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Advice for Barristers | Covid-19: Anti Money Laundering Compliance & Handling Client Money

Anti Money Laundering Compliance 

Barristers should be aware that criminals will look to take advantage of the Covid-19 outbreak.  This includes laundering the proceeds of crime and terrorist financing, so it is important that barristers continue to follow a risk-based approach and diligently adhere to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended).

The Bar Standards Board has worked together with the Legal Sector Affinity Group to publish joint guidance to manage risks arising from the Covid-19 pandemic.  In view of the fact that it may no longer be possible to carry out identification and verification (ID&V) on the premises of the legal practice, barristers may consider using the following methods as an alternative (independently or in combination):

  • Digital ID&V services that meet the requirements of the MLRs “secure from fraud and misuse and capable of providing an appropriate level of assurance that the person claiming a particular identity is in fact the person with that identity.” (R28(19)
  • Gathering and analysing additional data to triangulate the evidence provided by the client, such as geolocation, IP addresses, verifiable phone numbers etc.;
  • Verifying phone numbers, e-mails and/or physical addresses by sending codes to the client’s address to validate access to accounts; and
  • Using live and/or recorded digital video (many reliable and free options exist for this) of the customer showing their face and original photo identification documents so that you can compare them to a scanned copy of the same document (e.g. passport or driving license).

Barristers should consider whether policies, controls and procedures remain appropriate and whether they need adjustment to reflect the above.

For further information on the challenges currently facing legal practitioners, see https://www.barstandardsboard.org.uk/uploads/assets/49645986-a642-4248-a27e02bbdc2cc819/20200414-LSAG-Covid-19-AML-guidance.pdf

Handling Client Money

Barristers are reminded of the prohibition on handling client money, and specifically to familiarise themselves with rC73 and g103-gC112 of the BSB Handbook. 

gC07 of the Handbook states that a fixed fee paid in advance is not client money for the purposes of rC73, and therefore the sum received by you, becomes your money.  Accordingly, if a public access barrister is paid a fee in advance of a hearing that has been cancelled, they are able to pay that sum back to the client, without breaching the prohibition in rC73.  Depending on the terms of the client care letter and/or the agreement of the client, barristers may retain the fee pending the relisting of the hearing.

The Bar Council advises that the situation is likely to be different if a barrister acts in bad faith, for example if they accept a fee already knowing that the hearing was not going ahead, or artificially inflated the fee in order to get the benefit of holding the funds in their account even for a temporary period.

Advice for Barristers 

In response to the outbreak of COVID-19, and consequent uncertainty faced by barristers, the Bar Council have provided information/guidance, including the following:

  • Good practice regarding videoconferencing software, and the data protection and confidentiality issues involved

https://www.barcouncilethics.co.uk/wp-content/uploads/2020/04/Video-conferencing-and-data-protection-FINAL.pdf

  • Data protection and security when working from home

https://www.barcouncilethics.co.uk/wp-content/uploads/2020/03/Data-protection-and-security-when-working-from-home.pdf

  • How the Inn libraries can help

https://www.barcouncil.org.uk/uploads/assets/8d4bdef8-a34f-497c/0670c257-f61c-47a1-b32c166a6ecbe83c/Inns-of-Court-library-resources.pdf

  • Meeting CPD requirements during the current period

https://www.barstandardsboard.org.uk/for-barristers/cpd/covid-19-and-cpd-faqs.html

  • Paying the BMIF premium

https://www.barmutual.co.uk/about-bar-mutual/covid-19/

  • Financial support measures – CPS announcement on fees/faster payments

https://www.barcouncil.org.uk/uploads/assets/9e33756d-b75e-4a01-89a6f31575633e80/CPS-CEO-fee-payments-statement-3003.pdf

Barristers can also email the Bar Council, LPMA and IBC Working Group at C19WG@BarCouncil.org.uk to raise an issue regarding COVID-19 and the Bar.

See our next Public Access course here 

5th May 2020

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