Financial crime and crime prevention—law firms
Financial crime and crime prevention—law firms

The following Practice Compliance guidance note provides comprehensive and up to date legal information covering:

  • Financial crime and crime prevention—law firms
  • What constitutes financial crime?
  • Basic regulatory requirements
  • Consequences of getting it wrong
  • Protecting your firm

Forthcoming changes: The UK has voted to leave the EU and this will take place on exit day as defined in section 20 of the European Union (Withdrawal) Act 2018. This has implications for law firms. This Practice Note is likely to be affected. It will be updated as and when relevant implementing legislation is published. For more on Brexit, see Practice Notes: Brexit—anti-money laundering and counter-terrorist financing—law firms and Preparing for Brexit—key considerations and action planning—law firms.

What constitutes financial crime?

Section 1H(3) of the Financial Services and Markets Act 2000 (FSMA 2000) defines financial crime as including any offence involving:

  1. fraud or dishonesty

  2. misconduct in, or misuse of information relating to, a financial market

  3. handling the proceeds of crime, or

  4. the financing of terrorism

This is to be construed widely and would include, for example, financial sanctions, bribery, corruption, money laundering, or even breaches of data security.

Basic regulatory requirements

Area Authority Obligations
Anti-money laundering (AML) Proceeds of Crime Act 2002 (POCA 2002) Report suspicions of money laundering
Counter-terrorist financing (CTF) Terrorism Act 2000 (TA