23 December 2016 – After the London Anti-Corruption Summit which took place in May 2016, the International Bar Association (IBA) and the Organisation for Economic Co-operation and Development (OECD) have agreed to form a task force to develop professional conduct standards and practice guidance for lawyers working on international commercial structures. These guidelines include a set of recommended actions for governments.
The International Bar Association (IBA), is the world’s leading organisation of international legal practitioners, bar associations and law societies. Namibia is represented on the IBA by local lawyer, Advocate Dee Sauls.
The Organisation for Economic Co-operation and Development (OECD), promotes policies to improve the economic and social well-being of people around the world by involving government in the understanding of what drives economic, social and environmental change.
The principle motivation for forming the OECD-IBA Task Force on The Role of Lawyers and International Commercial Structures is to create a key component in the global fight against corruption.
The release earlier this year of the so-called Panama Papers highlighted that, in completing legal transactions for their clients, lawyers may knowingly or unwittingly assist clients in asset concealment or money laundering.
International standards, such as the Recommendations of the Financial Action Task Force (FATF), provide a framework for conducting due diligence on customers and identifying the beneficial owner. However, countries’ implementation of these standards has been variable. Since the scandal, many governments have called for greater transparency of such transactions, sometimes requiring reporting by lawyers.
At the same time, lawyers are mindful of their professional obligations of confidence to their clients. The Task Force will develop appropriate guidelines for international commercial structures, ensuring that confidence in both the lawyers’ role and the core principles of the legal profession are preserved.
IBA President David W Rivkin commented: ‘It is undeniable that lawyers must play a central role in complex offshore financial transactions. To ensure that they do not unwittingly facilitate economic crime, it is imperative that lawyers ask their clients the right questions, vet them sufficiently, understand who are to be the ultimate beneficiaries of their client’s actions, and have an understanding of sovereign laws.
In practice, inevitably complications arise. For example, what are a law firm’s obligations when conflicting sovereign laws apply in cross-border transactions? Recent events have shown that existing international and professional standards may not provide sufficiently clear guidance to lawyers who handle such transactions. Recent actions also present the danger that in their anti-corruption activities, governments may ignore the need for lawyers to advise their clients in confidence.
For this reason the IBA has partnered with the OECD, to create appropriate standards while, at the same time, respect the fundamental rules applicable to the profession that are a key element of the rule of law. Each organisation will bring its relevant expertise to the project.