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UK law firm slapped with £20,000 fine for AML regulation breaches

By Elizabeth Hearst

International law firm Taylor Vinters has been fined almost £20,000 for failing to carry out appropriate due diligence on a number of foreign clients. The firm admitted four rule breaches under existing money laundering regulations and settled with the SRA (Solicitors Regulation Authority). 

As reported in the Law Gazette, since 2014 the firm was implicated in 161 dealings with 88 overseas clients who purchased expensive off-plan property plots in London. By 2018, it had amassed roughly £16.8 Million from these sales, yet representatives from the bank had only met with half of the clients. 

In the report, the SRA state that in 17 matters involving nine clients, funds were received by Taylor Vinters without any customer due diligence performed. It is alleged that in 26 other transactions, the firm held some identifying documents used in the due diligence process such as passports, but had not completed all relevant checks required.

A representative from Taylor Vinters detailed that in some cases, client bank accounts had been provided to clients without the firm’s knowledge. The firm was presently unaware who had provided these details, and added that once the matter was brought to their attention, the firm informed clients to not send any further funds until the relevant customer due diligence had been completed. 

The investigation found that the firm had assessed and recorded the money laundering risks of these transactions as “high” and were therefore required to conduct additional customer due diligence and supervision. The firm stated that they had implemented a “quadruple lock” process into their regime, including the requirement of photo ID, confirmation of address, bank statements and an online check. 

However, investigations found that in 43 instances the firm failed to conduct appropriate checks prior to the deposition of funds and had failed in their requirement to monitor these transactions on an ongoing basis. The SRA concluded that client details were given out without the firm’s knowledge, and the firm had put in place some protocols to monitor and mitigate the breaches. 

The regulator added that retrospective customer due diligence had been made following the transaction in all but one client, the firm had not recorded any misconduct since and had assisted the SRA with their investigation and there was no reason to suspect “any dubious transaction” that “bear the hallmarks of money laundering” had taken place. 

The SRA calculated a fine of Stg £19,200 on the basis of 0.2% of the firm’s Stg £16 Million turnover, with Taylor Vinters also liable for Stg £5,800 in costs.

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