Spotlight Report - Law & Legal Services

AML and KYC Vulnerabilities

An in-depth look into the issue to help you to identify weaknesses in your existing compliance framework.

Law firms and Legal Services businesses are under mounting pressure to improve their anti-money laundering (AML) and know your customer (KYC) and combating the financing of terrorism (CFT) standards. The sector has long faced criticism for not taking AML and CFT regulation seriously – and has even been accused of aiding and abetting criminal activity.

But scandals, including the Panama Papers affair and suggestions that law firms are helping Russian oligarchs to evade sanctions following the invasion of Ukraine, have caught the attention of authorities across multiple jurisdictions.

KYC and AML are powerful complements to each other and important elements for Law Firms looking to protect themselves against fraud and financial crime. Both involve verifying the identity and legitimacy of individuals and organisations through rigorous checks. In itself, that makes it harder for criminals to operate. In addition, AML checks help to uncover the money trail, understanding where money comes from and how it’s spent so that organisations can ensure it’s not laundered through them.

In this industry report, we examine:

  • Where Law firms and Legal Services businesses may be vulnerable to AML risk
  • The current regulatory environment in the UK, EU, and US
  • The requirements for customer due diligence (CDD) and enhanced due diligence (EDD)
  • Screening for sanctions, ultimate beneficial owners (UBOs), and politically exposed persons (PEPs)
  • How to ensure compliance with AML regulations

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