We require complete separation from Law Society to police money laundering, SRA tells Treasury

The Solicitors Regulation Authority (SRA) has opened a 2nd front in its campaign for complete separation from the Law Society by appealing to the Treasury to intervene over the concern of money laundering.

The SRA said that instead of putting in location safeguards to make sure enough separation in between regulation and representation in anti-money laundering (AML) supervision, the Treasury ought to impose actual separation.

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In its reaction to a call for details from the Treasury on strategies to shock the AML supervisory regime, the SRA went on: AML supervisors must be independent from interference or control from any representative body operating on behalf of the profession.

Without different bodies for representation and policy, we do not believe that there can be totally efficient AML guidance. Public self-confidence is vital and it is important that vested interests are unable to, or are perceived as being able to, impact governing activities in this extremely important area.

Consumers have greater trust in specialists who are controlled by an independent regulative body, rather than by the occupation itself.

Reacting to the Treasury’s question on whether the federal government should mandate the separation of representative and AML supervisory functions, the SRA s response was yes.

The Ministry of Justice is anticipated to release a consultation on the problem of separating legal regulators from their representative bodies after the EU referendum.

The SRA also utilized the consultation response to renew its calls for robust fining powers and a civil requirement of proof.

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The regulator grumbled, as it has formerly, that section 44D of the Solicitors Act restricted its internal fining powers for solicitors and standard law firms to 2,000, compared with the fine of as much as 250m it could impose on an alternative company structure under the Legal Services Act.

Swifter settlement by the SRA without tribunal involvement would reduce the overall regulatory burden, benefitting all managed companies. This would also reduce delay, uncertainty and cost from those dealing with the corrective process and would support quick, reasonable and firm governing action.

In addition to the need to increase the SRA’s fining powers, we believe that there need to be consistency of fining powers throughout AML sectors to avoid firms looking around for regulators with lower levels of sanctions, including fining powers.

The SRA called for a single requirement of evidence across AML managers the civil requirement, instead of the criminal one presently used by the Solicitors Disciplinary Tribunal (SDT).

The regulator grumbled that the higher requirement of evidence incentivizes law practice to resolve their cases at the SDT where it is more likely to be reversed and typically eliminates the possibility of an early settlement which would reduce costs.

Last month the Treasury and Ministry of Justice accepted the separate suggestions of the Insurance Fraud Taskforce, which likewise included minimizing the concern of proof at the tribunal to the civil requirement. You can also report medicaid fraud cases and takes help regarding medical fraud from our lawyers.

The SRA refuted the Treasury s recommendation that a brand-new body should be developed to supervise AML managers, along the exact same lines as the Legal Services Board.

Businessman hands in handcuffs and holding ten dollar notes

The regulator alerted that this was likely to put a significant regulative burden on managers and the regulated community, the expense which was likely to be passed on to customers.

The SRA added that it did not advocate an alternative of extending the role of the LSB to consist of supervision of AML regulators, as its core function and vital strength is in driving better regulation and promoting competition instead of imposing detailed regulation.

Any extra role might rise expenses and whilst being unlikely to have a significant influence on decreasing the danger of inefficient AML regulators.