OPBAS has also published a report on supervision of PBSs, including the Solicitors Regulation Authority (SRA). The report noted that ‘the average fine across both sectors remains low (just under £3,000), raising the question as to whether it is a credible deterrent to AML non-compliance’. One could be forgiven for thinking that success is measured by statistics on regulatory action, fines and revocation of practice rights, when a key role of a regulator is to educate and inform, ensuring compliance and preventing breaches. Enforcement action often relates to past failings so may be misleading as an indicator of current status on prevention of economic crime: by way of example, we are currently advising on an alleged breach ten years ago.
Rather ominously, the report noted that some PBSs tended to give their supervised population too much time to rectify their AML deficiencies before deciding whether to take a more robust action. 21.74% of legal sector visits resulted in informal action, and 6.93% resulted in formal action. Although these figures do not relate solely to the SRA, the SRA regulates the largest proportion of the legal sector.
The SRA is continuing to visit firms and has updated its guidance on firm inspections. The Ministry of Justice has published an impact assessment on a proposed new proactive information request power for the SRA to use in relation to economic crime contained in the Economic Crime and Corporate Transparency Bill. We remain unconvinced of the need for this, given the SRA’s existing statutory powers.
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