Legal & TCSPs
Legal practices and trust or company service providers are exposed to layering typologies through client accounts, corporate formation and conveyancing — sectors repeatedly identified as high risk in the UK National Risk Assessment.
Where the regime bites
Solicitors, chartered legal executives, barristers in independent practice conducting relevant business, and standalone TCSPs registered with HMRC are all 'relevant persons' under Regulation 8. Legal Sector Affinity Group (LSAG) Guidance is the sector-specific interpretation approved by HM Treasury.
The SRA's proactive AML inspection programme, and HMRC's TCSP supervision, place a premium on documented firm-wide risk assessments, matter-level risk assessments and source-of-funds evidence for property transactions.
What supervisors expect
Every retainer in scope of Regulation 12 must have a documented risk assessment before CDD is completed and before funds are received into client account.
Identify and verify beneficial owners of corporate and trust clients, cross-reference PSC and Trust Registration Service data, and evidence discrepancy reporting where required.
Corroborated SoF and, in high-risk conveyancing and private client work, SoW evidence retained on the matter file to Regulation 40 timescales.
SAR governance that respects legal professional privilege, with a documented decision-log where privilege is asserted or the crime-fraud exception applied.
Recurring risk indicators
- Client account misuse and 'banking facility' misuse
- Complex corporate structures with opaque beneficial ownership
- Overseas property purchases and cash-rich buyers
- Litigation settlements used to legitimise illicit funds
- Nominee director and shareholder arrangements
Advisory support for the sector
- Independent AML file review
- LSAG-aligned policy suite drafting
- MLRO and MLCO advisory cover
- SRA inspection readiness