Recent findings reveal many barristers misstate AML regulation applicability in annual BSB declarations, affecting risk profiles and regulatory measures.
- A 2023-2024 BSB spot check showed only two of nine barristers correctly declared their work under AML regulations, mirroring previous years.
- Barristers mostly engage in tasks outside AML’s scope due to restrictions on holding client money and typically contentious litigation referrals.
- Annual declarations are vital for BSB’s compliance reporting duties to the Treasury and professional oversight departments.
- Inaccuracies in declarations can skew regulatory focus and incur unnecessary costs, prompting BSB to enhance guidance and enforcement.
A recent examination by the Bar Standards Board (BSB) uncovered inaccuracies in how barristers report their adherence to the Money Laundering Regulations 2017 (MLRs). A spot check conducted on self-employed barristers revealed that out of nine individuals, only two accurately stated their work as falling within the scope of these regulations. This pattern has persisted in subsequent checks, suggesting a widespread misunderstanding or misinterpretation among barristers.
The BSB clarified that the vast majority of barristers do not conduct work falling under the MLRs. This is primarily because the nature of their work, often involving contentious litigation, does not typically require compliance with these regulations. Furthermore, barristers are not permitted to hold client money or manage clients’ affairs directly, which further exempts them from these duties. Their involvement is generally limited to referrals made by solicitors and other qualified professionals who perform necessary due diligence.
Data from the BSB indicates that 461 self-employed barristers declared their work as covered by MLRs in 2023-24. While this number shows a decrease from the previous year, it remains higher than figures seen in 2021-22. Accurate annual declarations are crucial, as they inform the BSB about which professionals are engaging in activities that may necessitate regulatory oversight, information which the BSB is obliged to report to the Treasury as part of its supervisory duties.
The guide issued by the BSB aims to improve the accuracy of these declarations, thereby better aligning regulatory efforts and financial resource allocation. The Board has already taken regulatory action in four instances involving alleged MLR breaches this past year, indicating a growing attention to compliance. Mark Neale, the BSB’s director general, highlighted ongoing developments aimed at reducing inaccuracies, including updated online resources and impending new guidance specifically targeted at chambers.
Ensuring accurate declarations will aid in effective oversight and resource management within the legal sector.
