SUMMARY

On the 4th of December 2001, the European Parliament and Council of the European Union published Directive 2001/97/EC, amending Council Directive 91/308/ EEC on the prevention of the use of the financial system for the purpose of money laundering.

Member states of the European Communities were obliged to comply with the Directive  by the 15th of June 2003.

The ECBA money laundering project aims to present a summary of the important topics of the Directive and an overview of the implementation of the Directive in the legislations of each member state.

Since the Directive sets out the minimum provisions which should be applied by every member state, we will highlight where member states have implemented a more stringent regime.

Below is a  summary of the Directive from the perspective of attorneys at law, focusing on the obligations that are imposed upon attorneys while practising their profession.

 

The Directive  of December 4th 2001 (2001/97/EC):

Under article 2A, the Directive  states that all obligations set forth in the Directive  will be imposed on “notaries and other independent legal professions, when they participate, whether:

  1. by assisting in the planning or execution of transactions for their client concerning the:
    • buying and selling of real property or business entities;
    • managing of client money, securities or other assets;
    • opening or management of bank, savings or securities accounts;
    • organisation of contributions necessary for the creation, operation or management of companies;
    • creation, operation or management of trusts, companies or similar structures.
  2. Or by acting on behalf of and for their clients in any financial or real estate transaction.”

 

Although not mentioned explicitly, attorneys at law fall under category 5 of article 2A of the Directive.

One should not forget that the main aim of the Directive was not only to reflect best international practice in this area, but to also continue to set a high standard in protecting the financial sector and other vulnerable activities from the harmful effects of the proceeds of crime.

The obligations imposed upon notaries and other independent legal professionals, including attorneys at law, are the following:

1. Identification.

Independent legal professionals are obliged to obtain identification of their customers by means of supporting evidence when entering into business relations.

In particular they are obliged to do so in the following circumstances:

  • when transactions are made by customers involving a sum amounting to 15.000 EUR or more, whether the transaction is carried out in a single operation or in several operations which seem to be linked.
  • Identification is required in case of doubt as to whether the customers are acting on their own behalf.

Persons, subject to the Directive  shall carry out identification wherever there is suspicion of money laundering.

An exception is made to the obligation to obtain identification information where the customer is a credit or financial institution covered by the Directive  or a credit or financial institution situated in a third country which imposes equivalent requirements to those laid down by this Directive .

 

2. Obligation to report.

Article 6 of the Directive  contains the obligation for all institutions and persons subject to the Directive  to cooperate fully with the authorities responsible for combating money laundering:

  • by informing those authorities, on their own initiative of any fact which might be an indication of money laundering;
  • by furnishing those authorities, at their request, with all necessary information, in accordance with the procedures established by the applicable legislation.

Thus, attorneys at law, being part of category 5 of article 2A of the Directive are only obliged to identify if they need to provide a report when they participate:

Outside these activities the Directive does not impose any obligations on independent legal professionals to report potential money laundering cases.

  1. by assisting in the planning or execution of transactions for the client concerning the:
    • buying and selling of real property or business entities;
    • managing of client money, securities or other assets;
    • opening or management of bank, savings or securities accounts;
    • organisation of contributions necessary for the creation, operation or management of companies;
    • creation, operation or management of trusts, companies or similar structures;
  2. or by acting on behalf of and for their client in any financial or real estate transaction.


II. Implementation of the Directive by the member states:

At the ECBA Board Meeting in October 2007, it was decided that the working group on cross border financial crime would conduct a comparative study on the money laundering regulations in Europe and especially on their impact on the legal profession.

A questionnaire was presented to the members of the ECBA at the spring conference in Amsterdam in April 2008.

This questionnaire aimed at obtaining information about national money laundering legislations in a consistent manner in order to be able to present templates, which can serve as a tool for defence lawyers throughout Europe, confronted with a cross border financial case and thus with a legal system they are not familiar with.

 

Each summary gives a quick overview per country of the most important questions and answers concerning recent AML/CTF legislation.

Select a country from the AML/CTF country profile menu...