Anti-Money Laundering: Role of Attorneys-at-Law
The Anti-Money Laundering and Counter-Terrorist Financing Act (ZPPDFT-1) imposes duties and measures on obliged persons and entities (including attorneys-at-law, depending on the situation) which they must implement to combat money laundering. The duties can be broadly divided into two parts: (i) administrative: adopting or keeping certain documents (especially the adoption of bye-laws, risk assessments, indicators, record keeping, etc.) and (ii) implementation: meaning that obliged persons must in practice implement the law by collecting data and reporting it to the respective Office in order to combat money laundering or terrorist financing. The latter in particular often requires the client’s involvement.
The key measure of the implementing part is certainly the client due diligence, which attorneys-at-law must perform pursuant to ZPPDFT-1, inter alia prior to entering into a new business relationship with a client and prior to every transaction over EUR 15,000. Client due diligence includes (i) identifying and verifying the identity of the client, (ii) identifying its beneficial owner, (iii) obtaining information about the business relationship or a transaction; and (iv) ongoing monitoring of the client’s activities pursued with the attorney-at-law. In practice, this means that attorneys-at-law must obtain a certain amount of information from the client before even entering into a business relationship or carrying out a transaction. Since some information is usually difficult to obtain, attorneys-at-law will often have to ask the client to complete the due diligence. In certain cases, for example, if a client seeks advice from the attorney-at-law regarding money laundering, the attorney-at-law would have to report this to the competent Office.
Please not that attorneys-at-law are liable under ZPPDFT-1 only in certain cases, e.g. when assisting clients with the purchase or sale of real estate, the transfer of a business share, or the establishment of a new company. In other cases not covered by Article 83 of the ZPPDFT-1 (e.g. employment law advice), attorneys are not required to apply the ZPPDFT-1 provisions.
Author: Martin Pirkovič, Associate
