Professor Alberto Bernabe notes: “ABA Committees solicit comments on discussion draft document on possible amendments to the Model Rules” —

• “The ABA Standing Committees on Ethics and Professional Responsibility and Professional Regulation have developed a Discussion Draft of possible amendments to the Comments of Model Rules of Professional Conduct 1.0 (Terminology), 1.1 (Competence), and 1.2 (Scope of Representation and Allocation of Authority between Client and Lawyer). The amendments contained in the Discussion Draft provide guidance on lawyers’ client due diligence obligations under the ABA Model Rules of Professional Conduct.”

That document: “For Comment: Discussion Draft of Possible Amendments to Model Rules of Professional Conduct Concerning Lawyers’ Client Due Diligence Obligations” —

• “Anti-money laundering and counter terrorism financing regulations applicable to lawyers is a complex subject.3 The primary issues surrounding this subject generally can be divided into three overarching topics: (1) client due diligence; (2) disclosure of beneficial ownership information; and (3) suspicious activity reporting. The requests for comment on this Discussion Draft by the Standing Committee on Ethics and Professional Responsibility and Standing Committee on
  Professional Regulation are focusing on the lawyers’ client due diligence obligations under the ABA Model Rules of Professional Conduct (Model Rules).”
• “Despite the ABA Good Practices Guidance, the Ethics Opinions, and the current text of the black letter and Comments to the Model Rules, the FATF, U.S. Government (including the Department of Treasury), and others continue to urge that the legal profession create an enforceable client due diligence obligation in the Model Rules. They point to the 2016 FATF Report’s recommendations, and events like the Paradise Papers, the Panama Papers, the 60 Minutes -Global Witness exposé, and the Pandora Papers , as necessitating further action by the legal profession. They argue the failure of the profession to act will result in increased federal legislative and regulatory action. To address these concerns about enforceable lawyer client due diligence obligations, the Ethics and ABA Standing Committee on Professional Regulation ( Regulation Committee) developed possible amendments to the Model Rules.”
• “The Ethics and Regulation Committees propose adding a new Comment to Model Rule 1.0. The
  Comment will provide enhanced guidance regarding the statement in the black letter of Rule 1.0(f)
  that a person’s knowledge may be inferred from the circumstances:
  • [11] A lawyer’s knowledge may be derived from the lawyer’s direct observation, credible
    information provided by others, reasonable factual inferences, or other circumstances. For
    purposes of these Rules, a lawyer who ignores or consciously avoids obvious relevant facts may
    be found to have knowledge of those facts.”
• “Specific Questions to Supplement General Comments:
  • 1. Are both “ignores” and “consciously avoids” necessary in the explanation or is
    ‘consciously avoids’ sufficient? Please explain why or why not.
    2. Does the suggested new Comment benefit by the inclusion of the modifier ‘obvious’
    before “relevant facts”? Please explain why or why not.”