{"id":26552,"date":"2025-08-01T09:57:30","date_gmt":"2025-08-01T08:57:30","guid":{"rendered":"https:\/\/figsflow.com\/uk\/?p=26552"},"modified":"2025-12-16T11:56:46","modified_gmt":"2025-12-16T10:56:46","slug":"aml-compliance-failures-can-put-you-in-serious-trouble","status":"publish","type":"post","link":"https:\/\/figsflow.com\/uk\/aml-compliance-failures-can-put-you-in-serious-trouble\/","title":{"rendered":"AML Compliance Failures Can Put You in Serious Trouble \u00a0"},"content":{"rendered":"\t\t
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A law firm in South-East London has recently been fined \u00a3114,006 for failures in anti-money laundering or AML compliance.<\/span><\/b>\u00a0<\/span><\/p>

The firm did not break the law. It simply failed to keep its AML paperwork and risk assessments in order. Yet, it got one of the largest fines ever issued by the Solicitors Regulation Authority (SRA).\u00a0<\/span>\u00a0<\/span><\/p>

This should be your wake-up call.\u00a0<\/span>\u00a0<\/span><\/p>

If you are an accountant, bookkeeper or tax adviser handling client funds, you are expected to follow AML rules and be able to prove that you are following all AML rules. Even if no crime is involved, sloppy documentation can still cost you thousands.<\/span>\u00a0<\/span><\/p>

So, <\/span>what exactly went wrong, and how can you avoid the same mistake?<\/span><\/b> Let\u2019s understand in detail. <\/span>\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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What Exactly Does AML Compliance Failure Mean? <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Well, in the case of this firm,<\/span> the regulator found that it had failed to meet two core <\/span><\/b>AML requirements<\/span><\/b><\/a>: <\/span><\/b>having proper Policies, Controls and Procedures (PCPs) and conducting Client and Matter Risk Assessments (CMRAs).<\/span>\u00a0<\/span><\/p>

PCPs are your firm\u2019s written rules for preventing money laundering.<\/span> They explain how you check client duties, monitor transactions and respond to anything suspicious. These need to be kept up to date, reviewed regularly and followed in practice. <\/span>\u00a0<\/span><\/p>

CMRAs are risk checks you carry out for each client or matter. You assess <\/span>how likely it is that the client or transaction could pose a money laundering risk. This is not optional. Every case should have a documented risk assessment.<\/span>\u00a0<\/span><\/p>

In this case, <\/span>the firm did not have a CMRA form or process in place. Their PCPs were also not fully compliant with current rules<\/span><\/b>.<\/span>\u00a0<\/span><\/p>

What\u2019s more, these problems were not spotted during a client complaint or criminal case. They were flagged during a desk-based review by the regulator\u2019s supervision team. And it was enough to result in a six-figure fine.<\/span>\u00a0<\/span><\/p>

The same expectations apply to you. Regulators are not just looking at what you do. Instead, they want to see how you document your AML efforts. And <\/span>if you lack proper documentation of AML checks, you have no defence<\/span><\/b>. <\/span>\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Regulators Are Cracking Down on AML Non-Compliance <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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This incident was not a one-off.\u00a0<\/span>\u00a0<\/span><\/p>

In recent months, several firms have been fined for similar AML compliance failures. The problems look familiar: no firm-wide risk assessments, outdated AML policies and poor or missing documentation. In most cases, these are firms that should have known better and were already part of well-known accreditation schemes.<\/span>\u00a0<\/span><\/p>

Some of the firms fined are members of the Conveyancing Quality Scheme (CQS) or have Lexcel accreditation. Both require strong AML compliance as part of their standards. That did not stop regulators from issuing penalties. It shows that having a badge on your website is not enough if your processes are not effectively implemented.\u00a0<\/span>\u00a0<\/span><\/p>

The Solicitors Regulation Authority (SRA) is now taking a more proactive approach. It is not just responding to reports or client complaints. It is reviewing firms directly, checking how their AML systems hold up and acting where they fall short. <\/span>\u00a0<\/span><\/p>

No one is immune. Whether you are in legal services, accounting or elsewhere, the message is clear: <\/strong><\/span>If you handle client money, you need to have your AML house in order. And you need to be ready to prove it.<\/strong> Accountants, since they handle money directly, should understand\u00a0<\/span>A<\/a><\/span>ML and KYC requirements<\/span><\/a>\u00a0in detail.<\/span>\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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What\u2019s Changing? <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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There has been a small but important change to the UK\u2019s anti-money laundering rules.<\/span>\u00a0<\/span><\/p>

From 31 July 2025, the threshold for submitting a <\/span><\/b>Defence Against Money Laundering (DAML)<\/span><\/b><\/a> report has increased from \u00a31,000 to \u00a33,000<\/span><\/b>. This means if you suspect a transaction that involves criminal property under that amount, you no longer need to file a DAML request before proceeding.<\/span>\u00a0<\/span><\/p>

A DAML report is a part of a suspicious activity report (SAR). It\u2019s what you file when you suspect a client is trying to move dirty money and you want consent from the National Crime Agency before continuing the transaction.<\/span>\u00a0<\/span><\/p>

With the new threshold, small routine payments are less likely to trigger this reporting process. For bookkeepers, this means you can now return small deposits or payments on account even if the relationship ends abruptly without filing a report, as long as the value is under \u00a33,000. <\/span>\u00a0<\/span><\/p>

But let\u2019s be clear. This is not a free pass to ignore suspicious activity. AML compliance is still required at the entry level. You still need to check who you are dealing with, assess risk and document your decisions. The only change is that the rules are now slightly more flexible for low-value transactions. <\/span>\u00a0<\/span><\/p>

In short, <\/span>there is less paperwork for minor issues. But the overall responsibility is still the same<\/strong>.<\/span>\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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A Smarter Way Forward: FigsFlow <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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FigsFlow<\/a> has launched a built-in AML module designed specifically for accountants, bookkeepers and tax advisers. Client onboarding, risk assessments, sanctions screening and ongoing monitoring all happen in one place. Every action generates an automatic audit trail, giving you instant proof of compliance when regulators come knocking.<\/span>\u00a0<\/span><\/p>

FigsFlow stands out for three reasons. <\/span>\u00a0<\/span><\/p>