Conveyancers face a growing duty to run AML for conveyancers checks before they accept a new client, as property deals remain a frequent target for illicit money.
Three risk reviews shape compliance
The first step is a firm‑wide risk review that looks at the overall exposure of the practice, including the types of services offered, the channels used to deliver them and any geographic links that could raise concern.
Next, a client‑specific review examines the individual’s identity, source of funds and any traits that might signal higher risk. This includes checking whether the person appears on sanctions lists or is linked to a politically exposed person.
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Finally, a matter‑level review evaluates the particular transaction, considering the property type, how it is being funded and any unusual structures. The findings from each review guide the depth of due‑diligence steps and the level of ongoing monitoring required.
The SRA expects firms to produce these reviews on demand, proving they have identified and managed money‑laundering risks effectively.
Choosing the right level of due‑diligence
AML checks fall into three categories: simplified, standard and enhanced. Simplified checks are used for low‑risk work and require a basic risk review, proof of identity and address, plus electronic screening of sanctions, specially designated nationals and politically exposed persons.
Standard checks apply when simplified due‑diligence is not appropriate but the risk is still moderate. They involve the same identity verification steps and screening, but with a broader set of documents and a deeper look at the transaction.
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Enhanced checks are reserved for high‑risk scenarios, such as dealings with a person from a high‑risk third country, a politically exposed individual, or any situation where sanctions may apply. The law mandates a detailed look at the background and purpose of the transaction, plus heightened ongoing monitoring.
Sanctions checks protect firms from dealing with entities subject to restrictive measures imposed for foreign policy or security reasons.
Identity verification must rely on reliable, independent sources. Acceptable documents include passports, driver’s licences, company registration extracts and, for proof of address, utility bills or mortgage statements. The Law Society recommends electronic third‑party verification to streamline remote onboarding and maintain a clear audit trail.
Staff who conduct AML searches need proper training, as required by Regulation 24 of the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. Training records must be kept, and regular refresher courses help teams stay aware of emerging fraud patterns and sanctions updates.
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If a search returns a compliant result, no further action is typically needed. A non‑compliant outcome flags potential issues such as a match on a sanctions list or insufficient data to confirm identity. In that case, the firm should investigate further, possibly requesting additional documents from the client or consulting the search provider for clarification.
Ongoing monitoring does not stop once a client is onboarded. Firms must stay alert to changes in risk profile, sanctions status or transaction activity, and be ready to act if new concerns arise.
Overall, the combination of firm‑wide, client‑level and matter‑specific reviews, matched with the appropriate level of due‑diligence, forms the backbone of AML compliance for conveyancers, helping protect both the public and the profession from financial crime.