Rule 65 Rules of Professional Conduct for Legal Practitioners

Rule 65 of the Rules of Professional Conduct for Legal Practitioners (RPC) 2023 is about Transaction or service risk. It is under Part III (Risk Based Approach and Client Due Diligence) of Chapter 2 (Guidelines and Rules on Anti-money Laundering and Combating Financing of Terrorism for Legal Practitioners) of the Rules. It provides as follows:

(1) An overall risk assessment of a client should include determining the potential risks presented by the services offered by a law firm or legal practitioner.

(2) In determining the risks associated with the provision of services related to specified activities, consideration shall be given to factors such as —
(a) services that allow clients to deposit or transfer funds through the law firm or legal practitioner’s trust account that are not tied to a transaction for which the law firm or legal practitioner is performing or carrying out ;
(b) services where legal practitioners or law firms are effectively acting as financial intermediaries which involves the receipt and transmission of funds through accounts, they control in the act of facilitating a business transaction ;

(c) services where the client may request financial transactions to occur outside of the legal practitioner’s trust account (the account held by the legal professional for the client) or through the firms general account or a personal or business account held by the legal practitioner himself :
(d) services where legal practitioners may in practice represent or assure the client’s standing, reputation, and credibility to third parties, without a commensurate knowledge of the client’s affairs ;

(e) services that improperly conceal beneficial ownership from competent authorities, or that have the effect of improperly concealing beneficial ownership ;
(f) transfer of real estate or other high value goods or assets between parties in a period that is unusually short for similar transactions with no apparent legal, tax, business, economic or other legitimate reason ;

(g) payments received from un-associated or unknown third parties and payments in cash where this would not be a typical method of payment ;
(h) services that deliberately have been provided or depend upon more anonymity in the client identity or participants than is normal under the circumstances and experience of the legal practitioner ;
(i) use of virtual assets and other anonymous means of payment and wealth transfer within the transaction without apparent legal, tax, business, economic or other legitimate reason ;
(j) transactions using unusual means of payment such as precious metals or stones ;

(k) contributions or transfers of goods that are inherently difficult to value, such as jewels, precious stones, objects of art or antiques, virtual assets, where this is not common for the type of client or transaction, without any appropriate explanation ;
(l) successive capital or other contributions in a short period of time to the same entity with no apparent legal, tax, business, economic or other legitimate reason ; or
(m) acquisitions of businesses in liquidation with no apparent legal, tax, business, economic or other legitimate reason.

(3) A Legal practitioner shall be deemed to have satisfied the obligation to assess transaction or service risk if he shows by any compliance document, his or her review and understanding of such risk in the engagement with the client and provides in an affidavit on oath from the client, facts attesting to the genuineness of the transaction, source of funds and other relevant information relevant to the risk assessment outcomes.