Slovenia

CENTRAL AUTHORITY FOR REPORTING

Urad Republike Slovenije za preprecevanje pranja denarja (Office for Money Laundering Prevention of the Republic of Slovenia) is the central Slovenian authority for the supervision and management of data, information and documentation in respect of transactions or persons suspected of money laundering and financing terrorist activities.

ANTI-MONEY LAUNDERING REGULATOR(S)

Regulators in charge of monitoring and supervision (including issuing subordinate regulations on the basis of the general Law on the Prevention of Money Laundering and Terrorist Financing (see below)) of transactions with respect to money laundering and terrorist financing include:

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

The Republic of Slovenia implemented the Third EU Money Laundering Directive (the “Directive”) with the Law on the Prevention on Money Laundering and Terrorist Financing (“ZPPDFT”, Zakon o preprecevanju pranja denarja in financiranja terorizma, Official Gazette of the Republic of Slovenia No. 60/07 of 2 July 2007; hereinafter “the 2007 Act”) which became fully effective at the end of January 2008. A majority of the Directive’s requirements (such as the number of customers checks, records and statistical information, supervision and international cooperation) were previously mplemented through amendments to the laws on the prevention of money laundering of 1994 and 2001. The ZPPDFT fully implements all mandatory provisions of the Directive (i.e. provisions that must be transposed without any reservation or deviation by the member states in order for the implementation of the Directive to be successful) and some optional provisions of the Directive (e.g. on customer due diligence performed by third parties).

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

The 2007 Act (Zakon o preprecevanju pranja denarja in financiranja terorizma - “ZPPDFT”) represents the principal and general legislation on the prevention of money laundering and terrorist financing in Slovenia. On the basis of the 2007 Act, several executive regulations (currently eight) have been issues by the relevant authorities.
In addition to the above general legislation, money laundering and terrorist financing is also dealt with within certain special legislation covering specific issues, such as the Criminal Code, the Law on Criminal Liability of Legal Entities, the Law on Gambling, the Banking Act and the Foreign Exchange Act.

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

A foreign lawyer may perform legal service in Slovenia only if it is registered with the Attorney’s register held by the Slovenian Bar Association.
A lawyer from an EU member state (“EU Lawyer”) is eligible to be registered as a foreign attorney with the Slovenian Bar Association. When so registered, such EU Lawyer may perform its services subject to all rights, obligations and conditions applicable to Slovenian attorneys, including those related to money laundering and terrorist financing.

A lawyer from a country which is not an EU member state and who has been licensed to perform legal services in such other country may perform attorney’s services within the Republic of Slovenia under requirements applicable to EU Lawyers and subject to reciprocity.

In principle, one-time visiting lawyers do not seem to be subject directly to the requirements of the ZPPDFT. There is, however, a wide range persons that may fall within the definition of “organisation” and become subject to the ZPPDFT. “Organisation” includes also “any legal or natural person that engages in a business activity related to, inter alia, granting of loans, management of third party investments and related advice, intermediary services in relation to borrowings and life insurance, accounting services, tax advice, corporate or fiduciary services and real estate transactions”. Therefore, judgment as to whether a one-time visiting lawyer is subject to the ZPPDFT should therefore be made on a case-by-case basis.

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

In March 2003, the Board of the Slovenian Bar Association passed a list of indicators of suspicious transactions and/or circumstances related to an attorney’s work. A member of the Board is entrusted with reporting suspicious transactions under the ZPPDFT.

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

The Slovenian Bar Association acts as supervisor of the performance of and compliance with the ZPPDFT as far as attorneys in Slovenia are concerned. Since November 2007, a member of the Board of the Slovenian Bar Association has been entrusted with reporting on ZPPDFT performance and compliance.

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

It should be noted that, in general, an attorney is subject to requirements under the ZPPDFT Act when (i) assisting in planning or the performance of certain transactions, such as those related to the sale or purchase of real property or a company, management of the client’s assets, opening or managing the client’s cash or securities accounts, raising of funds for the establishment or operation of the company, establishment or performance or management of an institution or fund or company, or (ii) conducting financial transactions or real estate transaction in the name of and for the account of the client.

Client due diligence is mandatory upon: 

• Entering into a business relationship with a client;
• Conducting a transaction with a value over €15,000 (unless there are no reasons to suspect money laundering or terrorist financing) - this condition does not apply to lawyers;
• The existence of doubt over the credibility of previously gathered information on the client or beneficial owner of the client;
• The existence of reasons for suspicion of money laundering or terrorist financing with respect to the client or transaction.

 In addition, client due diligence must be performed each time a client seeks a lawyer’s advice in relation to money laundering or terrorist financing.

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

Yes. A lawyer must assess for each individual client if and to what extent a suspicion of money laundering and terrorist financing exists. For that purpose a list of indicators and a risk analysis must be prepared.

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

Yes. For certain types of clients (such as politically exposed persons, or clients for which due diligence has been performed in the absence of the client, or when great risk regarding money laundering or terrorist financing exists in relation to a specific client), enhanced due diligence is obligatory.

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

Yes. For certain types of clients (e.g. listed companies, state bodies, etc.) simplified due diligence is sufficient, provided that there are no reasons for suspicion of money laundering or terrorist financing.

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

The organisation shall indisputably establish the client's identity by obtaining all the information in accordance with the Law.

LAWYERS PROSECUTED FOR MONEY LAUNDERING SITUATIONS

The ZPPDFT enables lawyers and other organizations subject to the ZPPDFT to rely on client due diligence performed by third parties, provided such due diligence complies with certain prescribed conditions. The 2007 Act, inter alia, also:

1. Defines persons that may act as a “third party” (e.g. banks, brokerage houses, insurance companies, etc.), and D
2. Describes the due diligence procedure of such a third party, such as - the third party shall, when necessary, submit the information and documentation obtained with respect to the client; if the lawyer has reasonable doubt regarding the credibility of third party due diligence, a written statement on the accuracy of such information may be required; third party due diligence shall have been preformed in the client’s presence; the third party must also have performed such other obligations as is imposed on a lawyer in relation to client due diligence; etc.

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

A lawyer is under an obligation to report suspicious transactions if:

1. A client’s cash transaction exceeds €30,000 and there exist grounds for a suspicion of money laundering or terrorist financing;
2. The transaction or the client raises a reason to suspect money laundering or terrorist financing; or 
3. A client seeks advice on money laundering or terrorist financing.

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

Yes. There is no requirement to report suspicious transactions, provided that information on any such transaction is obtained as a result of the representation of a client in juridical proceedings; this includes legal advice on the initiation or avoidance of such proceedings, regardless of whether the information has been acquired 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?

The lawyer is not liable for damages that may arise as a result of a compliance with the 2007 Act; similar, no disciplinary or criminal liability of a lawyer exists in relation thereto. On the other hand, there are no specific provisions for indemnity of a lawyer that complied with the ZPPDFT.

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?

After a suspicious transaction report has been filed, there are no obstacles for a lawyer to continue with services, and no consent of authorities is required. However, if there are reasonable grounds to suspect money laundering or terrorist financing, the Money Laundering Prevention Office may by a written injunction, and upon notification to the competent authorities, suspend the transaction for a maximum of 72 hours.

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

Yes. The ZPPDFT prohibits a lawyer and its employees from tipping-off a client regarding the initiation of proceedings with the Office for Money Laundering Prevention.

A lawyer’s attempt to dissuade a client from illegal activity does not represent such a disclosure.

DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT

If client due diligence in accordance with the ZPPDFT is not possible, the establishment of a business relationship with a client is prohibited.

ARE THERE ON-GOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE

Lawyers have to obtain information required by the ZPPDFT for existing clients and have to prepare a risk analysis for such clients. Upon each new engagement (or transaction) of a client, lawyers are required to verify and/or update information on the client. Generally, the ZPPDFT requires that those subject to the ZPPDFT monitor a client’s operations.

DESCRIBE ANY OTHER WAYS IN WHICH LAWYER’S ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION

Apart from the general burden and effect of the ZPPDFT on a lawyer’s business, specific matters include:

•  If the Office for Money Laundering Prevention suspects money laundering in connection with a transaction or a certain person, it may request from a lawyer or law firm any information and documentation necessary to ascertain if there is money laundering;l
• Lawyers are required to keep records of clients and transactions on file for ten years, and they must keep record of all visits of any supervisory authority in relation to such records and notify the Office for Money Laundering Prevention of any such visits;
• Every lawyer or law firm with more than four employees must nominate one person to be responsible for money laundering prevention.

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

Not to our knowledge. The Slovenian Bar Association disciplinary bodies have not yet undertaken any procedure in connection with money laundering or terrorist financing against its members, nor issued any measure with respect thereto.

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?

 No.

Information provided by:

Jurij Dolžan and Dana Furlan
Odvetniki Jurij Dolžan, Mitja Vidmar & Igor Zemljaric
Members of the European Law Firm (EEIG; www.european-law-firm.com)

Odvetnik Jurij Dolžan
Slovenska cesta 29, SI-1000 Ljubljana
Tel.: +386 / 1 / 200 7680
Fax: +386 / 1 / 200 7685
jurij.dolzan@jurij-dolzan.com