Rule 63 Rules of Professional Conduct for Legal Practitioners

Rule 63 of the Rules of Professional Conduct for Legal Practitioners (RPC) 2023 is about Country geographic 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) A legal practitioner or law firm, involved in cross-border transactions shall carry out proper risk assessment in respect of the geographic or country risks involved, or likely to be involved in such transactions.

(2) Geographic risks of ML and TF may arise in a variety of circumstances, ranging from the domicile of the client, the location of the transaction or the source of the wealth or funds.

(3) Factors that are generally agreed to place a country in a higher risk category include —
(a) countries identified by credible sources as providing funding or support for terrorist activities or that have designated terrorist organizations operating within them ;
(b) countries identified by credible sources as having significant levels of organized crime, corruption, or other criminal activity, including source or transit countries for illegal drugs, human trafficking, smuggling and illegal gambling ;

(c) countries subject to sanctions, embargoes or similar measures issued by international organizations ; and
(d) countries identified by credible sources as having weak governance, law enforcement, and regulatory regimes, including countries identified that have weak Anti-money laundering (AML) and Countering the financing of
terrorism (CFT) regimes, and for which financial and non-financial institutions alike should give special attention to business relationships and transactions.

(4) A Legal practitioner shall be deemed to have satisfied the obligation to assess the country or geographic risk if he shows by any compliance document his review and understanding of such risk in the engagement with the client.