Independent Lawyers Money Laundering

It means lawyers operating independently must comply with the Anti-Money Laundering Act and ensure their services are not used to conceal illicit assets.

Customer due diligence must be performed at the start of each new client relationship, for high-risk transactions, and whenever there is suspicion that advice could be misused for money laundering. There is, however, an exemption: the requirements do not apply where the business relationship is for defending or representing a client in legal proceedings, including advice to commence or avoid such proceedings, or to assess the client’s legal position.

Particularly relevant indicators include:

• Complex corporate structures without a commercial explanation
• International transactions routed through high-risk countries
• Clients avoiding disclosure of the purpose of the transaction
• Abnormal payment patterns, for example large cash amounts

These factors may indicate money laundering.

Legal services are often used to create structures and transactions that can legitimise illicit funds. Because lawyers play a central role in many business arrangements, their services can be misused by criminal actors to create a façade of legality.

Among other things, a practice must work with:

• Customer due diligence and identification of beneficial owners
• Risk assessment of clients and transactions
• Ongoing monitoring of business relationships
• Reporting suspicious activity to the Financial Intelligence Unit

These steps are fundamental to meeting the Anti-Money Laundering Act.

A lawyer who does not meet AML requirements risks administrative fines, intervention by supervisory authorities and damage to reputation, which can ultimately lead to lost client relationships and difficulties in continuing the practice.