WHAT ANTI-MONEY LAUNDERING EFFORTS MEAN TO EB-5 ATTORNEYS
— BY NATALIA POLUKHTIN
By working closely with their legal counsel and following strict compliance protocols , they can reduce the risk of legal issues and ensure a smoother path to U . S . residency .
use or persists in using the lawyer ’ s services to commit or further a crime or fraud .” The comments to the rule make a special reference to one illicit activity of the clients or prospective clients that may implicate the lawyers – money laundering . The comments discuss practitioners ’ obligations regarding compliance with anti-money laundering laws and regulations that would warrant mandatory withdrawal or declining representation .
The amendment to MR 1.16 reaffirms that lawyers need not report to federal regulators or law enforcement on their clients , regardless of the potential risk of money laundering activities . However , Comment 2 ( Mandatory Withdrawal ) crafts continuing risk-assessment obligation on lawyers that involves verifying a client ’ s identity , understanding the background , and assessing the source of funds to ensure that the lawyer does not inadvertently assist individuals engaged in money laundering .
To summarize , the attorney must withdraw once money laundering activities perpetrated by the client are detected . Hence , the amended rule now requires legal service providers to conduct due diligence on the client at the commencement of the representation and during the representation to timely detect the need to withdraw at signs of perpetrated or committed money laundering , making representation more labor-intensive .
Anti-Money Laundering Violations Liability in the EB-5 Process
There are multiple scenarios in preparation for the EB-5 case that may potentially require an immigration lawyer ’ s expertise in AML laws . The most obvious pattern would involve scenarios where clients usually transfer large sums of money from abroad to be placed with the investment enterprise . The EB-5 regulation excludes specifically “[ a ] ssets acquired , directly or indirectly , by unlawful means ( such as criminal activities )” from the permissible source of capital . v Under the new provisions of MR 1.16 , the representing attorney would be under the duty not only to assess the source of the client ’ s capital at commencing representation but to constantly reassess the legitimacy of the funds during the course of representation to timely withdraw should the suspicious circumstances be revealed . This requirement appears especially burdensome given lengthy adjudications of EB-5 cases , where the request for evidence may prompt the attorney to re-visit the source of funds documents several years after the case was submitted .