It might sound obvious, but the Organisation for Economic Co-operation and Development (OECD) yesterday said that lawyers might need some basic advice in the wake of tax scandals triggered by the Panama Papers: Do not help your clients break the law.
Attorneys who set up companies and run internal investigations for clients “may be unwittingly associated with illegal conduct, including financial crimes,” the OECD said in a report, which was coauthored with the International Bar Association.
While everyone has the right to legal advice, lawyers should sometimes think about ending relationships with clients, it said.
Lawyers “are normally reluctant to drop clients,” but if they believe a client is acting illegally and has not changed their behavior after being warned about it, they should consider doing so, Claudio Visco, one of the report’s authors, said by telephone.
The so-called Panama Papers leak in 2016 led to the release of millions of documents that showed how the Panamanian law firm Mossack Fonseca & Co created thousands of shell companies that were used to hide wealth.
The OECD said the report “shone a spotlight” on lawyers’ role.
People are wondering whether attorneys are taking responsibility “for their role in the funding of corruption, terrorism, arms trafficking, mass drug addiction and other illegal conduct financed by the transfer of illicit funds,” it said.
The advice about dropping clients does not apply to criminal defense lawyers, whose job is to represent people accused of crimes, Visco said.
Instead it applies “at an early stage when the crime has not yet been committed and the lawyer has reasonable grounds to believe that the activities could lead to the commission of a crime,” Vicso added.
The report came as prosecutors take action related to the Panama Papers leak.
Last week, a probe into Deutsche Bank, prompted by the leak, brought a wave of raids by Frankfurt prosecutors targeting eight wealthy individuals who might have hidden money in offshore companies.
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