The Financial Action Task Force (FATF) is an inter-governmental body based in Paris that develops and promotes policies, both at national and international levels, to combat money laundering and terrorist financing.  It was established by the G-7 summit in Paris in 1989. It currently has 34 governments as members, including the UK, the European Commission and many individual EU countries.

Its principal influence has been through its 40 Recommendations. Initially developed in 1990, the Recommendations were revised in 1996 and then again in 2003. It is these Recommendations that have formed the basis of the anti-money laundering legislation in Europe, which eventually became the national laws on lawyer reporting that we know so well.

Why is it that only European governments have taken the Recommendations so literally to heart in relation to lawyer reporting, when important jurisdictions, such as the USA and Japan (both FATF members), have no lawyer reporting legislation? Answer: the other governments either understand, or have been forced to understand, the importance of lawyer-client confidentiality.

The FATF has continued to review its Recommendations. A year ago, the FATF issued guidance on a risk-based approach for legal professionals. Lawyers pushed hard to have separate guidance for the legal profession – so as not to be lumped in with groups like casinos and real estate agents – and the FATF agreed. At the moment, too, there is an ongoing review on Recommendation 9 regarding where ultimate responsibility lies, including for lawyers, for customer due diligence undertaken by third parties. To its credit, the FATF has again consulted with representatives of the legal profession, in particular, the International Bar Association (IBA), the Council of Bars and Law Societies of Europe (CCBE) and the American Bar Association (ABA).

This dialogue between lawyers and the FATF is hardly known about and rarely discussed. The FATF is itself hardly known about and rarely discussed. And yet I think that organisations like the FATF should be much more in the public spotlight.