I just finished reading a recent report on the
vulnerabilities of the legal profession to ML/TF < http://www.fatf-gafi.org/media/fatf/documents/reports/ML%20and%20TF%20vulnerabilities%20legal%20professionals.pdf
> . If you don’t have time for the
full report ( I must admit I have not read all details myself ) try and read the
executive summary and the cases. Definitively interesting – on a side note: the
FATF site contains lots of interesting reports, it’s worth browsing some of the
reports from time to time.
We all know that legal professionals play a crucial role in
many financial transactions. It’s therefore no surprise that the report
concludes “…that criminals seek out the involvement of legal professionals in
their ML/TF activities, sometimes because a legal professional is required to
complete certain transactions, and sometimes to access specialised legal and
notarial skills and services which could assist the laundering of the proceeds
of crime and the funding of terrorism. “. The report continues to describe the
various methods that criminals deploy and contains over 100 case studies.
On page 5 the report contains a nice overview of ‘ the
involvement of the legal professional ‘ in any type of transaction. Of course
many legal professionals are trustworthy but there’s a large gray area between being
alert and pro-active down to being willfully blind, corrupted or downright
complicit.
The report concludes with recommendations for legal
professionals and self regulating bodies (SRBs) that oversee the legal
profession. Fact is though, that there is a huge difference amongst countries
in terms of how strict these SRBs are and how much their influence and power
is.
As a result – also because apparently many legal
professionals do not do any CDD on their clients - a legal professional is
often the weakest link in the parties involved in financial transactions.
I’m not sure if a call for more regulation and oversight is
justified but the current situation can hardly be called satisfactory.
Suggestions and opinions are welcome! What do you think?
