Portugal

CENTRAL AUTHORITY FOR REPORTING

• The Registries and Notaries General Directorate (for notaries and registrars);
• The Bar Association (for lawyers);
• The National Association for Solicitors (for solicitors).

ANTI-MONEY LAUNDERING REGULATOR(S)

For financial entities:

• The Securities Market Commission – CMVM
• The Bank of Portugal – BdPT

For non-financial entities:

• The Portuguese Gambling and Tourism Inspection Institute
• The Institute of Construction and Real Estate
• The Authority for the Food Safety and Economy – ASAE
• The Auditors National Association (ROCs’)
• The Official Accountants Chamber (TOCs’)
• The Registries and Notaries General Directorate
• The Bar Association
• The National Association for Solicitors

HAS THE THIRD EU MONEY LAUNDERING DIRECTIVE BEEN IMPLEMENTED? IF NOT, WHEN IS IT EXPECTED TO BE IMPLEMENTED?

On 5 June 2008, Law nº. 25/2008, which fully implements the Third Directive, was published in the Official Gazette. The Law has been in full force since 10 June 2008.

The new Law nº. 25/2008 revokes the Law nº. 11/2004, which implemented Directive 2001/97/EC (Second Directive).

The main aspects of the new Law are as follows:

1. The new Law closely follows the wording of the Directive.
2. No significant amendments have been introduced to the regime previously in force, with the exception of the following:
   1. Transactions subject to scrutiny: the threshold was raised from 12.500 euros to 15000 euros;
   2. New group of entities subject to reporting duties: service providers.
   
    

3. Although the duties of the financial entities remain mainly unchanged, the Law is now more detailed, having stipulated a duty of professional care. This duty involves the obligation to adopt procedures that may allow such entities:

   1. To understand the share structure of the client;
   2. To obtain information on the objectives and nature of the business relationship;
   3. To obtain information on the origin and destination of the used funds (when justified);
   4. To follow the transactions and verify that they are in line with the client profile;
   5. To keep up to date the information obtained during the business relationship.

The duty of professional care is more demanding when, taking into consideration the characteristics of the client or the transaction, there is a higher risk of money laundering (e.g. transactions by mail or by other means that favour the anonymity of the clients).

The duty is less demanding when the financial entity deals with financial entities of another Member State or a third country with money laundering laws similar to the ones in force in Portugal and companies listed in a Member State or in a third country with money laundering laws similar to the ones in force in Portugal.

LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS

• Law nº. 25/2008 of 5 June 2008 - Regime for Prevention and Repression of the Laundering of Benefits of Illicit Origin (which implements the EU Directives 2005/60/CE, of the Parliament and Council, of 26 October and 2006/70/CE of the Commission, of 1 August.). This Law contains specific provisions for lawyers and solicitors.
• Decree-Law nº. 15/93, of 22 January 1993, which implements the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988; money laundering is punished for the first time but only as to the proceeds of drugs offences.
• Parliament Resolution nº. 70/97, of 13 December 1997 and Presidential Decree nº. 73/97, which approve for ratification and ratify the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime.

ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?

Any lawyers, foreign or national, that practice law in Portugal are subject to the duties of the Portuguese Money Laundering Laws to the same extent as local lawyers, whenever they represent their clients in the following matters:

1. Buying and selling real estate, business establishments and corporate rights;
2. Management of funds, marketable securities or other assets belonging to customers;
3. Opening and management of bank accounts, savings accounts or securities; creation, operation or management of companies, trust funds or similar structures;
4. Creation, exploitation or management of companies or similar structures;
5. Conduct of financial or real estate operations for a customer;
6. Holding or purchasing of rights over a professional performing sport activities.

LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE

The Portuguese Bar Association (Ordem dos Advogados) is playing an active role in assisting lawyers regarding this issue.

IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?

At the moment there is no information available.

DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS

Duty to Identify

1. The duty to identify consists of requiring identification from customers and their respective representatives. Lawyers and solicitors acting on behalf of clients shall identify those clients, as well as the object of the contracts and of the transactions, where the amounts involved equal or exceed €15 000.
2. Whenever there is knowledge or grounds for suspicion that the customer is not acting on his own behalf, information from the customer shall be obtained on the identity of the person on whose behalf he is actually acting.
3. When the overall amount is not known at the time when the transaction or transactions are initiated and the duty to identify depends on reaching a designated threshold, identification shall proceed as soon as there is knowledge of the sum and it is established that the designated threshold has been reached.
4. When transactions, regardless of the amount, are more likely to be related to money laundering offences due to their nature, complexity, unusualness having regard to the customer’s activity, the amounts involved, the frequency, the economic-financial situation of the involved persons or the instruments used for payment, the entities subject to the duty to identify have the additional special duty to take the appropriate measures so as to identify the customers and, if applicable, their representatives or other persons acting on their behalf.

Duty to Keep Documents

Copies or references to the evidence required for identification shall be kept for a period of seven years from the time of the identification, or in case of an ongoing business relationship, for an equal period after its termination.

Duty to examine

The duty to examine consists of the requirement to examine closely those transactions that by their nature, complexity, unusualness relative to the customer’s typical activity, the amounts involved, the frequency, the economic-financial situation of the persons involved, or the instruments used for payment are more likely to involve the offence of money laundering.

Duty to cooperate

The duty to cooperate consists of the obligation to provide all the assistance required by the judicial authority responsible for any proceeding, by the Attorney General or by the Financial Information Unit in order to check compliance with the duties provided for under law, including the provision of all the information and all the documents required by the judicial authority.

Duty of Professional Care

The duty of professional care exists whenever a business relationship is established with a client. This duty involves the obligation to adopt procedures that may allow a lawyer:

1. To understand the share structure of the client;
2. To obtain information on the objectives and nature of the business relationship;
3. To obtain information on the origin and destination of the used funds (when justified);
4. To follow the transactions and verify that they are in line with the client’s profile;
5. To keep up to date the information obtained during the business relationship.

The duty of professional care is more demanding when, taking into consideration the characteristics of the client or the transaction, there is a higher risk of money laundering (e.g. transactions by mail or by other means that favour the anonymity of the clients).

The duty is less demanding whenever the financial entity deals with financial entities of another Member State or a third country with money laundering laws similar to the ones in force in Portugal and companies admitted to listing in a Member State or in a third country with money laundering laws similar to the ones in force in Portugal.

DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?

Lawyers, as one of the entities covered under Portuguese money maundering laws, are subject to the duty of professional care described above, which establishes a risk-based approach to client due diligence.

ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?

The duty of professional care is more demanding when in view of the characteristics of the client (e.g. politically exposed persons) or of the transaction there is a higher risk of money laundering.

This means that the covered entities under Law 25/2008 must comply with a more demanding duty of professional care whenever they enter into:

• Long distance business transactions/relationships, in particular the ones that may favour the anonymity of the parties;
• Banking operations by mail with banks from non EU Member States and from any other countries designated as high risk by the competent supervision authorities.
• Business transactions/relations with politically exposed persons.

ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?

The simplified due diligence measures, which consist of a less demanding duty of professional care, apply whenever the client is:

• A financial entity from a EU Member State or from a Third Country with similar anti-money laundering laws;
• A quoted company with its shares traded in a regulated market of any EU Member State or in a third country with similar anti money laundering laws;
• The Portuguese State or any other public entity, including institutions created by the EU Treaties;
• The entity that provides mail services or the Portuguese Institute of Treasury and Public Credit Management – Instituto de Gestão da Tesouraria e Crédito Público;
• The effective beneficiary of an account in a credit institution entitled by lawyers or solicitors, if the credit institution is aware of the identity of the effective beneficiary.

ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.

Under the terms of the Law 25/2008, only financial entities, excluding Currency Agencies, may rely on third party due diligence. Therefore, lawyers must comply with the duty of professional care independently.

WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?

If a suspicion or knowledge is drawn from the examination of the transaction, or from any other means, of certain facts indicating the commission of a laundering offence, lawyers and solicitors shall immediately inform the Bar Association and the National Association for Solicitors. However, no report shall be made on information gathered within the context of evaluating a client’s legal situation, within the scope of legal counselling, while defending or representing a client in legal proceedings, or with regard to legal proceedings – including advice given on ways to take or avoid action – regardless of whether the information was gathered before, during or after the proceedings.

DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?

The statutes of the Portuguese Bar Association describe attorney/client privilege and the duty of confidentiality. However, new Law nº. 25/2008 creates a potential exception to such privilege and duty in the form of suspicious transaction reporting.

In cases where lawyers may find suspicious transactions they must disclose such transactions to the Bar Association, which in its turn gives notice to the General Attorney and to the Unit of Financial Information.

However, as mentioned above, no report shall be made on information gathered within the context of evaluating a client’s legal situation, within the scope of legal counselling, while defending or representing a client in legal proceedings, or with regard to legal proceedings – including advice given on ways to take or avoid action – regardless of whether the information was gathered before, during or after the proceedings.

DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?

Since Law nº. 25/2008 acts as an exception to the existing deontological regime, there is no legal sanction for lawyers that comply with this Law when filing a suspicious transaction report. However, if the content of the report exceeds the strict information statutorily required, criminal, civil and disciplinary liability might be triggered.

ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?

Law nº 25/2008 does not have any specific requirements in this regard.

However, under the terms of the statutes of the Bar Association, which contains a description of lawyers’ deontological duties, reciprocal trust and transparency between a lawyer and client is a fundamental principle of the attorney/client relationship.

IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.

Lawyers are required to adhere to professional secrecy and confidentiality duties, except in the cases specifically stipulated or imposed by law or court order.

DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT

Law nº. 25/2008 has no specific provisions. However, the lawyers’ deontological regime stipulates a number of principles and procedural rules that must be considered on a case by case basis.

ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE

All the entities under Law nº 25/2008, which include lawyers and solicitors, have a duty to create internal procedures of control and risk management in order to comply with the duties stipulated by law.

Those entities must be capable of demonstrating at any time that they have the required internal procedures in order to comply with the anti-money laundering laws.

DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION

Lawyers, as any other professionals, are subject to the surveillance duties stipulated by Law nº. 25/2008.

HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?

N/A.

HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?