The Solicitors Regulation Authority says there are signs that firms are getting better at AML compliance despite a sharp rise in financial sanctions handed out in the past year.

According to its annual AML report, in the year ended April 2026, firms and solicitors were fined a total of £2.6 million. This included 145 settlement agreements coming to £2m, 14 fines issued through SRA adjudicators adding up to £364,000 and fines totalling £228,000 levied through the Solicitors Disciplinary Tribunal. All fines are paid to the Treasury.

The enforcement action showed a sharp increase on 2024/25, when just 58 regulatory settlement agreements were made, totalling £661,200. In that year, fines at the SDT were more than double those of 2025/26, suggesting that more firms are admitting breaches and opting to make a settlement.

Enforcement activity by the SRA around anti-money laundering regulations has been a source of discontent among some firms who say sanctions are disproportionate and not risk-based. In recent years, the regulator emphasised its zero tolerance attitude to AML and repeatedly warned firms to ensure they were compliant.

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The spike in sanctions in 2025/26 is the culmination of this approach but there are signs that fining activity and SRA sanctions may have reached their high-water mark.

Writing in the report published yesterday, SRA director of AML Alexandra Jones said she was encouraged by the progress shown by the profession and by the commitment shown by many firms to strengthening AML controls.

‘[The report] shows continued improvement across the profession and growing awareness of the risks posed by money laundering, terrorist financing, sanctions evasion and other forms of economic crime,’ said Jones. ‘Preventing these threats remains a regulatory priority. Solicitors and law firms play a vital role in protecting the integrity of the UK legal and financial system, and the overwhelming majority of firms continue to demonstrate a strong commitment to meeting their anti-money laundering obligations.’

The SRA, which completed 966 AML compliance assessments during the year, reported improvements in firm-wide risk assessments, client and matter risk assessments, policies, controls and procedures, sanctions controls and proliferation financing risk assessments. The proportion of firms assessed as non-compliant after the proactive supervision programme fell during the reporting period.

The number of reports of suspected breaches of AML regulations fell from 426 to 336 in 2025/26. Around half of these reports related to alleged failures to perform a risk assessment on a client or matter, or alleged failures to carry out a source of funds check.

The SRA said the recurring nature of these referral themes showed that many firms continue to struggle with the practical implementation of AML controls.