AML and sanctions activities

The Law Society is regarded internationally as one of the most effective leaders in legal profession anti money- laundering (AML) reform, driving robust engagement and supervision, embracing international standards and expectations, while safeguarding access to legal services and the independent regulation of lawyers: key principles that protect the rule-of-law role of lawyers in democracies.

The Society's AML and sanctions activities are currently The Policy Department’s AML section leads the coordination of the Society’s AML and sanctions role, representing the Society at national and international level on solicitor and Law Society AML and sanctions issues. The AML section also manages the Society's AML and sanctions outreach (which helps solicitors navigate compliance), general AML advisory function, and AML horizon scanning and strategy. The Regulation Department continues to deliver its important statutory role as competent authority, ensuring solicitor AML compliance.

National policy

The AML section continued to represent the Society as an associate member on Ireland’s national AML Steering Committee, which is led by the Department of Finance. This work comprises participating and responding to the steering committee’s different working groups on statistics and enforcement, including the development of high-level recommendations to enhance Ireland’s framework.

A significant development during the year was Ireland’s announcement of its interest in becoming the host country for the EU’s AML Authority (AMLA). The Society fully supports the work of the national AML Steering Committee in leading Ireland’s bid, and the AML section is in the process of developing key cross-departmental content for Ireland’s bid document.

The AML section responded to policy queries from the Department of Justice’s AML Compliance Unit, as required.

The AML section also participated and engaged in the important work of Ireland’s Private Sector Consultative Forum.

EU and international policy

The AML section continued to ensure solicitor and Law Society contributions to EU-level AML policy development through participation in the CCBE’s AML Committee. The progression of the EU Commission’s AML package remained a primary focus, alongside strategy development on issues such as responses to professional enablers, AML supervisory approaches, and AML best practices.

On sanctions, the AML section continued to provide its expertise to the CCBE’s policy response and engagement with the commission on this rapidly evolving area.

Policy outreach

The AML section remains strongly focused on the provision of extensive AML and sanctions outreach initiatives to solicitors, while also increasing awareness and understanding of existing and emerging money-laundering and terrorist financing (ML/TF) risk to the legal sector. Outreach initiatives include resources, guidance, training, the AML Helpline, and the Sanctions Resource Hub.

This year, the dedicated AML area of the website received 5,318 visits from 3,680 solicitors, indicating that many solicitors return to access and engage with resources.

Analytics figures also demonstrate exceptionally strong engagement, with an average session length of six minutes 25 seconds, which is over twice the length of time visitors spend accessing other resources available from the Law Society (site average is 2 mins 57 secs). The AML area has a bounce rate of 17.13% (site average 39.69%), which shows the extent to which solicitors stay within the AML area to engage with, and download, the available resources. The full suite of downloadable AML resources for solicitors remained popular during the year.

Training is a key outreach channel for the AML section to engage with solicitors, trainees, and all staff working in solicitor firms. Core and comprehensive free AML training is available to anyone working in a solicitor’s firm, on demand, via the LegalEdTalks platform. This training covers the current legislative framework for solicitor AML, the legal sector risks, statutory business and customer risk assessments, customer due-diligence (CDD) specifics (standard, enhanced and simplified), and the reporting obligation. During the 2022 continuing professional development cycle, over 3,000 solicitors participated in free AML training bespoke to solicitors. This was the largest number of solicitors to avail of AML training than in any previous year. Significantly, over 8,000 solicitors have now availed of free AML training since it was first launched as part of the Law Society’s LegalEdTalks series. Solicitors continue to find the unique ‘traffic-light’ approach to navigating ML/TF red flags especially helpful, and this resource is available free and on demand by visiting the AML Update Session. Tailored AML training has also been developed by the AML section for the Society’s Legal Services Excellence Standard, which is due to launch later this year.

Throughout the year, email and telephone support continued to be provided to solicitors navigating complex AML duties via the AML Helpline, alongside instances of court orders obtained by An Garda Síochána to access client files. The helpline assisted solicitors navigating best practice across a panoply of practice areas, such as geographic high risk, source of funds risk, updating PCPs, CDD on companies, will drafting, reporting duties, family law, transfers to online banks, and sanctions.

The AML section’s Sanctions Resource Hub continues to help solicitors ensure their compliance with EU sanctions in response to Russia’s invasion of Ukraine.

General advisory on AML

The AML section continued to build beyond solicitor AML into the general AML advisory sphere, advising the Society’s departments and committees on beneficial ownership registers, conveyancing practice, and supervisory methodologies and international best practice.

The section will continue to provide AML advices to the eConveyancing Project in the coming year, including developing a digital risk-assessment tool and digital-identity verification process.

Supervision of solicitor AML compliance

The Regulation Department continued to supervise solicitor AML compliance as part of the Law Society’s responsibility for financial regulation of the profession. These activities satisfy EU requirements with regard to ‘fit and proper persons’. The Society’s 11 investigating accountants examine AML compliance, with approximately 137 firms inspected in the year to June 2023.

Assessments involve a review of the firms’ policies, controls, and procedures (PCPs), with evidence required of business-risk assessment, client-risk assessments, client due diligence, and staff training. Investigation reports that issue after every inspection contain a dedicated section examining AML matters.

When a firm is inspected and less than full compliance is observed, the Society, depending on the nature of the non-compliance, will afford the solicitor time to take corrective action. In some cases, the Society’s Regulation of Practice Committee (ROPC) requires the solicitor to submit documentation demonstrating remedial action. In other cases, the ROPC can go further and require the solicitor to appear before the committee to explain the action taken to rectify the shortfalls in their procedures. When a solicitor fails to implement satisfactory procedures to ensure compliance with the Solicitors Accounts Regulations and with the Solicitors (Money Laundering and Terrorist Financing) Regulations, the Society will re-investigate the firm until such time as it appears that satisfactory procedures have been put in place. The Society has the power to refer evidence of non-compliance to the Legal Practitioners Disciplinary Tribunal and/or take any other steps necessary. Some of the referrals during the year included AML issues. In compliance with the statutory duty to report suspicions, the Law Society’s Money-Laundering Reporting Committee submitted 31 reports to Ireland’s relevant authorities.

The Society observed a substantial decrease in non-compliance in 2022, which may be indicative of enhanced AML compliance within the profession. This is likely due to ongoing supervision and outreach (such as free core AML training having reached over 8,000 solicitors nationwide). As firms have updated their PCPs in recent years, partial compliance observations are increasingly arising from customer risk assessments not having been documented. Firms can ensure compliance with the duty to document customer risk assessments by using the following key AML resources:

  1. Risk Factor Questionnaire for Customer Risk Assessment,
  2. Document Your Thought Process’ forms for customer risk assessment,
  3. Viewing the free 30-minute AML Update Session, available on demand.

Priorities for the coming year

In recent years, the Law Society had the opportunity to garner key lessons on international and EU AML best practice through the European Commission, Council of Europe and IMF evaluations. It is committed to implementing these lessons as we continuously step up to play our part in preventing money-laundering risk in the legal profession, and securing the profession’s compliance with AML duties. The Society will deliver any essential change from these key lessons as we embrace a culture beyond mere compliance, to asking what more we can do to prevent money-laundering risk in the legal profession and protect Ireland’s position as an AML leader on the global stage.

Accordingly, the Law Society is in the process of reviewing and updating its AML strategy to identify and implement any necessary transformation to ensure that its AML regulatory policy meets national and international standards. Excellence in AML policy, supervision and outreach are already strategic priorities for the Society, and it is anticipated that increased resources will need to be allocated to both of these functions in the coming year.