The Solicitors Regulation Authority (SRA) has published its AML Annual Report for 2024–25, highlighting progress, challenges, and priorities in tackling money laundering within the legal sector.
This year’s report underscores the SRA’s commitment to proactive regulation and risk-based supervision. The full report can be found here.
Headline Findings
- Proactive Regulation and Increased Oversight
The SRA reports a significant increase in proactive supervision, including inspections and desk-based reviews, aimed at identifying weaknesses in firms’ AML controls. - Persistent Non-Compliance
While most firms demonstrate strong compliance, the report notes that non-compliance was identified in nearly a third of cases, signalling ongoing risks in the sector. - Data-Driven Supervision
The SRA is making greater use of data analytics to monitor AML risks across thousands of files and firms, enabling more targeted interventions. - Sanctions and Risk Assessment
Insights from the 2024 data collection exercise show how firms are managing sanctions risks, with the SRA focusing checks on higher-risk firms. - Alignment with National Priorities
The SRA has aligned its approach with the nine national economic crime priorities developed with the NCA, FCA, HM Treasury, and Home Office. These include tackling professional enablers, sanctions evasion, politically exposed persons (PEPs), and misuse of corporate structures.
Key Quote from the Report
“The identification of non-compliance in nearly a third of cases highlights the continued vulnerability of the legal sector in relation to money laundering and terrorist financing.”
— SRA AML Annual Report 2024–25
“We are making increasing use of data to monitor how law firms manage the risk of money laundering. By analysing trends across thousands of files and firms, we can deliver supervision that is evidence-led.”
— SRA AML Annual Report 2024–25
Why This Matters
The report reinforces the SRA’s role as a supervisory authority under the UK’s AML regime and its commitment to reducing the risk of criminal exploitation of legal services. Firms must ensure their AML frameworks are robust, risk-based, and regularly reviewed.
What Should Firms Do Now?
- Review AML policies and procedures to ensure compliance with current regulations and SRA expectations.
- Strengthen risk assessments at both firm-wide and client/matter levels.
- Enhance sanctions screening processes and ensure they are proportionate to risk.
- Invest in training for Money Laundering Compliance Officers (MLCOs) and staff, focusing on both compliance and the rationale behind controls.
- Monitor SRA updates and thematic reviews for emerging risks and best practices.