AML round up: July 2025

21st July 2025 | Regulation

Our latest anti-money laundering (AML) round up covers all the latest updates and news for the legal sector since our last round up in February. In this edition, we’re pleased to introduce a new AML team member, as well as highlighting important updates from the Legal Sector Affinity Group (LSAG), including revised guidance to support ongoing compliance, and the latest news from HM Treasury and the National Crime Agency (NCA).

Team news

Meet our new AML Risk Manager, Lily Mo.

Lily joined the Law Society of Scotland after returning to Edinburgh recently with her family. Holding several years' experience within anti-money laundering, Lily has previously worked within compliance at one of the largest offshore law firms, with her specialisms including Trust or Corporate Service Provider work and high risk factors, including Politically Exposed Persons and High Risk Jurisdictions.

Supervision

Thematic review on Suspicious Activity Reports (SARs)

The second stage of our SARs thematic review has now been completed and our final report will be published soon. Catch up on the initial findings from the first stage of the review, which were published in August 2024, while a specific focus on Defence Against Money Laundering reports (DAMLs) was published in September.

AML 2024 Certificate

The 2024 AML Certificate portal closed in April and we would like to thank all practices and their MLROs for taking the time to complete it. The team is currently analysing the data and the results will be published later this year.

AML supervisory attestation

Our work to reach all practices in scope of the Money Laundering Regulations continues, focusing on compliance with the Legal Sector Affinity Group (LSAG) Guidance Key Compliance Principals. The next tranche of the AML supervisory attestations is currently in the planning stage and will commence soon.  

Beneficial owner, manager or officers (BOOMs)

As per the requirement of r.26, we remind practices that it is the responsibility of the MLRO or designated person to ensure that the register of BOOMs is accurate and kept up to date. Further guidance can be found here.

Remember, it is a criminal offence to act as a beneficial owner, officer or manager, or as a sole practitioner of an in-scope practice unit without the approval of your supervisor, the Law Society of Scotland.

Support and guidance

Legal Sector Affinity Group updates

In April, the Legal Sector Affinity Group updated its guidance to include:

  • expanded obligations around ownership and control structures
  • updated guidance on third-part fund contributions
  • new guidance on overseas entities and property transactions.

A full list of the changes can be found on the schedule of amendments from page 221.

Read the latest guidance

National Risk Assessment

In July, HM Treasury and the Home Office published an updated National Risk Assessment, which was last reviewed in 2020.

The threat of money laundering remains high risk within the legal sector, with the services most at risk continuing to be conveyancing, the provision of trust or company services and misuse of client accounts.

Find out more

High-risk third countries

Following the June Financial Action Task Force (FATF) plenary meeting, there has been an update to the UK high risk third country list. 

Practices should, where applicable, update their practice wide risk assessment and policies, controls and procedures to reflect these changes.

Check the FATF grey list

Politically exposed persons (PEPs)

The Financial Conduct Authority has recently published revised guidance on PEPs that includes:

  • How to apply a proportionate and risk-based approach to PEPs, their relatives and close associates.
  • Clarification that firms should not treat non-executive board members of civil service departments in the UK as PEPs.
  • Senior management sign-off flexibility: PEP relationships can be delegated to suitably senior personnel beyond the MLRO, provided the MLRO has oversight.

AML Spotlight: Regulation 39 - Reliance

Catch up on the latest blog in our AML spotlight series, this time focusing on Regulation 39 - Reliance.

And stay tuned for our next blogs examining the Reporting of Discrepancies on Registers and the use of artificial intelligence to aid client due diligence.

AML and Financial Crime Conference 2025

This year’s AML and Financial Crime Conference will be held online on 26 and 27 August. We have a fantastic range of speakers covering an interesting range of topics, including AML and the Scottish legal profession, source of funds compliance, drafting client and matter risk assessments, PoCA and spotting red flags.

Economic crime news and updates

Following the consultation focused on the effectiveness of the Money Laundering Regulations last year, HM Treasury has recently published its response.

Our members should familiarise themselves with the response. We will ensure members are kept up-to-date with any proposed changes to the money laundering regulations.

The UK government has announced the simplification of the money laundering regulations by the end of the year.

A reminder that those who undertake activities such as filing on the public register and verifying identities will need to register to become an Authorised Corporate Service Provider (ACSP).

Companies House has introduced this measure as part of the Economic Crime and Corporate Transparency Act to ensure accuracy and transparency in the public register. It aims to prevent fraudulent activities by verifying the identity of all individuals submitting information, including those acting on behalf of companies.

The Home Office has announced that the threshold amounts in s339A will be raised from £1,000 to £3,000. This is part of the Government’s efforts to support the public and private sector by reducing the volume of low-value DAMLs, enabling resources to focus on higher value activity.

The National Crime Agency recently published the latest issue of its SARs in Action magazine.

In this issue, the UK Financial Intelligence Unit (UKFIU) highlights its free virtual SARs best practice workshops for the non-financial services regulated sector, offered by the UKFIU Reporter Engagement Team.

Additionally, the SARs Reporter Booklet released in May 2025 provides some insightful case studies on SARs and DAML SARs.

You can find these and previous editions of the magazine and reporter booklets on the NCA website.

In June 2025, the OFSI published guidance on financial sanctions. Access the videos here.

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