Risk Update

AML Rules — ABA Leader Notes Anti-Money Laundering “Absolutely Not a Dead Issue,” Lawyer Expert Notes Appearances, Debate Continues

Posted Dan Bressler

“ABA Debate On Money Laundering Rule Lives On After Alert” —

  • “Despite concerns among anti-money laundering advocates, the American Bar Association’s recent warning on “willful blindness” to clients’ financial malfeasance didn’t end the group’s long-standing internal debate over a black-letter ethics rule cementing the profession’s duty to help deter money laundering, according to a bar committee member.”
  • “Lynda Shely, who sits on the ABA’s Standing Committee on Ethics and Professional Responsibility, said a money laundering rule proposal is ‘absolutely not a dead issue,’ and will remain on the table after she takes over as chair later this year. ‘The committee will continue to look at this because people do keep bringing it up,’ Shely said. ‘There are concerns that an opinion is not enough, even if the committee believes it provides very useful guidance.'”
  • “The ABA Model Rules ‘are designed to address broad concerns of professional responsibility, not specific situations, and that’s where we’ve been struggling to craft something that works,’ said Shely, who emphasized that she doesn’t speak for the bar or the committee as a whole. She is set to become the standing committee chair in August.”
  • “Despite the ABA’s policy position, many in the anti-corruption community said they’ve maintained at least modest optimism that the bar’s influential ethics committee, which is wholly distinct from the group’s D.C.-based lobbying arm, would still propose a rule amendment that would explicitly require lawyers to try to determine if clients are engaged in money laundering or terror financing and provide guidance on next steps.”
  • “But that optimism was shaken in April when the committee released an advisory telling lawyers to “inquire further” when faced with circumstances showing a ‘high probability’ that a client wants to use their services for criminal or fraudulent activities.”
  • “The ABA’s position on beneficial ownership and in the rule debate ‘makes it look like an industry out to protect itself as opposed to doing what’s in the best interests of the public and the general welfare,’ he said [Bruce Zagaris, an international enforcement expert at Berliner Corcoran & Rowe LLP and member of the ABA’s gatekeeper task force]. ‘Increasingly, it is finding itself more and more isolated on this issue.'”