The Legal Sector Affinity Group (LSAG), which comprises legal sector regulators and representative bodies, has published guidance on:

The latest guidance is dated 28 March 2023 and replaces the 2021 version. The guidance has been published in draft form, pending approval by HM Treasury.

It reflects amendments to the Money Laundering Regulations in the following areas:

  • Guidance on the new requirement to carry out proliferation financing risk assessments, either as part of your existing practice-wide risk assessment or as a standalone document.
  • Changes to the duty to report discrepancies to company registries, which take effect from 1 April 2023.

You are not required to follow this guidance but doing so will make it easier to account to regulators and others for your actions.

We will consider whether a barrister or BSB entity has complied with this guidance when undertaking our role as a supervisory authority for the purposes of the Regulations. You may be asked to justify a decision to deviate from this guidance.

In accordance with the Proceeds of Crime Act 2002 and Regulation 86(2)(b) of the Money Laundering Regulations, once approved, the court is required to consider compliance with this guidance in assessing whether a person committed an offence or took all reasonable steps and exercised all due diligence to avoid committing the offence.

This status is explained more fully in the introduction to the guidance.

Addenda

A number of addenda to the LSAG guidance have been prepared and are supplementary to the main guidance. The addenda are provided as an update and to illustrate how our attitude towards regulation is developing over time. Please note the changes set out in the addendums are currently pending approval by HM Treasury and, if accepted, will be integrated into the text of the main guidance.

IMPORTANT: Barristers, BSB entities and chambers staff should read the Anti-Money Laundering Guidance for the Legal Sector in conjunction with R (on the application of World Uyghur Congress) v National Crime Agency [2024] EWCA Civ 715 in which the Court of Appeal held that the “adequate consideration” exemption in section 329(2)(c) has no application to the offences in section 327 or section 328 of the Proceeds of Crime Act. The guidance is in the process of being amended to reflect this judgment and we are working with other Supervisors to do so. In the meantime, the Bar Council has published a practice note and addendum to the guidance to assist barristers, but it is important to note that this has not been approved by HM Treasury.

How to use the guidance

The guidance is in two parts:

Part 1 Guidance for the legal sector

 

Part 2 Sector specific guidance:

Self-employed barristers and BSB entities who engage in work that is within scope of the Money Laundering Regulations should read the sector specific guidance in Part 2 in the first instance. It has been written specifically to reflect the type of work that barristers typically engage in and it contains a number of useful FAQs and case studies to assist interpretation. If you require further detail (for example in the area of conducting due diligence and in relation to Legal Professional Privilege) you should refer to Part 1.

The LSAG has also published guidance on

Please contact us if you need this guidance to be made available in an alternative format.

Guidance for Employed barristers

Barristers who work in organisations such as financial institutions or law firms that are regulated by other supervisors under the Money Laundering Regulations (such as the Financial Conduct Authority or the Solicitors Regulation Authority) should refer to guidance published by the relevant regulator. 

Further assistance in interpreting your obligations

The Bar Council provides a confidential Ethical Enquiries Service for the benefit and assistance of barristers and staff to assist them to identify, interpret and comply with their professional obligations.

Responses to enquiries are given in good faith (as is any advice given in or in relation to such responses), based on the information supplied by you, but neither the Bar Council nor any individual responsible for or involved in responding to any enquiry or giving any assistance accepts any responsibility or liability for any action taken in reliance on it, and it does not consist of – nor can it be relied on as giving – legal advice.

For more information on our respective roles, please see our Protocol for Anti-Money Laundering and Counter-Terrorist Financing with the Bar Council.

Last updated 30 Oct 2024