Lawyers as Gatekeepers of Financial System Integrity: Comparative Regulations and Issues

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WHEN : 08/26/2020 12:00 pm 1:30 pm

Complimentary webinar, courtesy of the Washington, DC Chapter of ACFCS

Part 3 in a 3-part webinar series on beneficial ownership issues

In 2003, the FATF issued revised Recommendations that identified certain lawyers, accountants, and other Designated Non-Financial Businesses and Professions (DNFBPs) as financial system “gatekeepers” and recommended that DNFBPs be subject for AML/CFT purposes to customer due diligence, suspicious activity reporting, and AML program requirements.

Today, lawyers in the UK, the EU, and other jurisdictions are treated as gatekeepers, while lawyers in the United States are not. The regulation of lawyers as gatekeepers has raised a number of issues, including whether gatekeeper regulations on lawyers are necessary, can be implemented effectively without undermining attorney-client privilege, and impose undue burdens on smaller firms. In 2010, the ABA, IBA, and Council of Bars and Law Societies of Europe jointly issued a voluntary guide for lawyers on the detection and prevention of money laundering.

In response to revelations about the role of lawyers in events leading to the Panama Papers and Paradise Papers, the IBA and OECD formed a task force to study the role of lawyers in international commercial structures, and in 2019 issued a report that included a statement of non-binding principles, such as that lawyers should engage in “necessary due diligence” to avoid unwittingly facilitating illegal conduct.

The incongruities in the status of lawyers as gatekeepers present legal, policy, and practical challenges, particularly where lawyers engage in cross-border transactions and multi-jurisdictional practice, including as part of one law firm.

In this final installment of the ACFCS beneficial ownership series, we will examine the FATF Recommendations applicable to lawyers as DNPBPs, the state of gatekeeper regulations—or their absence—in select jurisdictions, issues in transnational practice, and positions for and against the adoption of gatekeeper regulations in the United States.

ACFCS thanks Bruce Zagaris, Partner at Berliner Corcoran & Rowe, and Hdeel Abdelhady, Principal at MassPoint Legal and Strategy Advisory, for their support and coordination of this event.

This session is eligible for 1 CFCS credits.

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