The effort is led by the International Bar Association and the Organisation for Economic Co-operation and Development
The joint effort will develop professional conduct standards and practice guidance for lawyers involved in establishing and advising on international commercial structures and recommended actions for governments.
The formation of the task force follows the London Anti-Corruption Summit which took place in May 2016 and the existing OECD-IBA Memorandum of Understanding. Under te memorandum, the parties agreed to work together on a number of areas including corporate social responsibility, competition, trade and investment, taxation, financial services and migration.
Called the OECD-IBA Task Force on The Role of Lawyers and International Commercial Structures, the effort aims to takle the possibility that lawyers may be unwittingly helping clients in asset concealment or money laundering as demonstrated by the release of the Panama Papers earlier this year.
“It is undeniable that lawyers must play a central role in complex offshore financial transactions. To ensure that they do not unwittingly facilitate economic crime, it is imperative that lawyers ask the right questions of their clients, vet them sufficiently, understand who are to be the ultimate beneficiaries of their client’s actions, and have an understanding of sovereign laws,” said David Rikin.
“In practice, inevitably complications arise. For example, what are a law firm’s obligations when conflicting sovereign laws apply in cross-border transactions? Recent events have shown that existing international and professional standards may not provide sufficiently clear guidance to lawyers who handle such transactions. Recent actions also present the danger that in their anti-corruption activities, governments may ignore the need for lawyers to advise their clients in confidence,” the IBA president added.
“For this reason the IBA has partnered with the foremost inter-governmental organisation analysing and promoting economic policies, the OECD, to create appropriate standards while, at the same time, respect the fundamental rules applicable to the profession that are a key element of the rule of law. Each organisation will bring its relevant expertise to the project.”
Meanwhile, Nicola Bonucci, OECD Director for Legal Affairs commented: “Lawyers play a key role in our societies and the best way to ensure that they can continue to fulfil such a role is to work together on the design of good professional standards which can be used by all lawyers irrespective of their countries of origin or operation. Mere formal respect of the law is a necessary but not always sufficient condition and experts from the OECD and from the IBA will confront their point of view and work together in order to ensure that these professional standards meet the expectations of the various stakeholders. This pioneering work will not substitute or conflict with existing international and national requirements and will complement other ongoing OECD work on the role of tax intermediaries.”
Bonucci and Rivkin’s successor Martin Šolc, who begins a two-year tenure as President of the IBA on 1 January 2017, will lead the task force.