Lawyers rebuff disclosure proposals in bid to maintain professional privilege

FINANCIAL ACTION TASK FORCE: proposals would compromise profession's independence

International legal organisations have slammed proposals to introduce disclosure requirements for lawyers made in the Financial Action Task Force's (FATF) money laundering consultation paper.

The FATF - a Paris-based international body that recommends ways to prevent money laundering - published the consultation paper in May this year.

Its recommendations included proposals that lawyers should report suspicious clients to local police authorities.

The American Bar Association (ABA) task force on gatekeeper regulation replied to the consultation last week.

It supports proposals for further training of lawyers and requirements for closer record keeping of suspicious client fund transactions, also included in the FATF proposals.

But the task force opposed the reporting recommendations.

Its response said: 'Requiring lawyers to report secretly to authorities about their clients would be squarely contrary to the ethical rules that govern lawyers throughout the United States, would have the unintended effect of impairing client compliance with the law, and could potentially undermine the fundamental principles underlying the legal system in the United States.'

Meanwhile, the Council of the Bars and Law Societies of the European Union (CCBE) also criticised the FATF recommendations.

Its response to the consultation said it was important that it is understood that client professional privilege is not a right reserved for the benefit of professionals, but a fundamental right of citizens.

The FATF's reporting proposals would compromise the independence of lawyers, and 'it is inconceivable that, in a relationship based on trust, a breach of trust would not alter the role of a lawyer, who would be turned either into a policeman or a spy,' the CCBE's reply added.

The CCBE cast doubt on the FATF's assumption of the role of solicitors in money laundering.

It said: 'Even if it is clear that lawyers are involved with the risk of money laundering, it appears that any information available, which would allow the assessment of their involvement is anecdotal and not based upon serious statistics.'

Jeremy Fleming