Small law firms ‘should be exempt from crime levy’
Scottish solicitors are already regulated for money-related crime
Small high street law firms should not be hit with a levy aimed at combating money-laundering, says the Law Society of Scotland.
The professional body for Scottish solicitors is strongly opposed to the legal profession paying such a levy as solicitors are subject to stringent anti-money laundering requirements, but has stated that if it is to be introduced, then smaller firms should be exempt.
It has criticised the view of the Solicitors Regulation Authority (SRA), which regulates solicitors in England and Wales, that small law firms in the UK should pay further costs to combat the society-wide problem of money laundering.
In its Economic Crime Levy Consultation, HM Treasury has proposed that smaller law firms, which are often at the coalface of fighting money laundering, should be subject to a new economic crime charge.
In its consultation submission, the SRA has stated that ‘criminals may specifically target small firms’ and should therefore be subject to an anti-money laundering (AML) levy.
In its response, the Law Society of Scotland argues that the legal profession is strongly committed to fighting economic crime arising from money laundering and has been on the front line of defence for a very long time, investing considerably in measures to forestall economic crime.
It has said that as wider society benefits from anti-money laundering activity it should be funded centrally rather than through the legal sector and other professional services sectors, stating that “the impacts of economic crime are felt across society as a whole and therefore any benefits that materialise from tackling economic crime are equally beneficial”.
Scottish solicitors are subject to some of the most stringent anti-money laundering rules in the world– Law Society of Scotland
Law Society of Scotland President, Amanda Millar, said: “I reiterate the point we made to HM Treasury, that we are diametrically opposed to the introduction of a further levy being placed on Scottish solicitors at all and particularly at a time when so much is being asked of the legal professions in order to keep our society operating.
“It is extremely disappointing to see this response from the SRA. There can be no question of the legal profession’s commitment to tackling economic crime resulting from money laundering activities.
“Scottish solicitors are subject to some of the most stringent anti-money laundering rules in the world, monitored by an AML-specific team as part of the Society’s regulatory function. This is funded entirely by the profession, meaning Scottish solicitors already contribute to measures that benefit everyone in society.
“It is also being proposed at a time when solicitors’ firms across the entire UK are struggling in the worst recession on record, while at the same time making sure they continue to meet the needs of clients, with many also having to invest heavily in technology to ensure the continued smooth-running and effective administration of justice. It seems the SRA has failed to grasp the dire economic reality solicitors across the UK are facing.”
In its response submitted in October, the Law Society of Scotland called for further clarification from the UK Government on how proposed costs would be divided between private sector and public funding.
It maintains that any new levy must be transparent and proportionate to the actual risk posed to ensure the legal sector and individual firms are not disadvantaged.
While emphasising its objection to the proposed levy entirely, the Society been clear that any funds raised by an AML levy must not be diverted for other general government spending or other areas of economic crime such as fraud.