Sample Essey

Money laundering law curving inroads in legal confidentiality: The article shall examine how the perception of legal confidentiality has gradually changed from the common law position laid down in the case Seager v Copydex Ltd. The discussion proceeds to demonstrate earlier judicial and legislative efforts to regulate the professional confidentiality of other fiduciary relationships. Secondly an account shall be given as why the legal services are been red flagged as potentially exposed to processes and offences of money laundering. Of which, the discussion explores the justifications for regulating legal confidentiality through codifying procedures for statutory disclosures. Thirdly the essay goes further to examining how launderers used and may still use legal confidentiality as a vehicle for concealing money laundering processes of [placement, layering and integration] thus comfortably transferring and converting the untraceably dirty proceeds. Finally critics, challenges and relevant human rights arguments are highlighted but not upheld. Therefore by the end of the discussion, this essay should illustrate that, much as confidential privilege is of substantial importance, it poses concerns of ethical nature as well as state security. Therefore the essay seeks to clarify that, the seriousness of problems from ill-gotten proceeds is high enough to be outweighed by legal confidentiality. Further still an explanation is done on the influence of international and regional legislations on the understanding of confidentiality privileges within this area of law. First and foremost, the basic aspects to be explored hereunder shall include; legal confidentiality on one hand and money laundering on the other. The Black's law dictionary defines legal confidentiality as communication made in trust and not intended for public disclosure, money laundering on the other hand is the act of transferring illegally obtained money through legitimate people or accounts so that its original source cannot be traced. Even though the Osborn's dictionary lacks definition a definition of money laundering it at least stresses that, the mere fact information is confidential does not make it inadmissible for criminal evidence unless it falls within the scope of evidentiary legal privileges, a view perfectly coinciding with observations of Lord Taylor in case below. The above views underscore the centrality of common law rules to professional confidentiality. It is imperative to emphasise that rules relating to confidential of communications between the lawyer and his [her] client were deeply rooted within the English legal system from time immemorial as seen in Berd V Lovelace and Chant v Brown. The rationale of fiduciary traditions underlying this concept of legal confidentiality was to establish a secure working environment that would enable clients to freely and confidently confide in their legal representatives. It is thus unsurprising that overtime judicial precedents appreciated, supported and maintained the above concept as stressed by Lord Taylor of Gosforth in R V Derby Magistrate court, Expert B: "The principle which runs through these cases and many other cases which were cited is that fact a man must be able to consult his lawyer in confidence, otherwise he might hold back the half the truth. The client must be sure that what he tells his lawyer shall never be revelled without his consent. Legal professional privilege is thus more than an ordinary rule of evidence, limited in its application to the fact of a particular case. It is a fundamental condition on which the administration of justice as a whole rests. But much as common law acknowledged confidential privileges, it admittedly cited dangers associated with fiduciary relationships as banking-client as noted in the Tourneur case. Having mentioned that, the legal professional is not far from these dangers as red flagged to be potential pipeline for enhancing money laundering processes. And yet at the heart of this professional rest the concept of legal confidentiality. In this respect reforms on legal privilege imply is no longer absolute. This implies legal professional are expected to disclose any information that comes to their knowledge or would ordinarily have come to their awareness as long as such information relates to money laundering or terrorism offences as decided in R v Guidhall Magistrates Court. Legal framework on money laundering: The thick layers of money laundering laws imposing reporting duties as opposed to legal confidentiality range from international, regional to national frameworks. The duties are derived from the United Nations Conventions, European Union Directive that gave way to the 1993 and finally amended into the 2007 Regulations of UK. In essence professionals have disclosure and reporting duties codified within several money laundering legislations, among these include; Proceeds of Crime Act, the Bribery Act , SOCA Act, and Terrorist Act under UK money laundering regime. Therefore legal professionals report to the National Intelligence Criminal Service (NICS) or the Serious Organised Crime (SOCA) including clients suspected of offences subject to disclosures terrorism. In USA money laundering under Patriotic Act is a federal offence, while the CISPA bill seeks more room for institutional disclosures. This demonstrates how the seriousness of money laundering ought not to be comprised for the sake of confidential privileges. Disclosure and reporting duties on legal advisors: In the same manner under the PCA disregards the veil of legal confidentiality in cases where the legal advisor as an employee in the regulated sector either knows suspects another person of the committing for money laundering offence but fails to take the necessary measure of disclosure within the shortest time possible. Another imperatively related situation is where legal advisor knowingly or would reasonably have known as to how their services would facilitate money laundering transactions, more than that the Act tries to clarify the seemingly controversial and probably misunderstood connection between cases of authorized disclosure one hand and legal confidentiality on the other. Besides the seemingly strict reporting regimes, it would be misguiding to create an impression the money laundering laws have discredited the notion of legal privilege. In other wards the Act leaves room for legal privilege as long as it relates to commutations required for commencement of legal proceedings. This was stressed in per incuruim in Bowman v Fels ",,, Sec. 328 is to be interpreted as including legal proceedings within its purview, it cannot be interpreted as meaning either that legal professional privilege is to be overridden..." More still reforms by money laundering regimes have impacted numerous aspects of confidentiality this therefore leaves several implications to individual players at national and international level. Among the principle players include; AML (Anti money laundering enforcement agencies), legal advisors and money launderers. Even though disclosure provisions might be described as curving inroads through the concept of legal privilege, money launderers are wealthy and tactical criminals. The wealthy status accounts for the influence launderer might have on the legal professional. But wealthy status must be unsurprising since their efforts seem enormously rewarding. A typical example is Regina v Mohammed Aziem Ayub and others, a case in which one single heroin trail worth of (200,000, 50,000 and 150,000) £ was confiscated from in Birmingham, Luton and Reading respectively. The criminal property was confiscated before successfully sales while still in the triangular trail cross the intended cities respectively. Therefore wealth from dirty cash might become a leeway to control desperate members of the legal professionals. It is also true that legal profession also relies on electronically generated or authentically documents, while launderer might also use secretly generated electronic codes methods to create a veil of documentary legitimacy. As 1999 United Nations development report noted; "Globalisation opens many opportunities for crime, and crime is rapidly becoming global, outpacing international cooperation to fight it." It therefore follows that unlike the above case, multinational dealers transact their criminal property in NCCTS as seen in Serious Organised Crime Agency v Perry. And eventually transfer their hard earned gains to more reputable economies for safer custody of their criminal proceeds. But right at the heart of such trusted jurisdictions are law firms that have been cited as pipelines in aiding efforts of dirty dealers. "Indeed, it has been said that London`s good reputation makes it a perfect place to "wash" dirty money. What is more, according to NCIS, some firms of solicitors have become prominent in the money laundering process." In the above case, it becomes crystal clear as to why international efforts to control money laundering considering the imposing of more forceful controls on the professionals. It is arguably true modifications, qualifications and alteration to the concept of legal confidentiality. Therefore narrowing the scope of legal privilege is one among the national and international developments in this area. Accordingly the above state of affairs continues make the client confidence highly questionable. Does the municipal disclosure do much in presence of mutual legal assistance for disclosure? Following the observation by Bassinouni and Guatiera, "National mechanisms to control money laundering are beginning to focus on professionals such as lawyers." But since money launderers are fast thinkers but at the same time transitional dealers, a question then arises as to whether countries have the same level of strictness for disclosure obligations by regulating confidentiality? If yes, then disclosure duties would globally deter money launderers from veiling behind legal confidentiality to shield their proceeds. This demonstrates centrality of statutory professional disclosure as a key measure commendable if mutual assistance is to be attainable from all jurisdictions. While some countries in Europe had by 1995 had already incorporated reforms on how professionals must respond to money laundering, in Africa most countries had not yet embarked on this struggle. It is arguably true that such countries might be naive to fully apply similar laws to their respective legal sectors. In Ugandan for example money laundering laws were never in force until 2010 which would sound a reckoned achievement, but to make matters worse it is silent with respect to who has investigative powers and how these must be exercised with regards to legal professionals. It is inclined to regulating financial sector than the legal professionals yet are cornerstone of money laundering. Nonetheless Uganda participates in transnational trade. Although the positions in several other countries like Indonesia is not that much different from that of Uganda. Therefore a problem remains that all countries have adopted the varying levels of strictness in regulating legal confidentiality shall be raised. Consequently weaken the efficiency of mutual legal assistance of course mindful of how money launders spend a great deal of time cleaning ill-gotten gains through multinational firms and international trade based laundering. Indeed they globally powerful and internationally tactical to be outwitted by tougher disclosure regimes within Europe or USA alone. Despite the above developments, secrecy continues to a central position in the business of money laundering. And practically the only trusted members of the trail are likely to be informed of dirty deals especially while in risky stages as illustrated in Regina v Mohammed Aziem Ayub and 2 others. As Arlacchi whose examines the public nature of traqueto's secrets mentions, "A high degree of secrecy must be established. Operational secrecy is a crucial element in drug trafficking." The above assertion seems viable in view of studies depicting the secretive trends of drug traffickers. A wide range of illustrations are drawn from Columbian Cartels, Russian Mafias, and Mexican Cartels among many others. The secrecy of remittance systems and the disclosure discourse: Equally important is how suspicion the basis for disclosure becomes constrained if secrecy is contextualise amid the emergence of Alternative Remittance Systems [ARS]. Such methods have not only increased secrecy but have furthered exclusive control of the already global nature of the on-going cross-border trail. Mindful of how disassociation excludes enemies of launders such as regulated sectors such as banks out of the game. More so would issue statements useful for verification of details relating to client identity. But the increasing association of launderers with unregulated might leave legal personnel with limited sources of reliable knowledge upon which the basis of their suspicion could be verified, unless family secrets have leaked to lawyers as seen in P v P and R. v Central Criminal Court Ex p. Francis & Francis.

Rationale for reforming legal confidentiality: Besides the secretive tends, in accidental cases business secrets are knowingly or unknowingly disclosed to legal practitioners (like in cases of marriage petitions P v P or buying family property as seen in R. v Central Criminal Court Ex p. Francis & Francis. ) Of which if disclosure is dispensed with, in preference for undertaking legal arrangements, legitimate ownership is attained and a veil of legal cleanliness is sealed. Related the above is the nomination of internal Money Laundering Officers [MLO] as risk measure for solicitors firms: The reliance on information mentioned in earlier is of great importance especially where commercial law firms have opted to appoint internal money laundering officers (MLO). The internal reporting take risk based assessment approach. But equally important, it ensures compliance with money laundering laws while limiting unnecessary disclosures to external bodies like (NICS) National Criminal Intelligence Services or Serious Organised Crime Agency (SOCA). Since on one hand unjustifiable disclosure might be actionable in law, but on the other hand non-disclosure might result into conspiracy and professional related non-disclosure offences.