Receipt of funds into the Client Account does not remove the requirement to understand source of funds. The responsible lawyer must remain satisfied that they understand:
Client Account controls, source of funds enquiries, sanctions checks and ongoing monitoring should be viewed as complementary controls forming part of Keystone's wider anti-financial crime framework. The responsible lawyer must remain satisfied that they understand the origin of the funds and why they are being used in the matter.
The fact that funds originate from a UK bank account, an investment manager or another regulated institution may assist the assessment but does not automatically answer the source of funds question.
Where transaction funds are received from another UK-regulated law firm, the regulated status of that firm and the nature of the underlying transaction may ordinarily provide sufficient comfort without obtaining evidence of the other firm's source-of-funds work. This does not remove the responsible lawyer's obligation to understand the transaction, the reason for the payment, the parties involved and whether the payment is consistent with the matter. Further enquiries are required where Keystone is on notice of concerns about the funds, the transaction or the other firm's approach.
If you have any doubt about the source, structure, or circumstances of a client account payment, contact the MLRO.