Lawyers have criticised a government report as ‘misleading’ after it said the legal sector was at high risk of money laundering.
The national risk assessment published today by the Treasury and Home Office says that a number of services provided by the legal sector, such as conveyancing and client account facilities, are attractive to criminals seeking to conceal criminal funds.
Some legal professionals are acting as enablers to money laundering by providing access to these services, the report says.
‘Although there are few complicit professional enablers known within the legal sector relative to the size of the sector as a whole, the potential impact they can have on money laundering remains high given their ability to conceal and disguise large sums of criminal money.
‘They also pose a threat to the reputation and integrity of the vast majority in the legal sector who are not complicit in money laundering,’ the report said.
But in a profession-wide response, the Law Society, Legal Sector Affinity Group and UK Anti-Money Laundering (AML) Supervisors Forum warned that the report is by its own admission not backed up by robust intelligence.
Jonathan Smithers (pictured), president of the Law Society, said shortcomings in gathering intelligence and preparing the report had led to the misleading assessment.
He said: ‘While the identification, arrest and prosecution of legal professionals complicit in money laundering is crucial, it is difficult to avoid the conclusion that lawyers’ role is overstated both in this report and in the government’s organised crime strategy.’
Smithers added that the claim about the high-impact professional enablers in the legal sector can have on money laundering is not supported by arrest or prosecution statistics.
The profession has called for better engagement between the government and legal sector so that future risk assessments by the government give a more balanced view of the professions, supervisors and law enforcement.
Scott Devine, chair of the Legal Sector Affinity Group and AML Supervisors' Forum, said that the National Crime Agency (NCA) has agreed to create a legal sector engagement group to discuss practical issues related to matters in the sector as well as better sharing of money laundering intelligence.
The Solicitors Regulation Authority, however, welcomed the report. In a statement the regulator said: 'We have long identified the facilitation of money laundering as a risk, and it continues to be a priority for us. We know that there are a very small number of lawyers who knowingly launder money. We take robust action against those individuals. '
It concluded: 'We are continuing to work with the NCA to report suspicious activity and remind the profession of their obligations.'