Anti-Corruption: How the Bar keeps money launderers at bay
As the much anticipated Anti-Corruption Summit kicks off, Melanie Mylvaganam, Policy Analyst at the Bar Council, explains how the Bar guards against money laundering and terrorism financing in the UK.
As the Prime Minister’s Anti-Corruption Summit commences today, professional bodies and those whom they represent will be reflecting on their role in promoting good governance and transparency and how to guard against money laundering and terrorism financing.
The Bar Council has worked with the Bar and the profession’s independent regulator, the BSB, over many years to build comprehensive and effective guidance as well as robust support mechanisms on anti-money laundering (AML) and counter-terrorism financing (CTF). These are updated and reviewed continuously. In addition, because of the way the profession is regulated and the way in which its work is structured, the Bar has a unique, low-risk profile where these threats are concerned.
As specialist advocates, self-employed barristers do not handle client money. This is often required of those lawyers who are engaged in litigation (for example, for the purchase of property or managing an estate in the execution of a will).Barristers, on the other hand, are prohibited from handling client funds by their Code of Conduct. The Bar is therefore not attractive to money launderers and financers of terrorism. Nevertheless, the Bar is not complacent.
Increasingly, barristers are instructed directly by members of the public and some have qualified to undertake litigation work. As a result, safeguards have been developed to allow them to do such work without having to handle client funds. One mechanism to facilitate this is ‘BARCO’. Many ‘direct access’ barristers now use this escrow account service to enable client money to be handled on their behalf. BARCO includes built-in anti-money laundering features such as background checks and software to upload identification documents.
As the representative body for the Bar, the Bar Council regularly updates members with comprehensive guidance about their AML and CTF obligations, in compliance with Financial Action Task Force recommendations. For example, the latest ‘Money Laundering and Terrorist Financing’ guidance, released in January of this year, explains the responsibilities of barristers under the Money Laundering Regulations 2007, the Proceeds of Crime Act 2002, and the Terrorism Act 2000. Bar Council AML training and awareness events are available for all barristers and ongoing training is compulsory for direct access barristers. Members have clear directions which are relevant to their professional practice.
Barristers can also call the Bar Council’s Ethical Enquiries Service for immediate, one-to-one support when they face ethical questions relating to AML or CTF, even if such issues arise in the middle of a complex case. This service is freely available to all Bar Council members and barristers’ clerks.
The Bar Council’s expertise on AML and CTF is derived from expert practitioner input. A dedicated policy analyst works closely with the AML/CTF Working Group of practising barristers. This group regularly updates guidance to the profession, monitors developments in the UK and abroad and responds to these developments on behalf of the Bar.
As the representative body for the Bar, the Bar Council operates independently from the profession’s regulator, the Bar Standards Board. This independence, which is reinforced by safeguards and firewalls, means that law enforcement agencies, consumers and members of the public can be sure that there is no conflict of interest that might undermine AML and CTF supervision. We agree with the recent assessment made by the Treasury, in a consultation on AML supervision, that this arrangement “mitigates the risk of conflict of interest”.