remains a global leader in combating financial crime, supporting both national security and the integrity of its financial system.
Addressing the Burden: Proportionate and Evolving Compliance
It is true that AML compliance imposes additional responsibilities on conveyancers, including the need for risk assessments, staff training, independent AML audits, and documentation. However, these measures are proportionate to the risks involved. Modern compliance technologies and evolving best practices are making these processes more efficient and less intrusive for both professionals and clients. The focus is on dynamic, risk-based approaches rather than one-size-fits-all bureaucracy, allowing firms to tailor their procedures to the specific risks they face.
Client Experience and Market Integrity
While some clients may find AML checks intrusive, these measures ultimately serve their interests by ensuring that their transactions are safe and the market is not tainted by criminal activity. Conveyancers have a duty not only to their clients but also to society at large to prevent the misuse of the property market for illicit purposes. The inconvenience of providing documentation is minor compared to the potential harm caused by unchecked financial crime.
SRA Enforcement: A Necessary Deterrent
The fines and enforcement actions highlighted by the PLA are not evidence of SRA overreach, but rather of the seriousness with which the UK treats financial crime. These penalties serve as a deterrent, encouraging firms to maintain high standards and protecting the sector from systemic risks.
Conclusion
Rather than viewing AML controls as a “crippling burden,” the conveyancing profession should recognize them as critical tools for protecting clients, the market, and the reputation of legal professionals. The solution is not to weaken these controls, but to continue refining them—leveraging technology, risk-based approaches, and clear guidance—to ensure they are effective, proportionate, and as streamlined as possible. In a world where financial crime is constantly evolving, robust AML compliance is not just a regulatory obligation; it is a professional and ethical imperative.