Statement on the Performance of the Verification of the Identity of the client by Attorneys, etc.
As we approach the 4th FATF's (Financial Action Task Force) mutual evaluation on Japan scheduled for 2019, an extraordinary general meeting of the Federation resolved on December 8, 2017 to make compulsory that members submit annual reports for the purpose of accurately grasping the status of the performance of the obligation to verify the identity of the client and to maintain records, etc. by the members and to partially amend the “Rules Concerning Client Identity Verification and Record Preservation, etc.” (the “Rules”). Additionally, in a meeting on December 21, 2017 the Federation’s board of directors passed a resolution to partially amend the “Regulations Concerning Client Identity Verification and Record Preservation, Etc.” (the “Regulations”).
Incidentally, accompany the “40 Recommendations” of FATF, the Act for Prevention of Transfer of Criminal Proceeds (the “Criminal Proceeds Act”) was enacted on March 29 2007 for the purpose of seeking to prevent the transfer of criminal proceeds by companies by taking preventive measures and the measures equivalent to the verification of the identity of the client by the lawyers, legal professional corporations, registered foreign lawyers and registered foreign lawyer corporations (“Attorneys, etc. ”) are governed by provisions in the rules of the Federation in the same manner as other professionals (Article 12 of the Criminal Proceeds Act). The establishment of these provisions with respect to Attorneys, etc. by the Criminal Proceeds Act was due to the Federation's strong objection to the obligation to report the suspicious transactions of clients sought from legal professionals, including Attorneys, etc., by FATF's “40 Recommendations” prior to the enactment of the 2007 Criminal Proceeds Act. In the amendment on this occasion as well, the Federation is unshakeable in maintaining the position it has held up to this point.
On the other hand, naturally, Attorneys, etc. must not in any way assist with money laundering and the Federation, as an organization having a high degree of self-regulation, itself prior to the enactment of the Criminal Proceeds Act obliged members to verify the identity of clients and to maintain records pursuant to the regulations and the rules and these regulations and rules have been amended twice in conformity to the amendments to the Criminal Proceeds Act and the Federation has proactively encouraged members to prevent the transfer of criminal proceeds (President Statement on Amendments to the Act on the Prevention of Transfer of Proceeds from Crimes dated December 20, 2012 and January 22, 2016). The Federation, exerting every effort, will make the new rules and regulations fully known to its members and actively provide them with training so that Attorneys, etc. do not become involved in or be used for money laundering.
December 21, 2017
Japan Federation of Bar Associations