Navigating the Initial Inspection: Key Highlights from First-Time Practices

Navigating the Initial Inspection: Key Highlights from First-Time Practices 

• 35% were graded Good or Outstanding, reflecting strong adherence to compliance standards and best practices. 

• 61% were graded Requires Improvement, highlighting areas where policies and procedures need strengthening. 

• 4% were graded Inadequate, underscoring the importance of addressing fundamental gaps. 

Unveiling the Impact: Key Findings from Practices on their Second Inspection 

• 57% achieved a Good or Outstanding grade, showing significant improvement among many practices. 

• 43% were graded Requires Improvement, indicating that while progress has been made, consistent application of compliance measures remains a challenge. 

• 0% were graded Inadequate, demonstrating a clear step forward from initial inspections. 

These results illustrate the positive impact of follow-up inspections while highlighting the need for ongoing education and support for practices. 

Inspection Issues Exposed: How to Address and Prevent Them 

Inspection reports highlighted recurring issues, many of which are easily rectifiable: 

1. Missing Documentation of Evidence Provenance 

Inadequate explanation on Customer Due Diligence (CDD) to document the source of evidence was a common oversight. This is an easily addressed issue that ensures compliance and demonstrates robust client verification. 

1. Overreliance on Generic Templates 

Many practices relied on generic, unedited templates for policies and procedures. These documents often failed to reflect the actual processes in place, creating a compliance risk. In response, the IAB has updated its Policy & Procedure guidance to provide clearer, more practical support. 

1. Outdated Policies and Procedures 

Some practices had not updated their policies to reflect recent changes to Money Laundering Regulations (MLRs), such as Companies House discrepancy reporting and Proliferation Financing requirements.  

1. Internal Suspicious Activity Reporting (SAR) Processes 

Where internal SAR processes existed, they were often omitted from written policies and procedures. This lack of documentation can lead to inconsistent application. Practices must ensure that these processes are clearly outlined to maintain compliance and readiness for inspections. 

Mastering Compliance: Building a Foundation for Success 

• Regularly reviewing and updating compliance measures is essential to maintaining high standards. 

• The IAB provides guidance, tools, and resources to help members address key compliance challenges. 

• Tailored, practical approaches can improve inspection outcomes, ensuring compliance and boosting efficiency. 

• Inspections are more than just a regulatory requirement—they help build trust and excellence within the profession. 

• With the right tools, such as AML Complete, practices can turn compliance challenges into opportunities for growth.