Regulation 21 AML Audits for Law Firms

Under Regulation 21 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR), law firms must assess whether they are required to carry out an independent audit of their anti-money laundering (AML) policies, controls and procedures. Where appropriate to the size and nature of the firm, this audit must evaluate the effectiveness and adequacy of their AML framework.

Do you need a Regulation 21 Audit?

An independent audit is required where a firm’s risk profile, scale or complexity makes it necessary. If a firm decides an audit is not required, it must clearly document the reasoning and be able to justify that decision, if requested.

What makes an Audit 'independent'?

The audit should be conducted by someone with sufficient AML expertise and audit experience who is independent of the firm's compliance function. This means the auditor should not be the firm's MLRO, MLCO, or part of the internal compliance team.

Although it is possible to carry out the independent audit internally, for many small to mid-sized law firms, appointing a suitably qualified and independent internal auditor is not practical. That’s why firms often appoint an external specialist, who can be objective about the policies, controls and procedures and how they are implemented.

Independent Regulation 21 Audits by Beal Cooper Compliance Ltd

At Beal Cooper Compliance Ltd, we provide fully independent Regulation 21 AML audits tailored for each firm. Our audits are practical, proportionate, and aligned with regulatory expectations. We aim to provide firms with clarity and confidence by preparing a comprehensive written audit report with details of what is working well and guidance on what could be improved.

Our Approach

We offer flexible delivery to suit individual firms, including on-site, hybrid or remote audits.

Our structured audit process includes:

Initial scoping discussion to understand the firm, services and risk profile
Review of the firm's Firm-Wide Risk Assessment
Assessment of AML policies, controls and procedures
File reviews across a representative sample of matters
Targeted interviews with relevant staff and role-holders
Comprehensive written report with clear findings and recommendations

What firms gain

A clear, independent assessment of their AML framework
Practical recommendations to strengthen compliance
Evidence of compliance with Regulation 21 requirements
Confidence in the event of an SRA inspection or audit

What our Audits cost

Our fees are transparent. We offer fixed-fee pricing based on the size and complexity of your firm, including the volume of documents, file reviews and interviews required.

If you want to discuss whether your firm needs a Regulation 21 Audit or find out more about the Audits we offer, please get in touch.