Counterpoint: Why Robust AML Controls Are Essential in Conveyancing

The article published earleir this year 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 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. 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 client 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 from unwittingly facilitating criminal activity, which can lead to severe legal and financial consequences.
Maintain the UK's international standing as a clean and transparent place to do business.

Addressing the Burden

While the administrative burden on conveyancing firms is undeniable, the solution is not to weaken AML regulations but to streamline their implementation. This can be achieved through:

Investment in Technology: Utilising digital identity verification and AML compliance software to automate and speed up checks.
Improved Guidance: Ensuring firms have access to clear, practical guidance from regulators like the Solicitors Regulation Authority (SRA) and the Legal Sector Affinity Group (LSAG).
Collaboration: Working together as an industry to share best practices and develop more efficient compliance processes.

The Cost of Non-Compliance

The alternative to robust AML controls is far more costly. Compliance failures can result in:

Hefty Fines: SRA AML Audits have resulted in significant financial penalties for AML breaches.
Reputational Damage: Losing the trust of clients, lenders, and the wider public.
Legal Action: Potential criminal prosecution for firms and individuals found to have facilitated money laundering.

Conclusion

AML regulations are not intended to impede the homebuying process but to ensure its safety and legality. While the current system may have its challenges, a robust AML framework is essential for a healthy and secure property market. Rather than calling for a reduction in "red tape," the focus should be on how we can fulfill our AML obligations more efficiently and effectively. Protecting our profession and the public from the scourge of money laundering is a responsibility we must all take seriously.

FCA AML Audit: The SRA Is Out, the FCA Is In

For years, law firms prepared for AML scrutiny with one regulator in mind: the SRA. That era is over. The UK Government has confirmed a fundamental shift in supervision. AML and counter-terrorist financing oversight is moving from the SRA to the Financial Conduct Authority (FCA). This is not a cosmetic change. It is a full regulatory reset. If your firm is still thinking in terms of an internal review, an FCA AML audit will feel very different, financially, operationally, and reputationally. What Makes an FCA AML Audit Different The SRA regulates professional standards. The FCA enforces financial crime controls. That distinction matters. An FCA AML audit is not designed to guide or educate. It is designed to assess risk to the financial system and determine whether enforcement action is required. This is precisely why firms can no longer rely on internal reviews alone. An FCA AML audit will expect to see independent challenge, most ...

How Often Should Your Firm Conduct an Independent AML Audit?

In the world of AML compliance, there is a significant difference between doing your work and proving that your work is effective. Anti-Money Laundering (AML) compliance is no longer a "set it and forget it" task. For firms regulated under the Money Laundering Regulations (MLR 2017), the requirement for an independent AML audit is a critical hurdle. But a common question persists among MLROs and Compliance Officers: How often do we actually need to do this? 1. The Regulatory Starting Point: "When Appropriate" The law (specifically Regulation 21 of the MLR 2017) states that a relevant person must establish an independent audit function "where appropriate, with regard to the size and nature of its business." While the legislation doesn’t give a hard calendar date, the consensus among regulators—including the SRA and the Legal Sector Affinity Group (LSAG)—is that for most firms, an audit should be conducted at least every 2 yea...

Argie Bargie over Home Information Packs

In response to a question from Conservative MP David Amess on what methodology would be used to use to evaluate the effectiveness of the Home Information Pack programme, Communities and Local Government Minister Ian Austin was involved in heated argument. The wording of the debate ( reported in Hansard ) makes interesting reading, so I thought I would share it with you : Mr. David Amess (Southend, West) (Con): What methodology his Department plans to use to evaluate the effectiveness of the home information pack programme; and if he will make a statement. Mr. Andrew Mackay (Bracknell) (Con): What methodology his Department plans to use to evaluate the effectiveness of the home information pack programme; and if he will make a statement. Mr. David Jones (Clwyd, West) (Con): What methodology his Department plans to use to evaluate the effectiveness of the home information pack programme; and if he will make a statement. The Parliamentary Under-Secretary of State for Communities and Local...

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