Seminars target money laundering awareness

The Society has recently worked in partnership with the Scottish Business Crime Centre to hold six well attended anti-money laundering seminars around Scotland. Speakers at each event consisted of the Society’s Professional Practice Department, local money laundering reporting officers, and law enforcement (represented by speakers from the Serious Organised Crime Agency (SOCA) and local fraud intelligence units).

From the outset the threat posed to Scottish solicitors by organised crime was stressed through reference to the Scottish Organised Crime Group mapping project, which found that there are 367 serious organised crime groups impacting on Scotland. All regions of Scotland have local groups, while the 20 largest groups are operating throughout Scotland. Eighty one of these groups are involved in money laundering, with property investment being one of the most common methods used. There are therefore clearly large amounts of criminal funds circulating in Scotland, with a significant risk that criminals will look to use professionals such as solicitors to launder their funds.

The Professional Practice Department summarised solicitors’ reporting obligations under the Proceeds of Crime Act, concluding: “the only sure way of avoiding an offence is to make an authorised disclosure, so if in doubt… report to SOCA”. Speakers from SOCA then outlined the value of suspicious activity reports (SARS), both in uncovering and tackling specific crimes and as a wider intelligence-gathering tool. For solicitors SOCA had the following key messages:

• reporting from the regulated sector (including solicitors) is key in uncovering criminality;
• serious organised crime groups value the knowledge of solicitors and value access to solicitors’ client accounts as a means of laundering their proceeds;
• solicitors should protect themselves through proper customer due diligence work;
• be wary of the authenticity of documents;
• continual monitoring of business relationships and transactions is crucial;
• solicitors should ensure that their SARS reports have as much detail as possible to allow assessment of the issue (e.g. a clear reason for suspicion; postcodes; dates of birth; telephone numbers).

Seminar and other feedback to the Society in recent months has indicated that there would be a value in clarifying responses to some frequently asked questions on anti-money laundering issues. These are being drafted and will appear on the Society’s website very soon. In addition the Society is working on other initiatives to ensure there is awareness of the risks facing the profession, including a bulletin focusing on mortgage fraud risks and how to manage these.

• Ian Messer, Director of Financial Compliance