The onset of the new, anti-money laundering rules has been created headaches and stress among many lawyers.
LawFuel spoke with one of the leading AML/CFT consultancies, AML360, who said one of the greatest areas of misunderstanding from both lawyers and accountants was with regard to the verification of identity of existing clients.
Director Kerry Grass said although the verification was not required for existing clients, unless there is a material change to the client relationship or there is insufficient information about the client, these requirements only fall within the category of ‘standard due diligence’.
“For clients who fall into the category of ‘enhanced due diligence’, the option to postpone identity verification is not applicable.
“Therefore, before 1 July 2018, law firms should have independently verified, through reliable documentation/sources, the identity of their clients and any person acting on behalf of their client that represents either (i) a trust (or another vehicle for holding personal assets), (ii) a client from a country that has insufficient AML CFT measures in place, (iii) a company with nominee shareholders or shares in bearer form and (iv) when the level of client risk dictates that enhanced due diligence should apply,” Ms Grass said.
This requires risk profiling to be carried out across all clients.
“Any law firms that have not yet met the minimum thresholds of compliance will now be forced to dedicate extra resourcing or face the risk of an AML compliance breach and potential harm to reputation.”
LawFuel will be running more content around the new rules to assist lawyers – and to provide feedback on queries relating to the new regime.