Article on Client Due Diligence

Kevin L. Shepherd (Venable LLP) recently published anarticle entitled, Ethically Speaking . .. – Just What Are My Obligations Under the Gatekeeper Initiative?, 27 Prob.& Prop. 43 (September/October 2013). Provided below is the introduction to his article:

Client due diligence is not a novel concept.  Referred to as “CDD,” most lawyers undertakeCDD to confirm clients’ ability to pay fees charged by their lawyers and todetermine the absence of ethical conflicts of interest.  But should lawyers undertake or, moreprecisely, must lawyers be requiredto undertake a risk-based analysis to determine whether their clients present arisk of money laundering or terrorist financing?

This is not an academic question.  On May 23, 2013, the ABA Standing Committeeon Ethics and Professional Responsibility (“ABA Ethics Committee”) issued aformal opinion discussing a lawyer’s ethical obligations to fight moneylaundering and terrorist financing, including the interaction of the ModelRules of Professional Conduct (“Model Rules”) and the ABA’s Voluntary GoodPractices Guidance to Detect and Combat Money Laundering and TerroristFinancing (“Good Practices Guidance”). This article will discuss the domestic and international backstory thatgave rise to the opinion, analyze the opinion, and suggest how practitionerscan heed the important advice given in the opinion.