Given the diversity in scale and activities, some legal professions may be more vulnerable to being exploited for money laundering (ML) and terrorist financing (TF) than others. On 26 June 2019, the Financial Action Task Force, issued guidance notes for a risk-based approach for legal professionals, the accounting profession and also trust and company service providers.
The guidance notes for all three sectors detail the need for a risk-based approach which is central to the effective implementation of the FATF recommendations to fight money laundering and terrorist financing.
The guidance for legal professionals stresses the need for a sound assessment of the ML/TF risks that legal professionals face so that the policies, procedures and initial and ongoing client due diligence measures can mitigate these risks.
The guidance highlights the importance of supervision of beneficial ownership requirements and nominee arrangements so that up to date information on legal persons and legal arrangements is maintained and available in a timely manner.
It is directed at legal professionals, countries and their competent authorities, including supervisors of the legal profession, as well as practitioners that have legal professionals as customers.
The guidance notes can be found here.