IBA and OECD establish task force to develop standards for lawyers in the ‘fight against corruption’
A new international anti-corruption task force will develop standards and practice guidance for lawyers involved in establishing and advising on international commercial structures and recommended actions for governments.
Following on from 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 the OECD-IBA Task Force, the main reason for which “is to create a key component in the global fight against corruption”.
According to the IBA, the release earlier this year of the Panama Papers highlighted that 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. But the IBA said that 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. The Task Force is intended to “work to develop appropriate guidance on forming international commercial structures, while ensuring that confidence in both the lawyers’ role and the core principles of the legal profession are preserved,” the IBA said.
IBA president David W Rivkin said: “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 the right questions of their clients, 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 foremost inter-governmental organisation analysing and promoting economic policies, 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.’
Nicola Bonucci, OECD director for legal affairs, added: “Mere formal respect of the law is a necessary but not always sufficient condition and experts from the OECD and from the IBA will confront their point of view and work together in order to ensure that these professional standards meet the expectations of the various stakeholders. This pioneering work will not substitute or conflict with existing international and national requirements and will complement other ongoing OECD work on the role of tax intermediaries.”