The handling of funds, by legal professionals, belonging to their clients is considered by the “guidance for a risk-based approach” of the FATF as carrying increased risks.
These guidelines identify the following dual difficulty:
- On the one hand, there is the risk of a lawyer being instrumentalised by being solicited for an apparently regular legal operation, which in reality serves as a support for a fraudulent financial flow.
- On the other hand, there is a lack of information sharing between lawyers and the banks with which they deposit their clients' funds in most countries, due to the professional secrecy that lawyers are required to maintain with banks.
As soon as a lawyer receives funds on behalf of his clients, the compulsory intervention of the CARPA makes it possible to prevent and reduce this risk.
The CARPA carries out its controls using the risk-based approach and its transaction analysis resources. In dialogue with the lawyer, it analyses the financial flow ancillary to the legal transaction in which the lawyer is involved and checks its compliance.
While the professional secrecy to which lawyers are strictly bound prohibits them from providing a bank with the information contained in their files, they cannot invoke this secrecy against the CARPA, which carries out its checks under the authority of the President of the Bar. This is what ensures the effectiveness of the system while guaranteeing respect for the professional secrecy owed by lawyers to their clients.
If the CARPA identifies a risk, it triggers the necessary alerts and encourages the lawyer to react himself in application of his anti-money laundering obligations.
For its part, if the conditions are met, the CARPA makes the suspicious transaction report, for which it is responsible in its capacity as a reporting entity (see above).
The intensity of the risk attached to the handling of funds by lawyers on behalf of their clients is thus greatly reduced because the CARPA intervenes precisely to control this risk. Its controls and the means it uses to carry them out secure the handling of funds.
In this respect, the FATF assessment report on France (May 2022) notes that "the fact that CARPAs have been subject to AML/FT obligations since 2020 has made it possible to strengthen identification measures and mitigate the most significant risks for the profession" (paragraph 138, p. 54).