Blog : BOARD TALK
|Posted on December 14, 2016 at 11:45 AM|
Never too late, and much needed in the global fight against corruption: lawyers too, make ethical decisions every day.
The International Bar Association (IBA) and the Organisation for Economic Co-operation and Development (OECD) have just announced they are to form a task force to develop professional conduct standards and practice guidance for lawyers involved in establishing and advising on international commercial structures and recommended actions for governments.
"The release earlier this year of the so-called Panama Papers highlighted that, in completing legal transactions for their clients, lawyers may knowingly or unwittingly assist clients in asset concealment or money laundering. International standards, such as the Recommendations of the Financial Action Task Force (FATF), provide a framework for conducting due diligence on customers and identifying the beneficial owner. However, countries' implementation of these standards has been variable" they say today.
Since the scandal, many governments have called for greater transparency of such transactions, sometimes requiring reporting by lawyers. "At the same time, lawyers are mindful of their professional obligations of confidence to their clients." they add.
This Task Force will "work to develop appropriate guidance with respect to forming international commercial structures, while ensuring that confidence in both the lawyers' role and the core principles of the legal profession are preserved."
"It is undeniable that lawyers must play a central role in complex offshore financial transactions. To ensure that they do not unwittingly facilitate economic crime, it is imperative that lawyers ask the right questions of their clients, vet them sufficiently, understand who are to be the ultimate beneficiaries of their client's actions, and have an understanding of sovereign laws" said David Rivkin, IBA President.
"In practice, inevitably complications arise. For example, what are a law firm's obligations when conflicting sovereign laws apply in cross-border transactions? Recent events have shown that existing international and professional standards may not provide sufficiently clear guidance to lawyers who handle such transactions" he added.
The composition of the Task Force will include lawyers and policy leaders from the IBA and the OECD, from common law and civil law jurisdictions, experienced in professional ethics, taxes, anti-money laundering, anti-corruption, financial services, trade and government affairs.
It has set out some interesting questions that it intends to consider. Here are some of them:
What is the legal profession's role in combatting corruption, tax evasion money-laundering and terrorism financing taking into account relevant international standards professional duties of lawyers and the role that such duties play in preserving the rule of law?
What steps, if any, should lawyers take in the event that acts or transactions previously legal become illegal as a result of a change of law?
What should be the result when - notwithstanding the best efforts from the law firm - the client engages in activities that are legal in one jurisdiction but illegal in another?
What use, if any, may be made of illegally garnered information and what liability do lawyers have for inadvertent breach of client confidentiality?
It's high time that 'professional standards' was not a label to hide behind, when it comes to ethics.