Lawyers as the New Guardians of Governance, op-ed piece, July/Aug. 2004, Amicus Curiae, Journal of the Society for Advanced Legal Studies (London).

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A curious thing has happened of late: lawyers have been

appointed by the international community as the new

guardians of governance for their clients. More specifically,

lawyers are increasingly regarded as part of the global

efforts to combat money laundering and terrorist

financing. How did this come about?

The Financial Action Task Force (FATF), the

international body that sets standards for anti-money

laundering and combating the financing of terrorism

(AMl/CFT), has, in its June 2003 revision of the FATF

Forty Recommendations on Money Laundering (FATF

Recommendations), included laweyers in its coverage when

they are engaged in certain activities for their clients. The

European Union has done the same in its December 2001

anti-money laundering Directive, which has recently been

implemented into domestic law in a number of EU

countries. The activities covered by the FATF

Recommendations and EU Directive include instances in

which lawyers act for their clients in the sale and purchase

of real estate and/or businesses or when lawyers handle

client money.

These measures require lawyers, notaries, and other

independent legal professionals to conduct customer due

diligence, maintain records and, more controversially,

report any suspicious transaction involving proceeds of

crime or funds related to terrorist financing to a self-regulatory

body such as a bar association or to a financial

intelligence unit (FIU). FIUs are government agencies,

such as the National Criminal Intelligence Service (NCIS)

in the UK and SEPBLAC in Spain, that receive suspicious

transaction reports, analyze those reports, and disseminate

their findings to law enforcement authorities for

investigation and prosecution.

The requirement for lawyers to report suspicious 0transactions involving their clients raises various issues, not

least issues pertaining to legal professional privilege.

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Published In: Administrative Agency Updates, Criminal Law Updates, Finance & Banking Updates, International Trade Updates, Professional Practice Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ross Delston, Law Office of Ross Delston | Attorney Advertising

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