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May 01, 2011

ABA Promotes Guidance to Combat Money Laundering

The ABA reassured key Senate leaders April 27 regarding the association’s commitment to educating and encouraging practicing lawyers throughout the country to follow the Voluntary Good Practices Guidance for Lawyers to Detect and Combat Money Laundering and Terrorist Financing, which was adopted by the ABA House of Delegates in August 2010.

“The ABA remains committed to making the Guidance an effective resource for lawyers who provide legal services to clients across the United States,” ABA Governmental Affairs Director Thomas M. Susman wrote to Sens. Carl Levin (D-Mich.) and Tom Coburn (R-Okla.), who serve as chair and ranking minority member of the Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations.

In his letter, Susman provided a detailed summary of the steps the ABA has taken to implement the Guidance. Recent steps have included a letter from ABA President Stephen N. Zack to all state and local bar association presidents and other key bar leaders across the country urging them to educate their members about the Guidance. The ABA also has reached out to the Conference of Chief Justices for help disseminating the Guidance to state supreme courts and their state bar agencies, planned the publication of a monograph or book and DVD, and developed numerous continuing legal education programs. In addition, the association is working with the Association of American Law Schools and others in an effort to incorporate anti-money laundering content into law school curriculum, among other things.

In his letter to the bars, Zack explained that the ABA developed the Guidance after the intergovernmental body known as the Financial Action Task Force on Money Laundering (FATF) issued comprehensive anti-money laundering and counter-terrorist financing standards followed by a broad risk-based guidance for the legal profession in 2008. The FATF guidance identified the money laundering and terrorist financing issues specific to the legal profession and outlined the risk factors that lawyers need to consider in developing a risk-based system. Instead of offering detailed directions, however, the FATF guidance urged the legal profession to develop its own effective guidelines.

The ABA and its Task Force on Gatekeeper Regulation and the Profession responded by working with several other specialty bars to craft the voluntary Guidance. The resulting Guidance enables U.S. lawyers to assess the money laundering and terrorist financing risk posed by each client and allows the lawyers to combat money laundering by taking prudent, appropriate steps based on the individual situation rather than adhering to a burdensome and difficult “one-size-fits-all” approach.

“This voluntary, legal profession-initiated effort will help lawyers comply with their existing state bar ethical duties and other legal obligations, while effectively combating money laundering and terrorist financing,” Zack told the bar leaders. He also emphasized that the Guidance will help eliminate the need for federal legislation or agency regulations in this area, pointing out that in recent years Levin and Rep. Carolyn Maloney (D-N.Y.) introduced bills that would have imposed onerous anti-money laundering obligations on lawyers and opened the door to regulation that would have required lawyers to report certain confidential information to the government in violation of state bar ethical rules.

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