{"id":1043,"date":"2019-06-26T16:48:15","date_gmt":"2019-06-26T20:48:15","guid":{"rendered":"http:\/\/ielrblog.com\/?p=1043"},"modified":"2019-06-27T09:21:29","modified_gmt":"2019-06-27T13:21:29","slug":"oecd-and-iba-issue-report-on-proper-roles-of-lawyers-and-international-commercial-structures","status":"publish","type":"post","link":"https:\/\/ielrblog.com\/index.php\/2019\/06\/26\/oecd-and-iba-issue-report-on-proper-roles-of-lawyers-and-international-commercial-structures\/","title":{"rendered":"OECD and IBA Issue Report on Proper Roles of Lawyers and International Commercial Structures"},"content":{"rendered":"<p>On May 31, 2019, the International Bar Association and the Secretariat of the Organization for Economic Co-operation and Development published a <a href=\"https:\/\/www.ibanet.org\/Conferences\/The-role-of-lawyers-in-international-commercial-structures.aspx\">Report of the Task Force on the Role of Lawyers and International Commercial Structures<\/a>.<\/p>\n<p>The Report observes that lawyers\u2019 professional obligations and clients\u2019 rights are regulated by domestic laws and regulations, and\/or ethical and deontological codes.\u00a0 The Task Force states that there are certain key principles that should apply in this context in order to balance between the rights of, and duties to, the client on the one hand and a lawyer\u2019s other professional or legal duties on the other.\u00a0 The Report sets forth seven principles without prejudice to the rule of law and related legal conventions, a lawyer\u2019s duty of confidence and laws relating to privilege.<\/p>\n<p>The Task Force recommends the Statement of Principles to national bar associations and law societies with a view to encouraging them to adopt the principles and engage with their governments to explain the role of the principles in ensuring the proper administration of justice and in upholding the rule of law.\u00a0 The sponsors also published an executive summary of the report<\/p>\n<p>The Task Force advocates that, where the Principles are adopted and become part of domestic law and\/or professional regulations, their disregard should result in the application of proportionate disciplinary measures, including, where appropriate, disbarment, recognized also in foreign jurisdictions.<\/p>\n<p><strong>Principle 1:\u00a0 Non-facilitation of illegal conduct<\/strong> \u2013 Although a lawyer may be unwittingly associated with illegal conduct, including financial crimes, a lawyer should not facilitate illegal conduct, and should undertake the necessary due diligence to avoid doing so inadvertently.<\/p>\n<p><strong>Principle 2:\u00a0 Misuse of the duty of confidence and privilege<\/strong>. \u00a0Notwithstanding the lawyer\u2019s duty of confidence to a client and the concept of legal professional privilege, a lawyer should not use the confidential nature of the lawyer-client relationship or the principles of legal professional privilege to shield wrongdoers.\u00a0 A lawyer should give due and proper consideration to refraining from acting for a client if the lawyer is aware of, or has reasonable grounds to believe, that the primary purpose of the retainer is to permit the client to be able to rely on the confidential nature of the lawyer-client relationship or privileged communication) so as to permit or encourage the client to engage in illegal conduct.<\/p>\n<p><strong>Principle 3:\u00a0 Client due diligence<\/strong>.\u00a0 A lawyer should undertake and document all reasonable and proportionate inquiries in order to identify and verify a client, as well as identify any ultimate\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 beneficiary of the conduct or transaction, the origin of the funds for the transaction (consistent with applicable anti-money laundering or counterterrorism financing legislation), the substantive nature of the conduct or transaction (including expected revenue and taxation consequence of the transaction) and, subject to Principle 5, be satisfied that the conduct and\/or transaction is legal in the lawyer\u2019s jurisdictions.<\/p>\n<p><strong>Principle 4: Action where client conduct is may be or becomes illegal<\/strong>.\u00a0 When the conduct of a client is, may be, or becomes illegal, even if it was originally legal and the lawyer continues to be retained by the client, a lawyer should advise the client of the consequences of the conduct and recommend that the client pursues alternative solutions.\u00a0 If the client persists in the conduct, the lawyer should give due and proper consideration to ceasing to act, and terminate the retainer.<\/p>\n<p><strong>Principle 5:\u00a0 Multijurisdictional risk.<\/strong>\u00a0 Where a transaction involves conduct by a client, agents or representatives of a client in more than jurisdiction and the lawyer has reasonable grounds to believe that the conduct may be or may become illegal in a jurisdiction(s), a lawyer should verify that expert advice is or has been obtained by the client from a lawyer experienced in the conduct or transaction in that jurisdiction.\u00a0 If such advice has not been obtained and the client wants to proceed with the transaction, the lawyer should recommend that such advice be obtained (at the cost of the client).\u00a0 If the client declines to obtain such advice and persists in the conduct, then the lawyer should give due and proper consideration to ceasing to act and terminate the retainer.<\/p>\n<p><strong>Principle 6:\u00a0 Use of illegal obtained information.<\/strong> Lawyers should strongly discourage a client from paying private parties or public officials to obtain illegally obtained evince, which of itself may constitute a criminal offense in many jurisdictions. To facilitate this, legal frameworks should be consistent across jurisdictions as much as possible, since it is often through cross-border conduct that confidential or secret information in country A is accessed (without the consent of the owner of the information) and then disclosed to a person in country B.\u00a0 An independent court should, where necessary, resolve the question as to what use can be made of such information, based on the applicable domestic framework.<\/p>\n<p><strong>Principle 7:\u00a0 Disclosure of beneficial ownership.<\/strong>\u00a0 A lawyer should obtain and maintain up-to-date beneficial ownership information and take reasonable measures to verify its accuracy in relation to the lawyer\u2019s clients.\u00a0 Domestic laws should provide for the disclosure of ultimate beneficial ownership of any corporation, trustor other legal entity formed within that country\u2019s jurisdiction.\u00a0 Beneficial ownership information should be available to state regulators, investigators and enforcement agencies.\u00a0 Governments must address whether it needs to be publicly available.<\/p>\n<p><strong>Principle 8:\u00a0 Advertising by lawyers on international commercial structures<\/strong>.\u00a0 Any advertising by lawyers should be transparent, accurate, and truthful.\u00a0 Domestic regulation, bar associations, and law societies should ensure the lawyer advertising is accurate and truthful.<\/p>\n<p>The Report does not seek to duplicate existing international or other national guides for the legal profession in terms how a lawyer should act or not act in certain circumstance.\u00a0 The Report does not seek to cover the many anti-money laundering and counterterrorism financing laws, obligations and disclosure duties that exist in many countries.\u00a0\u00a0 Instead, it focuses on high-level issues of principle that should assist governments in policy formulation and in guiding lawyers as to how they should conduct themselves, consistent with a lawyer\u2019s underlying domestic legal and ethical obligations.<\/p>\n<p>The Report also sets form the minimum good practice required when a lawyer proposes to accept instructions in a cross-border commercial matter, especially, but not exclusively, from a new client or a client with whom the lawyer has not worked for at least 12 months.<\/p>\n<p>The Report provides detailed guidance for the eight above-mentioned principles with citations to guide legal professionals.<\/p>\n<p>Annex B contains existing guidance concerning the role of lawyers with regard to international commercial structures.<\/p>\n<p>The July issue of the IELR will have a more comprehensive discussion of the Report.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On May 31, 2019, the International Bar Association and the Secretariat of the Organization for Economic Co-operation and Development published a Report of the Task Force on the Role of Lawyers and International Commercial Structures.<\/p>\n<p>\u00a0The Report observes that there are certain key principles that should apply in this context in order to balance between the rights of, and duties to, the client on the one hand and a lawyer\u2019s other professional or legal duties on the other.\u00a0 The Report sets forth seven principles without prejudice to the rule of law and related legal conventions, a lawyer\u2019s duty of confidence and laws relating to privilege.<\/p>\n","protected":false},"author":1,"featured_media":414,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[14,19,5,21,43,4,83,46,3,11,63],"tags":[],"class_list":{"0":"post-1043","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-data-privacy","8":"category-gatekeeper-obligations","9":"category-international-tax-enforcement-cooperation","10":"category-international-organizations","11":"category-international-regimes","12":"category-money-laundering-and-bank-secrecy","13":"category-sanctions","14":"category-tax-crime-enablers","15":"category-transnational-corruption-money-laundering-and-asset-forfeiture","16":"category-transnational-organized-crime-cybercrime-narcotics","17":"category-transparency-and-governance","18":"entry"},"yoast_head":"<!-- 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