27 February 2020

Attorney as an entity of financial monitoring: what we need to know

Within two months, on April 28, 2020, Law No. 361-IX on the Prevention and Counteraction of the Legalization (Laundering) of Income, which, among other things, affected the relationship between the attorney and his client, will come into force. What should defenders keep in mind?

Law firms and attorneys who practice law on an individual basis are part of the financial monitoring system, which consists of primary and state levels. Law firms and attorneys are now designated entities of primary financial monitoring.

The primary financial monitoring entity has a wide range of responsibilities. Some of them are the following:

– to carry out thorough examination of clients (new and existing);

– to monitor the financial transactions of the client (including those performed in the interests of the client);

– to provide detection of financial transactions subject to financial monitoring, including those which were associated with the use of automation systems.

The analysis of such responsibilities indicates the imposition of additional bureaucratic burdens on attorneys, and, in fact, complicates the development of a trusting relationship between the client and the attorney, especially if the legislator tries to place some suspicion on them.

For details on all current issues of Law 361-IX “On Prevention and Counteraction to Legalization (Laundering) of IncomeObtained by Criminal Means, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction”, read “Attorney – The Entity of Initial Financial Monitoring“.  The article was prepared by Olexandr Drozdov, the Member of the Legal Reform Commission under President, and Olena Drozdova, the Director of Drozdova & Partners Law Fim, for “Zakon i Biznes”.