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14/01/2009 – POLAND ADVANCES TOWARDS THE IMPLEMENTATION OF THE THIRD DIRECTIVE
The Polish Government has announced that a bill amending the current Anti-Money Laundering law (of 16 November 2000) has been completed in order to bring Poland into compliance with the European Third Directive on Anti-Money Laundering (2005/60/EC). The bill will be now subject to approval by the Polish Parliament in a process that may take up to 4 months, according to the Government’s Legislative Office.
As previous regulations, the bill contains provisions that apply to all transactions made by business units and entrepreneurs when the amount exceeds 15.000 euro. According to the bill, penalties may be imposed when the obliged institutions (e.g. banks, financial institutions, lawyers and tax advisers, bookkeepers, brokers) do not comply with their statutory obligation to inform the General Inspector of Financial Information about applicable financial transactions that they know. The draft amendment also obliges covered entities to identify the ultimate beneficiaries of a transaction (client due diligence) including client’s identity, aim and nature of his/her business activity through a special risk based assessment.
According to the draft amendment, the Polish Ministry of Finance will be obliged to publish the list of persons, entities and organizations involved in terrorist actions, in order to supervise and prevent terrorist funding in Poland. Also, it will be appointed an Inter-departmental Committee of Financial Security (running besides the General Inspector of Financial Information), whose role will focus on suggesting the inclusion/ exclusion of individuals and organizations from the Ministry’s list.
Source: Michal Tarka, Poland.
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14/01/2009 – NEW FATF/MENA-FATF MUTUAL EVALUATION REPORT FOR YEMEN: THE LAWYER’S PERSPECTIVE
The Middle East and North African Financial Action Task Force (MENA-FATF) has released an Executive Summary of the Mutual Evaluation Report on Yemen. The report assesses a range of issues relating to anti-money laundering and counter terrorist financing (AML/CFT) in the country.
The report notes that the legal and supervisory framework in Yemen does not bind lawyers to any AML/CFT obligations and therefore these professionals are not subject to any preventative controls or supervision in this regard. Consequently, there are no client identification or due diligence requirements and since lawyers do not generally undergo any special training in this field, there is very little awareness of the risks associated with ML/FT crimes. The assessment team also expressed a lack of effective coordination between the various AML supervisory bodies and found a shortage of human and financial resources.
The report stresses that lawyers do not face any obligation to notify the authorities of transactions that are suspected to conceal illegitimate money laundering or terrorist financing. Moreover, they are under no responsibility to pay special attention to business relationships or transactions with persons from, or currently in, countries that have failed to meet FATF recommendations.
In relation to breaching legal professional privilege, the report points out that lawyers are not currently “immune” from incurring liability when reporting a suspicious transaction.
An executive summary of the report is available here.
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13/01/2009 – FATF RELEASES MUTUAL EVALUATION REPORT FOR MEXICO
The Financial Action Task Force (FATF), the Financial Action Task Force on Money Laundering in South America (GAFISUD) and the International Monetary Fund (IMF) released a mutual evaluation report on 12 January, 2009, regarding the implementation of anti-money laundering and counter-terrorist financing (AML/CFT) standards in Mexico. The report highlights the progress made in introducing AML/CFT procedures although laws criminalising such activity still fall below international standards.
The report also found that FATF Designated Non-Financial Businesses and Professions (DNFBPs) constitute a significant gap in the current AML/CFT framework. With the exception of trust services, which can only be provided by certain financial institutions, there are no measures in place to regulate any other category of DNFBPs, including lawyers. Under the existing rules, DNFBPs are only required to report cash transactions in excess of Mexican Pesos $100,000 to the Tax Administration Service, which is an obligation on all taxpayers and non-profit organisations.
A summary of the mutual evaluation report is available here.
A full copy of the report is available here.
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02/01/2009 - ONTARIO LAWYERS SUBJECT TO NEW CLIENT IDENTIFICATION AND VERIFICATION RULES
In an attempt to combat money laundering, the Law Society of Upper Canada has imposed stricter client identification and verification requirements on its lawyers. The amendments to the ‘Know Your Client’ regulation came into effect on December 31, 2008, and are intended to protect the public by helping lawyers identify and report fraudulent client activity.
Under the new rules, lawyers are required to obtain an increased amount of client information for identification and verification purposes. For organizational clients, this could include the clients’ jurisdiction of formation and business number. If lawyers are involved in the payment or transfer of funds, they may be required to have copies of the organization’s formation documents or shareholder information on file. Lawyers representing individual clients are required to record their clients’ personal and contact information including occupation, address and phone number.
The Law Society of Upper Canada has issued a guide for lawyers on how to comply with the new regulation, which is available here: By-Law 7.1 Guide.
A full copy of the regulation is available here: By-Law 7.1.
Source: “Canada: Effective January 1, 2009, Lawyers must comply with Client Identification and Verification Requirements”, Davies Ward Phillips and Vineberg LLP, 29 December 2008. Available at: www.mondaq.com.
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