Regulatory Compliance and Risk Management
Regulatory Compliance and Risk Management
This domain tests the compliance obligations that attach to legal practices and their clients, especially anti-money laundering, data protection and corporate filings.
AML
- The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended, applies a risk-based approach. Designated persons must identify and verify clients, identify beneficial owners, screen politically exposed persons, monitor transactions and keep records (generally five years).
- Suspicious activity must be reported to the Garda Síochána Financial Intelligence Unit; tipping off is a criminal offence.
- Enhanced due diligence is required for high-risk clients, PEPs and complex structures. Simplified measures are not permitted where risk is high.
Data protection
- GDPR and the Data Protection Act 2018 apply: lawful basis, transparency, data minimisation, accuracy, storage limitation, integrity and accountability.
- Data subjects have rights of access, rectification, erasure, restriction and objection. Breaches likely to risk rights must be notified to the Data Protection Commission within 72 hours.
Risk management
- Use engagement letters, conflict checks, file reviews, segregation of duties, professional indemnity insurance, business continuity and vendor due diligence.
- Company compliance includes CRO annual returns, financial statements, beneficial ownership register and tax filings. Sanctions screening is separate from AML.
Worked example
A practice acts for a company buying property. It must verify the company, identify its beneficial owners (over 25%), screen them, and record the risk assessment. Accepting a certificate of incorporation alone is insufficient.
Traps
AML is not just a bank issue. A low fee does not mean low risk. Do not assume a cloud provider GDPR compliance covers the practice own obligations.