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UK LAW firm fined for relying on Ukrainian lawyer for AML checks.


A London firm handling a property transaction between two Ukrainian citizens has been fined around £12,000 for failing to conduct sufficient AML checks.

DKLM LLP, based in the Square Mile, relied upon customer due diligence and source of funds checks provided by a lawyer working in Ukraine.

The Solicitors Regulation Authority said:

  • The extended due diligence required for this matter was not carried out, with insufficient scrutiny of the background information provided.

A complaint had been made about the firm relating to a transaction for a UK property. The complainant alleged

  • That the firm miscalculated his stamp duty land tax liability and he was not refunded the money he was owed.

Concerns were also raised that:

  • The house appeared to be undervalued compared with properties in the same street, and legal costs appeared to be high.

The SRA’s investigation found:

  • Inadequate checks to the extent that the firm could not accurately know if the funds for the transaction had been paid.
  • The firm failed to pay sufficient regard to two SRA warning notices about money laundering, although there was no suggestion that the transaction involved any financial crime.
  • The firm failed to adequately identify at the outset of the retainer that the third-party lawyer relied upon had previously been struck off by the Solicitors Disciplinary Tribunal.

The SRA said:

  • ‘The conduct showed a disregard for statutory and regulatory obligations and had the potential to cause harm, by facilitating dubious transactions that could have led to money laundering (and/or terrorist financing).

The firm agreed to pay a £12,072 fine and £1,350 costs.



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