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62 P E E R T O P E E R : I L T A ' S Q U A R T E R L Y M A G A Z I N E | F A L L 2 0 2 2 money-laundering criminals. In recent decades, global organizations and governments started to focus on lawyers as enablers of money laundering because they fall under a designated non-financial business and profession. 6 In 2001, the Financial Action Task Force (FATF), an international organization tasked with creating and promoting global policies to combat the threat of money laundering, identified lawyers as potential gatekeepers to money laundering . 7 Law firms of all types and sizes are vulnerable to the risk of money laundering because of the varied nature of services they provide. For example, firms can provide services similar to the methods criminals use to hide money, like the creation of trusts and private companies, and firms regularly handle large amounts of money on behalf of clients. After all, the involvement of a licensed law firm adds an appearance of legitimacy, and lawyer- client confidentiality may pose an ethical dilemma to some lawyers if financial crime is suspected. 8 According to FATF's publication for legal professionals called "Guidance for a Risk-Based Approach," other services may include: 9 • Advising on the purchase, sale, leasing, and financing of real property • Giving tax advice • Advocating before courts and tribunals • Representing clients in disputes and mediations • Advising clients during divorce and custody proceedings • Giving advice on the structuring of transactions • Providing advisory services on regulations and compliance • Providing advisory services related to insolvency/ receiver-managers/bankruptcy • Administering estates and trusts • Assisting in the formation of entities and trusts • Providing trust and company services • Acting as intermediaries in the trade of citizenship and residency or acting as advisers in residence and citizenship planning • Providing escrow services and token custody services in connection with legal transactions involving an initial coin offering or virtual assets • Legitimizing signatures by confirming the identity of the signatory (in the case of notaries) • Overseeing the purchase of shares or other participations (also in the case of notaries A lawyer's services may be used by criminals for money laundering with or without the knowledge of the lawyer. For example, a criminal may ask a lawyer to hold money in a client trust account, pending completion of the purchase of real estate, equipment, or another similar transaction. 6 The FATF stated, "lawyers are vulnerable to complex money- laundering schemes due to their ability to easily switch between advising on financial and fiscal matters, establishing trusts and corporate entities, and completing property and other financial transactions, such as investments." 7 Q 3 W H I T E P A P E R S

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