Introduction

Financial crime prevention is a core professional and legal obligation for all lawyers. It protects the firm, our clients, and the wider public interest. At Keystone, we adopt a zero-tolerance approach to financial crime.

Financial crime is wider than money laundering alone. There are serious criminal penalties for any breach and the rules are reinforced by overlapping professional obligations. Our responsibilities extend to preventing and detecting:

• Money laundering.
• Terrorist financing.
• Proliferation financing (e.g. funding weapons of mass destruction programmes).
• Breaches of financial sanctions.
• Facilitation of tax evasion.
• Fraud, bribery, and corruption.

The legal and regulatory frameworks that apply to us include:

1. Money Laundering Regulations 2017 (as amended) ("MLRs") - requiring risk assessment, client due diligence, monitoring, and reporting.
2. Proceeds of Crime Act 2002 ("POCA") - creating the primary money laundering offences and setting out reporting duties.
3. Terrorism Act 2000 - covering terrorist financing offences and reporting obligations.
4. Bribery Act 2010 - covering bribery and corrupt practices.
5. Sanctions and Anti-Money Laundering Act 2018 (and various supporting regulations) - implementing UK sanctions and prohibitions on working with designated persons, entities, or jurisdictions.
6. Criminal Finances Act 2017 - introducing the corporate criminal offence of failing to prevent the facilitation of tax evasion.
7. Economic Crime and Corporate Transparency Act 2023 ("ECCTA") - introducing the corporate criminal offence of failing to prevent the facilitation of fraud.
8. SRA Principles and Codes of Conduct - requiring solicitors to act with integrity, independence, and in a way that upholds trust and confidence in the profession.

Keystone has appointed the following officers as required under the regulations:

1. Money Laundering Reporting Officer ("MLRO"): The MLRO is the central point of contact for all internal reports of suspicious activity. They assess and, where necessary, escalate reports to the National Crime Agency ("NCA") or relevant authority. The MLRO also provides day-to-day guidance to lawyers on AML, terrorist financing, proliferation financing, and sanctions issues.
2. Money Laundering Compliance Officer ("MLCO"): The MLCO has overall responsibility for the firm's compliance with the Money Laundering Regulations, including the Practice-Wide Risk Assessment, policies, controls, and procedures. The MLCO ensures that the firm has systems in place to prevent financial crime and that these systems are reviewed and updated regularly.

Together, the MLRO and MLCO hold ultimate responsibility for anti-financial crime compliance at Keystone. They are supported by the Clients Team, who carry out conflict searches, administer CDD processes, and maintain centralised records.

Every lawyer in the firm has personal responsibility to comply with their regulatory obligations. While the Clients Team and Central Office provide support, and while certain oversight functions sit with the MLRO and MLCO, the lawyer instructed on a matter remains responsible for:

• Knowing your client - ensuring you understand who they are, who controls them, and why they are instructing us.
• Assessing risk - considering the client, the matter, the source of funds, and any other risk factors at the outset and throughout the matter.
• Applying due diligence - completing the required client due diligence (CDD) and enhanced due diligence (EDD) where relevant.
• Monitoring and recording - keeping risk assessments and narrative notes up to date and recording the rationale for decisions.
• Escalating concerns - raising red flags promptly with the MLRO or MLCO.
• Reporting suspicions - making internal suspicious activity reports where necessary, using the firm's prescribed process.
• Maintaining confidentiality and avoiding tipping off - understanding what can and cannot be said to clients when concerns arise.

Lawyers must never assume that the Clients Team's administrative support or electronic screening replaces their own obligations. The Clients Team can assist with gathering documents and running checks, but it is the lawyer's duty to be satisfied that the client and the transaction are legitimate.

Starting with your Induction on joining the firm, all members of the firm are given regular and appropriate training on the MLRs. You must attend these sessions and undertake any mandatory online training, or if you are unable to, then you must read through the notes, listen to the audio or watch the video, as appropriate.

You must also study our Anti-Money Laundering and Sanctions Policy. That sets out the steps that the firm and you personally must take in the fight against financial crime. You must be alert at all times and should note that you can have reporting obligations even before the firm is formally instructed. There are seven key elements to how we comply with the MLRs:

• Risk assessing the firm
• Reporting
• Client due diligence
• Client/matter risk assessment
• Source of funds and source of wealth assessment
• Ongoing monitoring
• Training