FATF and Anti-Money-Laundering Ethics: What Should a Transactional Lawyer Worry About?

How likely is it that you are unwittingly assisting a client in money laundering or terrorist financing? That may seem far-fetched, but the U.S. legal profession is under intense pressure to embrace anti-money laundering requirements that apply to banks and other financial institutions. 

In 1989, the G-8 nations founded the Financial Action Task Force (FATF) for the purpose of promoting policies to combat money laundering. To this end, FATF developed 40 Recommendations aimed at money laundering and terrorist financing. 

These requirements mandate that a number of "designated Non-Financial Businesses and Professions" (DNFBPs) adopt rigid client due diligence protocols at the client intake stage and during the course of the representation. These "gatekeepers" include lawyers, accountants and trust company service providers. 

The FATF effort to impose reporting obligations on U.S lawyers would run seriously afoul of the duty of client confidentiality and traditional attorney-client privilege. Despite the adoption by the ABA in 2010 of comprehensive voluntary good practices guidance to assist lawyers in assessing client risk, the federal government continues to insist that lawyers do more to combat money laundering and terrorist financing. 

Moses & Singer partner Gideon Rothschild and Venable partner Kevin Shephard review the guidance, the legislative and regulatory efforts to impose anti-money laundering requirements on the legal profession, a new ethics opinion on Gatekeeper issues, and a publication produced by the ABA, the International Bar Association, and the Council of Bars and Law Societies of Europe to assist lawyers in detecting and preventing money laundering.

Learning Objectives:

I.     Understand FATF and the Risk Based Approach

II.    Comprehend how and when to assess client risk

III.   Apply procedures to help detect and prevent money laundering

IV.   Identify conflicts between the Model Rules and FATF recommendations

V.    Grasp  when  to  decline  or  terminate  representation  based  on  Model Rules 1.2 and 1.6

Program Attorney: Sigalle Barness