AML enforcement is tightening and businesses need to take notice
UK regulators continue to ramp up their scrutiny of anti-money laundering (AML) compliance, recent fines and high-profile cases serve as a clear warning that no sector is immune. Whether you're in legal services, financial advice, property, or crypto, the message is clear: AML controls must be robust, documented and regularly reviewed.
In this article, we explore recent developments and what they mean for businesses subject to AML regulations.
A recent fine highlights the risks of weak AML controls
A UK law firm was recently fined for failing to maintain compliant AML systems for over a decade. The breaches included inadequate client risk assessments, poor controls in conveyancing work and a lack of documented procedures.
This case is a reminder that even long-established firms can fall short. Regulators are paying close attention to high-risk areas such as property transactions, and firms that neglect their AML obligations face reputational damage, financial penalties and potential restrictions on their operations.
Crypto-related enforcement reaches record levels
Authorities in the UK recently seized billions of pounds worth of cryptocurrency in connection with a global money laundering operation. This marks the largest crypto-related AML case in UK history and reflects the growing regulatory focus on digital assets.
Businesses that engage with crypto assets, whether directly or through third-party platforms, need to understand their AML responsibilities. This includes enhanced due diligence, transaction monitoring and clear documentation of risk assessments.
Regulators are issuing significant fines for AML failures
The Financial Conduct Authority (FCA) recently reported that it had issued over £180 million in fines, with AML breaches among the most common causes. Key areas of concern included poor transaction monitoring, inadequate sanctions screening and weak governance.
This trend is likely to continue. Firms operating in financial services or advising regulated entities should expect increased scrutiny and ensure their AML frameworks are up to date and fit for purpose.
What this means for your business
These cases highlight the importance of:
- Conducting regular AML audits to test the effectiveness of controls.
- Documenting policies and procedures clearly and consistently.
- Providing ongoing training for staff involved in customer due diligence.
- Ensuring independent oversight of AML compliance.
Crowe’s AML specialists have been supporting clients for over 12 years. We provide independent audits, policy reviews and tailored recommendations to help firms meet their obligations under the Money Laundering Regulations (MLRs 2017).
Why an AML audit is more than a regulatory requirement
Under section 21 of the MLRs 2017, firms are required to implement internal controls and, where appropriate, establish an independent audit function. This function should:
- evaluate the adequacy of AML policies and procedures
- make recommendations for improvement
- monitor implementation and compliance.
Importantly, the audit must be conducted by someone not involved in day-to-day AML operations. This ensures independence, objectivity, helps firms identify blind spots and remain fully compliant with AML regulations.
Act now before regulators do
AML enforcement is no longer reserved for the most serious breaches. Regulators are acting on long-standing weaknesses, and businesses that delay improvements risk being fined.
If you’re unsure whether your AML framework meets current expectations, now is the time to act. A proactive review can help you identify gaps, strengthen controls and demonstrate your commitment to compliance.
Crowe can help you with the above as part of their AML service, please contact Julie James for more information.
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