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Lawyers Must Be Vigilant Against Money Laundering and Terrorism Financing
As lawyers, we play a crucial role in preventing money laundering and terrorism financing. The Financial Intelligence Unit (FIU) has issued guidelines to ensure our profession complies with the requirements of the Anti-Money Laundering and Countering Financing of Terrorism Act 2015.
Red Flags to Watch Out For
We must be aware of certain activities or transactions that may indicate money laundering or terrorism financing. These include:
- Third-party funding without a legitimate explanation
- Transactions involving high-risk countries or entities
- Unusual or suspicious activity from clients or intending clients
- Multiple bank accounts or foreign accounts without good reason
Due Diligence is Key
To prevent money laundering and terrorism financing, we must conduct thorough due diligence on our clients. This includes:
- Verifying their identity
- Checking for any adverse information
- Monitoring their transactions
Record Keeping and Reporting
We are required to keep records of our client due diligence and transactional information for at least six years from the date of the transaction or the end of an ongoing business relationship. We must also report suspicious activity to the FIU.
Penalties for Non-Compliance
Failure to comply with the requirements of the Act may result in legal proceedings, including prosecution, which can attract penalties of up to $250,000 or imprisonment of up to five years for individuals, or penalties of up to $1,000,000 for bodies corporate.
Contact Information
For further information on our obligations under the Act, or the FIU and its activities, contact the FIU Office on (682) 29182 or email: intel@cifiu.gov.ck.
Additional Resources
The FATF Report on Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals provides valuable guidance for lawyers. Additionally, the United Kingdom Law Society and the International Bar Association have published reports and guides to help us detect and prevent money laundering.