Money laundering & fraud
Introduction
The Money Laundering Regulations 2007 affect all law firms in
Scotland, regardless of whether the firm deals with client
funds.
Regulation 3 sets out the type of person to whom the Money
Laundering Regulations 2007 apply. These are referred to as
"relevant persons". While the definition of "independent legal
professional" contained in regulation 3(9) would appear to be the
most obvious application of the regulations to the work of
solicitors, firms must be aware that regulations 3(6), 3(8), 3(10)
and 3(11) can also apply. These sections relate to insolvency
practitioners, tax advisers, trust or company service providers,
and estate agents.
Many solicitors do not come within the definition of "relevant
person", as described in the regulations. However, you should be
aware that rule 24 of the
accounts rules extends the scope of the regulations to treat
all business undertaken as if it were undertaken by a relevant
person. In doing so, the Society is mindful of the risk-based and
proportionate basis on which the regulations are founded and will
expect solicitors to apply the same considerations whether business
is caught under the regulations and by rule 24, or by rule 24
alone.
In practical terms, all firms must assess the risk for each
transaction and ensure that they have sufficient information to
verify the identity of the client.
Further information is available in the Anti-money
laundering section.
Role of the society
In terms of the regulations, the Law Society of Scotland, as the
professional body for Scottish solicitors, is the supervisory
authority for relevant persons regulated by the Society. While the
Society is committed to the education and support of our members in
preventing the Scottish legal system being used to launder criminal
or terrorist funds, it also has a duty under the regulations to
take appropriate action where members do not comply with the
requirements of the regulations.
Firms should be aware that the Society has adopted the JMLSG Guidance Part 1 in full. The Law
Society Guidance Part 2 provides further clarification and
guidance specific to law firms in Scotland. You are encouraged to
refer to these resources, although you must read the Money Laundering Regulations 2007 first to
ensure the guidance is taken in context.
In August 2011 the Society signed an Information Sharing
Protocol with the Scottish Crime Drug Enforcement Agency (SCDEA),
which is available in the related files on the right of this
page.
Money laundering subscription email service
HM Treasury's Financial Crime Team provides a money laundering
subscription email service that will be of interest to all firms of
solicitors. The purpose of the service is to allow the Treasury to
communicate directly with subscribers when there are important
anti-money laundering developments.
Regulators such as the Law Society of Scotland have been asked
to highlight this service to our member firms. Instructions for
subscribing to this service are available at www.hm-treasury.gov.uk/fin_crime_Mailinglist.htm.