The regulatory honeymoon is well and truly over. As we move to 2026, the SRA Sanctions Audit has evolved from a peripheral compliance check into a central pillar of legal supervision. Firms still treating sanctions as a minor subset of AML are now finding themselves directly in the crosshairs of the Solicitors Regulation Authority.
While the industry anticipates a potential migration of AML supervision to the FCA, the current focus remains squarely on the SRA Sanctions Audit. The regulator has doubled down on its remit, initiating a wave of desk-based reviews and deep-dive inspections. Whether you are a small firm or a global player, the SRA Sanctions Audit expectations for 2026 are non-negotiable.
The 2026 Inspection Landscape
The SRA Sanctions Audit roadmap is clear. Remote desk-based reviews are now targeting high-risk sectors, specifically firms involved in conveyancing, trust and company services, or those with international client links. These are not light-touch queries. An SRA Sanctions Audit is designed to probe whether your controls are genuinely embedded in your daily operations or just gathering dust on a shared drive.
Onsite inspections have also shifted. Every standard AML visit now incorporates a comprehensive SRA Sanctions Audit. The regulator is no longer looking at money laundering in isolation; they are assessing how you identify, manage, and escalate sanctions risk as a distinct threat.
Lessons from Recent Failures
Data from 2025 revealed that nearly 500 firms lacked adequate controls, missing everything from basic risk assessments to robust screening processes. These firms are the primary targets for an SRA Sanctions Audit in 2026. The trigger for this crackdown is a simplified but more demanding UK framework.
The move to the Single UK Sanctions List means firms must have one definitive source of truth. Relying on outdated dual-list systems will almost certainly lead to a failed SRA Sanctions Audit. Furthermore, the new General Licence for legal services requires meticulous record-keeping. If you cannot demonstrate a clear internal process for reporting work under this licence, you will struggle during an SRA Sanctions Audit.
Bridging the Implementation Gap
The SRA Sanctions Audit is no longer a tick-box exercise. SRA auditors will be focused on the implementation gap. To survive an inspection, you must have:
- A dedicated sanctions risk assessment or sanctions policy that analyses exposure to designated persons and jurisdictions.
- Documented screening procedures that occur at onboarding and at regular intervals for existing clients. Good CMRAs have this.
- Evidence of staff training regarding reporting obligations to the Office of Financial Sanctions Implementation.
If your staff cannot explain how to handle a sanctions alert or when to report a suspected breach, your SRA Sanctions Audit may trigger a full SRA AML Audit or result in enforcement action.
High Stakes and Fining Powers
This shift represents a significant regulatory culture shock. The frequency of the SRA Sanctions Audit is increasing at the same time the regulator’s fining powers have expanded. With enforcement outcomes nearly doubling in recent months, the financial and reputational cost of a failed SRA Sanctions Audit is at an all-time high.
The SRA is now using a data-led approach, arriving for inspections with a pre-analysed view of your firm’s risk profile. To navigate this new era of oversight, you must move beyond policy and focus on demonstrable operational controls. Investing in robust governance now is the only way to ensure your next SRA Sanctions Audit is a success.
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