The Law Society of Scotland has stated that the proposed new levy on the lawyers to fund anti-money laundering (AML) initiatives of the UK government is unnecessary in its response to the UK Government consultation on proposals for a new AML levy.
Amanda Millar, Law Society of Scotland President, said:
“We are opposed to the introduction of a further levy being placed on Scottish solicitors.
“We are committed to tackling economic crime resulting from money laundering activities and have increasingly focused on measures to reduce money laundering risks within Scotland’s legal profession. This includes creating an AML-specific team within the Society and the introduction of new measures such as an annual AML Certificate to assess AML risk in the legal sector. All of this activity is already funded entirely by the profession meaning Scottish solicitors already contribute more than most for measures that benefit everyone in society.”
“As well as there being no need for an additional levy given the high level of existing AML regulation, the timing of these proposals could not be worse. There is already considerable economic uncertainty caused by the Covid-19 pandemic, with many firms facing potential long-term hardship. Scottish solicitors pay substantial sums towards regulatory costs, including the annual levy imposed by the Scottish Legal Complaints Commission (SLCC), which has seen an increase of 25% in the last three years alone, in addition to our own regulatory costs which include an annual fee related to AML regulation.
“The size of the Scottish legal market – around 10% of that in England and Wales – means there is greater sensitivity around cost. Relatively small changes in fees can have big consequences, potentially affecting the financial viability of smaller high-street businesses, which find it more difficult to absorb new costs. The cost of any additional levy imposed on Scottish solicitors will be ultimately be paid for through client fees, which could be detrimental overall to those seeking legal advice.”
However, the Law Society said in the response that should the proposals go ahead, any levy introduced should include an exemption for small businesses. Also, that when calculating any levy, the amount should only apply to AML-related work – not the firm’s overall income.
You can read the full response here.