Is AML Compliance Only for Financial Institutions?
In light of the recent news coverage by The Cyprus Mail regarding two law firms in Cyprus which have lost their licenses due to AML violations, the answer is that all professionals have to adhere to AML Compliance regulations. Lawyers are in a position of trust.
Clients trust their lawyers with their sensitive issues and transactions… and to safeguard their rights. Lawyers have a duty to do their due diligence on their clients- especially if they are making transactions on behalf of their clients or acting as nominee directors in their clients’ companies. Lawyers have to ensure the origin of the money they are transacting on behalf of their clients and ensure the money is not coming from terrorist financing or other illegal sources.
Just like with financial institutions, AML regulations and the FATF 40 Recommendations apply to non-financial businesses and professions such as casinos and other businesses involved with gambling, dealers in high-value items, and even gatekeepers such as lawyers, notaries, accountants and auditors. This means that rules of “Know Your Client,” “Customer Due Diligence” and even “Enhanced Due Diligence” will apply (if the latter is required in the specific circumstances at hand).
This is why it is extremely important to have a well-drafted compliance policy internally and to have employees adhere to the policy. The policy should be updated periodically and as the laws change.
For legal consultation on drafting or amending your company’s compliance manuals/policy, please contact us at Emily@eaglaw.co