Lawyers Warned Not to Help Break Law in Wake of Tax Scandals
Lawyers Warned Not to Help Break Law in Wake of Tax Scandals
(Bloomberg) -- It may sound obvious, but the Organization for Economic Cooperation and Development said lawyers may need some basic advice in the wake of tax scandals triggered by the Panama Papers.
Don’t 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 Monday, which was co-authored with the International Bar Association. While everyone has the right to legal advice, it said, lawyers should sometimes think about ending relationships with clients.
Lawyers “are normally reluctant to drop clients,” but if they believe a client’s acting illegally and hasn’t changed their behavior after being warned about it, they should consider doing so, Claudio Visco, one of the report’s authors, said by phone.
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 now 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 doesn’t 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.”
The report comes as prosecutors take action related to the Panama Papers leak. Last week a probe into Deutsche Bank AG, prompted by the leak, brought a wave of raids by Frankfurt prosecutors targeting eight wealthy individuals who may have hidden money in offshore companies.
To contact the reporter on this story: Kaye Wiggins in London at kwiggins4@bloomberg.net
To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser
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