Singapore: Guidance Notes on Money Laundering for Solicitors
| Date | 01 February 1999 |
| Pages | 372-374 |
| DOI | https://doi.org/10.1108/eb027204 |
| Published date | 01 February 1999 |
| Author | Tan Sin Liang |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control — Vol. 2 No. 4
Singapore: Guidance Notes on Money Laundering
for Solicitors
Tan Sin Liang
On 30th September, 1998 the Law Society of
Singapore issued its first guidance notes on money
laundering for its members (Guidance Notes). This
article attempts to highlight some legal implications
of the Guidance Notes for a solicitor and his client
in Singapore.
The objective of the Guidance Notes is to enhance
the awareness of solicitors on the legal implication of
the money-laundering law under the Drug Traffick-
ing (Confiscation of Benefits) Act Cap. 84A (DTA).
Since money laundering is a relatively new criminal
offence in Singapore,1 the Guidance Notes should
be welcomed. However, it is not clear why the
Law Society has taken five years to issue the Guidance
Notes.2 The Guidance Notes serve as the minimum
good practices for solicitors in Singapore. A solicitor
who ignores the Guidance Notes may be negligent
and may not avail himself of certain defences under
the DTA.3
The key features of the Guidance Notes4 include
the following:
— recommendation to terminate the solicitor-client
relationship where a solicitor 'knows' (a better
word would be 'suspects') his client is involved
in money laundering (s. D, para. 10);
— recommendation to cite 'conflict of interest' as the
ground for termination of the relationship (s. D,
para. 11) and withdrawal from representation
before the court (s. D, para. 12);
— reporting suspicious transactions to an authorised
officer (s. D, para. 13);
— minimum retention of records (s. D, para. 14);
and
— setting up of an anti money-laundering compli-
ance system (s. E, para. 17).
ABSENCE OF KYC PRINCIPLE
The Solicitors' Duties (s. D) constitute the essence of
the Guidance Notes. It is universally agreed among
experts that one of the key guiding principles in
detecting and combating money laundering is to
'know your customer' (KYC). Surprisingly, the
Guidance Notes do not contain any KYC principles.
It is unclear why such a fundamental principle has
been omitted from a solicitor's duties in combating
money laundering. To this extent, the Guidance
Notes would be viewed by many to be deficient. It
is hoped that the Law Society will, at its next
review, consider its inclusion in the Guidance Notes.
TERMINATION OF SOLICITOR-CLIENT
RELATIONSHIP
One of the thorny problems a solicitor is likely to face
under the Guidance Notes is the termination of his
relationship with a client over his suspicion that his
client may be drug trafficking or money laundering.
Under paragraph 10 a solicitor should consider termi-
nating the relationship. The circumstances under
which a solicitor may withdraw from representing
a client are spelt out in Rule 42(1) of the Legal
Profession (Professional Conduct) Rules 1998
(Rules). There are seven grounds5 for withdrawal
under this Rule; however, it is unclear upon which
ground a solicitor may rely. A solicitor is unlikely
to rely on Rule 42(l)(c) unless the client has an agree-
ment (written or oral) with the solicitor not to
engage in drug trafficking and money laundering.
Such a 'good conduct' agreement is virtually unheard
of in Singapore. A solicitor may not rely on Rule
42(1)(f) because the Legal Profession Act or its
Rules do not expressly prohibit a solicitor from
acting for a client under circumstance of
suspicion.6
It would appear that it is safer for a solicitor to rely
on Rule 42(l)(g) ('any other good cause exists'). It
is unclear what this paragraph means; presumably it
means any 'good reason' for a solicitor to withdraw.
Assuming the solicitor is right to rely on Rule
42(l)(g), the real problem will arise when his client
questions him on the reason for terminating their
professional relationship. The solicitor cannot dis-
close the actual reason to the client for fear of com-
mitting the offence of 'tipping off' under s. 44(1) of
the DTA. To resolve this dilemma, the Law Society
has recommended, under paragraph 11 of the Guid-
ance Notes, that the solicitor shall cite the reason of
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