The Conference of Chief Justices (CCJ) adopted a resolution at its annual meeting in July supporting the ABA’s Voluntary Good Practices Guidance for Lawyers to Detect and Combat Money Laundering and Terrorist Financing (Voluntary Guidance), which was developed by the ABA Task Force on Gatekeeper Regulation and the Profession and several other ABA and other legal entities before being approved by the ABA House of Delegates in 2010.
ABA task force Chair Kevin L. Shepherd presented the proposed resolution to the CCJ Professionalism and Competence of the Bar Committee, which brought it to the full CCJ for a vote. In a July 29 letter to CCJ President Michael G. Heavican of the Nebraska Supreme Court, Shepherd underscored the importance the CCJ’s adoption of the resolution will have in “persuading state and local bar associations to post the Guidance on their websites as well as signaling to Congress and the administration that the state judiciary recognizes the vital role that lawyer education will have in preventing a lawyer’s services from being used to facilitate money laundering and terrorist financing.”
The CCJ resolution, which was prepared jointly by the ABA task force and the ABA Governmental Affairs Office, highlighted ABA Formal Opinion 463, an opinion issued in May 2013 by the ABA Standing Committee on Ethics and Professional Responsibility. In its formal opinion, the ABA committee concluded that the Voluntary Guidance is consistent with the ethical principles outlined in the ABA Model Rules of Professional Conduct. The formal opinion also encouraged lawyers to adopt effective client intake and monitoring procedures, such as the risk-based control measures outlined in the Voluntary Guidance, which are designed to minimize the risk that lawyers would unwittingly engage in providing legal services that facilitate money laundering or terrorist financing. The risk-based approach, according to the resolution, is an effective means of assisting lawyers to combat money laundering and terrorist financing while still complying with their existing state court and state bar ethical duties and legal obligations.
The ABA developed the Voluntary Guidance after the intergovernmental body known as the Financial Action Task Force on Money Laundering (FATF) issued comprehensive international 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 Voluntary 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.
The ABA has been urging all state and local bar presidents to encourage their members to comply with the ABA ethics opinion and the Voluntary Guidance as the most effective means of combating money laundering while avoiding the passage of federal legislation or adoption of rules that would impose unnecessary and burdensome new regulations on lawyers and the legal profession.