Receiving funds—money laundering concerns
Receiving funds—money laundering concerns

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

  • Receiving funds—money laundering concerns
  • The risks
  • The requirements
  • Protecting your business

Your anti-money laundering (AML) and counter-terrorist financing (CTF) obligations are set out in the Proceeds of Crime Act 2002 (POCA 2002), the Terrorism Act 2000 (TA 2000), and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692.

Putting 'dirty' money through a solicitors' client account can 'clean' it so you and your account are attractive to money launderers. You must have systems in place to guard against use of your account in this way.

Remember you must ensure you do not facilitate money laundering, whether or not money passes through your account.

The risks

The SRA risk assessment says that you are held in a position of trust, and your client account can be viewed as a way of making criminal funds appear to have a genuine source. Criminals target client accounts as a way of moving money from one individual to another through a legitimate third party under the guise of a legal transaction without attracting the attention of law enforcement agencies. The SRA reminds you that you must never allow your client account to be used as a banking facility, or to pass funds through it without a legitimate underlying legal transaction. You should be aware of any attempt to pay funds into a client account without a genuine reason,