It is alarming how many firms remain non-compliant in this area, even after all this time. The procedure is not difficult but simly must be followed or partners could find themselves in very very deep water.

What are we actually doing here? Law enforcement policy makers around the world have realised that there are many types of crime that we may never have the resources to prevent. Drug smuggling and supply, for example, involve so many people, and iare so incredibly lucrative and so tempting, that even when you catch and lock up current operators there will always be thousands more willing to jump straight into their shoes and continue this trade, one that causes real human misery.

Fortunes will continue to be made but we can adopt a second form of attack and try to stop criminals from spending their vast profits. If they cannot do anything with the money, and run a serious risk of having it seized and confiscated, the attraction of the crime should diminish. So goes the theory, anyway.

Government has therefore required all those businesses that handle money to carry out further checks. They want to both deter the criminals and also to make sure that they are identified so that, if necessary, action against them can be taken. And this is where solicitors come in. As handlers of large amounts of client cash, such as when doing conveyancing work, they are required to make sure that they know exactly who their client is and that they know the source of the funds. It is accepted that, living in the real world, such checks can never be foolproof but all reasonable care is required.

What does this mean?

First of all you need a responsible person to run this - your Money Laundering Reporting Officer. Given the pretty heavy responsibility involved (and possible penalties for getting it wrong!) this is likely to be a partner. A deputy is also necessary to cover absences. They need to get fully informed on the requirements and then need to run the system, ensuring that your policy is being followed, dealing with any queries that may arise, and when necessary making decisions on reporting.

Client ID must be established and the usual method is by obtaining copies of a photo ID document such as a passport or a driving licence (both parts). These must be copies of original documents and unless you can take them yourselves in the office you need to find a way to be certain of their origin. An online service provides a valuable double check, or perhaps an only check if your client cannot attend your offices - after researching this I believe that Equifax offers the best quality/cost proposal but do shop around also with Experian and Call Credit. Some firms make this their only check but personally I feel that this may be slightly risky. There are further ways that you can check on ID when you only have an online report, such as writing to the address in the report and obtaining the client's reply.

Your file management checklist must require these steps and must record who carried them out, how and when and what the results were. You also need to keep a central register and set a policy on how often an existing client needs to provide new identity evidence when they instruct you again.

You are required to train all staff in the principles and procedure of these checks, making sure that they understand when they can accept evidence and when they need to refer the findings to your MLRO or their deputy. You must also run a reguar audit to make sure that the checks are being carried out. correctly.

All this will take time whih leads me to the question of should you charge?

I saw a letter from a stockbroker the other day, advising clients that they were increasing their compliance charge to £15 per bargain for nominee clients, £20 for clients holding their own certificates.

Now, I know that FSA rules are complex and I am not at all sure how the hoops they have to jump though compare with ours, but it gets you thinking doesn’t it?

Have you analysed the time your staff spend on ML compliance? And then considered what charge you make, if any? Might be worthwhile……..