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The following excerpt is taken from The Intangible Assets Handbook by Weston Anson, Copyright 2007 by the ABA Section of Business Law. Reprinted here with permission. The material contained herein represents the
opinions of the authors and editors and should not be construed to be the action of either the
American Bar Association or the Section of Business Law unless adopted pursuant to the bylaws of
the Association. Nothing contained herein is to be considered as the rendering of legal advice for
specific cases, and readers are responsible for obtaining such advice from their own legal counsel.
To request reprint permission, contact the Manager, Copyrights and Licensing, at (312) 988-6102.
For the complete excerpt, click here
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Message from the Chair, Linda Hayman
In the coming months, you will be hearing more about the Section's efforts
to support and develop "best practices" to help attorneys
identify international money laundering and to avoid situations in which
business lawyers might be used to facilitate such activities. This column
is one of those efforts. We believe that it is important that business
lawyers voluntarily adopt such "best practices" for the simple
reason that the alternative may be legislation requiring lawyers to engage
in anti-money laundering reporting that would have a very negative effect
on the attorney-client relationship.
The ABA Task Force on Gatekeeper Regulation and the Profession
(created in 2002 by then ABA President Robert
E. Hirshon) has opposed laws and regulations requiring lawyers to file
suspicious-transaction reports on their client's activities. To the extent
business lawyers are asked to secretly report on the activities of their
clients, there is an adverse impact on the attorney-client relationship,
the independence of the bar, and the attorney-client privilege. However,
the ABA's "Gatekeeper" Task Force has consistently supported the
concept of offering education to assist lawyers who receive and transfer
client funds and who assist clients with transactions to identify
potential money laundering schemes. Marty Lybecker, the former Chair of
our Section's Committee on Banking law is a member of the ABA
"Gatekeeper" Task Force and has been helping our Section do its
part to educate our own members. Since 2002, for example, the Section's
Committees have sponsored and co-sponsored a number of anti-money
laundering programs.
The term "Gatekeeper Initiative" originates from the Moscow
Communiqué issued at the 1999 meeting of the G-8 Finance Ministers that
called upon countries to consider various means to address money laundering
through the efforts of professional gatekeepers of the international
financial system. The targeted "gatekeepers" included lawyers.
Following the Moscow Communiqué in 1999, the Financial Action Task Force
("FATF"), an intergovernmental body of 29 countries and two
international organizations, specifically targeted lawyers as well as
several other professions as "gatekeepers" with respect to money
laundering. In 2002, FATF published a consultation paper entitled
"Review of the FATF 40 Recommendations" in which
the FATF identified several areas where possible changes could be made to
the anti-money laundering framework. The broad topics covered customer due
diligence and suspicious transaction reporting, beneficial ownership and
control of corporate vehicles, and the application of anti-money laundering
obligations (including filing Suspicious Transaction Reports) to
non-financial businesses and professions, including the legal
profession.
On the international level, Canadian, Japanese, French, Polish, and Belgian
Bars have challenged attempts by their governments to impose anti-money
laundering responsibilities on the lawyers practicing law in those
countries.
In the United States, the Money Laundering and Financial Crime Strategy Act
of 1998 requires the Justice and Treasury Departments to issue an annual
"National Money Laundering Strategy Report," outlining a plan of
action to enhance U.S. anti-money laundering efforts. The report for 2000
tasked the U.S. Department of Justice with reviewing the professional
responsibilities of lawyers and making recommendations "ranging from
enhanced professional education, standards, or rules, or legislation, as
may be needed." A similar theme was set forth in the report for 2001.
The inter-agency working group charged with developing a U.S. position
included the U.S. Department of Justice, the U.S. Department of the Treasury, the
U.S. Securities and Exchange Commission, and the Financial Crimes
Enforcement Network ("FinCEN"), a division of the U.S. Department of the Treasury.
After it was formed in 2002, members of the ABA "Gatekeeper" Task
Force met with representatives of the Departments of Justice and Treasury
on several occasions, and subsequently prepared and filed
a report with
FATF in which it argued among other things that, in lieu of imposing anti-money
laundering reporting on lawyers in situations that would adversely
affect the attorney-client privilege and the duty of client
confidentiality, the ABA could address the concerns underlying FATF's
"Gatekeeper Initiative" by engaging in extensive continuing legal
education about anti-money laundering for its members.
It is expected that FATF is likely to reach out again to the legal
profession in summer 2007. The ABA "Gatekeeper" Task Force
believes that our government would be well-served if the ABA could develop
some form of anti-money laundering and terrorist financing "best
practice" standards for U.S. lawyers, primarily focusing on client due
diligence. In June 2008, the U.S. Government must report to FATF with
respect to the progress that it is making in meeting the international
anti-money laundering standards recommended by FATF, and it would be
helpful if it could report that the ABA has taken significant steps to
address some aspects of the FATF Gatekeeper recommendations through
voluntary efforts. To that end, the Section's leadership has asked the
Committees on Banking Law chaired by Jim Scott,
Consumer
Financial Services chaired by Don Lampe, and Federal
Regulation of Securities chaired by Keith Higgins, whose
members are most likely to be involved in the kind of transactions to which
anti-money laundering responsibilities would attach, to make special
efforts to include education on anti-money laundering "best
practices" to encourage the highest level of voluntary due diligence
on clients and prospective clients. This is an important effort by the
Section to do its part in the international efforts to combat money
laundering.
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Linda Hayman
Chair, Section of Business Law
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Discovery is conducted by the trial judge in civil law countries and
"private" evidence-taking by the litigants is not permitted.
Furthermore, discovery in most foreign countries is much more limited than
in the United States.
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The SEC's recent interim final rules on executive compensation disclosure
are intended to give investors a better picture of the compensation of
executives and directors.
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John White, the Director of the SEC's Division of Corporate Finance,
discusses internal control over financial reporting, proxy access, PIPEs,
executive compensation, restatements, private offering reform,
international financial reporting standards, foreign private issuer
deregistration and other topics.
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Many more tender offers have occurred in the wake of the SEC's amendments
to the tender offer best-price rule and more are on the
way.
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Catch up on the latest developments in banking law.
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Presented by the Committee on Banking Law at the 2007 Spring Meeting - March 15-18, 2007.
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The Supreme Court has four antitrust cases in its 2006-2007 term—an
unusually high number. Learn about these important cases.
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Presented by the Committee on Antitrust Law at the 2007 Spring Meeting - March 15-18, 2007.
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In February 2007, Chancellor Chandler declined to dismiss two complaints
that allege inappropriate manipulation of options.
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From 1996 to 2002, the New York Stock Exchange averaged 51 international
listings per year. From 2003 to 2006, that average declined to 21. In
2006, only two of the world's 25 largest IPOs chose to register and list in
the United States—and both were for United States companies.
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Committee Spotlight
To learn more about or join the committees that contributed to this month's practice points, just click on the committee name below.
Section members are eligible to join the Section's committees at no
additional cost. Become involved or simply stay in the information
flow. It's FREE!
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The goal of the Program is to increase the participation
of young lawyers in Section activities. The Section is committed to
investing dollars in young lawyers who are expected to participate actively
in the substantive work of the Section and to grow into future leadership
positions within the Section. The Program is designed not only to develop
future leaders of the Section but also to enhance the image of the Section
among members of the YLD in order to attract young lawyers into Section
membership. The Section will select five Fellows and will fund their
expenses to participate in Section activities for two years. Applications
are due July 6, 2007. For more information about the program, click here.
The goal of the Program is to increase the
participation of lawyers of color in Section activities. The Section is
committed to investing dollars in lawyers of color who are expected to
participate actively in the substantive work of the Section and to grow
into future leadership positions within the Section. The Program is
designed not only to develop future leaders of the Section but also to
enhance the image of the Section among members of the national minority bar
organizations in order to attract lawyers of color into Section membership.
The Section will select five Ambassadors and will fund their expenses to
participate in Section activities for two years. Applications are due July
6, 2007. For more information about the program, click here.
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