Anti-Money Laundering Solution for Legal Professionals

Anti-Money Laundering Obligations for Law Firms in Ireland:

In Ireland, AML obligations are set out in the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021. The legislation transposes the 4th and 5th EU Money Laundering Directives into Irish law.

Key obligations include:

Risk-Based Approach

• Conduct Risk Assessments: Law firms must assess the risk of money laundering and terrorist financing associated with their business and clients. This includes examining the geographical, client, and service-based risks.

• Policies and Procedures: Firms are required to implement appropriate policies and internal controls to manage these risks.

Customer Due Diligence (CDD)

• Client Verification: Solicitors must verify the identity of their clients and understand the purpose and intended nature of the business relationship.

• Source of Funds/Wealth: Firms must verify the source of the client's funds and the legitimacy of any transactions.

• Enhanced Due Diligence (EDD): This is mandatory for higher-risk clients, including politically exposed persons (PEPs) or those from high-risk jurisdictions.

Ongoing Monitoring

• Transaction Monitoring: Law firms must monitor transactions to ensure that they are consistent with the client’s profile and expected activities.

Record-Keeping

• Document Retention: All CDD information and records must be kept for five years following the termination of the business relationship.

Suspicious Transaction Reports (STRs)

• Report to Financial Intelligence Unit (FIU): If a solicitor suspects a client may be involved in money laundering or terrorist financing, they must submit a Suspicious Transaction Report (STR) to the Financial Intelligence Unit (FIU) of An Garda Síochána (Irish Police).

• Tipping Off: Similar to the UK, it is illegal to inform the client that an STR has been filed.

Training and Awareness

• AML Training: Firms must ensure that all relevant staff are trained in identifying suspicious activity and understanding AML obligations.

AML Compliance Officer

• Money Laundering Reporting Officer (MLRO): A nominated officer must be appointed to manage compliance and reporting under AML laws.

Penalties for Non-Compliance

• Sanctions: Law firms in Ireland that fail to comply with their AML obligations can face regulatory sanctions, fines, or criminal prosecution under the Criminal Justice Act.

AML HQ's all-in-one solution for legal professionals was created in line with guidance from the official competent authorities (The Law Society of Ireland) to solve the challenges that solicitors and legal professionals face in complying with ongoing Anti-Money Laundering regulations.

We do this by providing you with:

• Policies, controls and procedures manual that you can use out of the box or you can further tailor to suit your firm.

• Digital risk assessments that allow you to quickly determine risks and efficiently record assessments to evidence due process.

• Client onboarding processes and tools to help you identify and verify new corporate clients and private individuals. AML HQ helps you to make a good first impression with new clients while also securely managing their sensitive data in accordance with GDPR.

• Training material and electronic training logs to track and monitor your staff training requirements.

• Audit reporting that significantly reduces the administrative burden when an AML audit is undertaken.

Every law firm must have appropriate policies and procedures for assessing and managing Money Laundering risks. The Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021 require that your firm has written policies, controls and procedures, covering a number of factors relating to your law firm. You will need to communicate your PCPs to all relevant staff and record how this has been communicated.

The following topics, all of which form part of the Money Laundering framework, need to be considered when drafting policies and procedures:

• Risk Based Approach, Risk Assessment and Management.

• Customer Due Diligence (CDD)

• Confirm Beneficial Ownership

• Record keeping

• Internal Control

• Ongoing Monitoring

• Reporting Procedures

• Compliance Management

• Communication

• Training and Awareness

Your PCPs should also form a major part of your staff’s AML training. You will need written processes for identifying, managing and mitigating risks identified in your Firm-Wide Risk Assessment. These must be proportionate to the size and nature of your firm. These should be subject to regular review and update, and a written record of this exercise maintained.

A legal practice is subject to an inspection from the Regulation Department of the Law Society every five years, with new firms being inspected around three years after opening.

However, the Society has moved to a more risk-based approach so, for example, if your reporting accountant’s report is late or qualified, or if there are complaints against you, this may trigger an inspection. Follow-up inspections are also quite common.

Law Society inspections are conducted to ensure compliance with the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018, as well as the Solicitors Acts 1954-2015, Legal Services Regulation Act 2015, and the Solicitors Accounts Regulations 2014.

As part of the Society’s monitoring process, solicitors are required to demonstrate that they have policies and procedures in place for the prevention and detection of money-laundering and terrorist-financing offences.

Failure to comply may result in one or more of the following courses of action:

• The requirement to take remedial action.

• The requirement to attend a meeting of the Regulation of Practice Committee to explain failure to comply.

• Referral to the Solicitors Disciplinary Tribunal.