You get a referral from another firm. What is your AML obligation?

No contact with client

A big question in relation to AML is: if you get an assignment through another firm, who is the actual client? Do you identify the referring firm, do nothing, or ask the firm to send all the info it has on the client? Well, the actual client is the one who filed the matter. If you get work sent to you, you often have no contact with that client. It is quite strange to request AML-related information from the client out of the blue. What we notice in practice is that firms ask the referring firm to provide the documents they have and leave it at that. Unfortunately, according to AML legislation, that is not enough.

You remain responsible

You are obliged to identify the client, i.e. the person for whom you write the advice or for whom you provide legal services. How do you do that if you have no contact? Requesting a copy of ID and other documents is a bit uncomfortable and perhaps even unwanted. Our advice is: send the e-mail with all the needed information to the referring law firm. From there, your contact can upload or send all the information you need for your AML check. If something is missing, he or she can ask the client for the missing information. However, as a firm, you remain responsible for completeness and timeliness. You may use the other firm's research, but you must check whether the data are correct and weigh the risks for the end client based on the services provided.

Arguments

In practice, however, we often get these arguments or excuses: 'We have a partnership with this firm, write a quick advice and forget that we also have to do AML investigations.' Or: 'But the invoice and engagement letter are in that firm's name, then that's my client, isn't it?' Unfortunately, that is the engagement party and, according to AML, not the client you are supposed to identify and screen. In practice, this happens quite often. So don't be ashamed if you do it this way too. Sometimes the AML work just doesn't really outweigh, say, the hour of work you provide or the advice you have written or given. We understand that too.
 
Nevertheless, the fact remains that you are not allowed to work for that client without an AML check. It is therefore important to be aware of this obligation and make the firms you work with aware of it. You can blame the legislation and if it is a firm based in the EU, they should have the same obligations. The more often you go through an AML process together, the smoother it will go. Always start with advance notice. State that you have to comply with AML and that you will soon ask the firm for their information. Strictly speaking, you should not start working until the AML audit is completed.

AML software

Fortunately, you can use an AML software such as RegLab. The advantage is that you do not have to request your KYC documents via e-mail, check them for completeness, and save or retype them. Thanks to the RegLab application, you send a link with the client information to the referring firm. It then uploads all the information to a secure environment. This is a very friendly and efficient way to collaborate with other firms within the AML sphere. Do you hesitate whether working with an AML software is something for your firm? Feel free to request a demo.

Only exception

There is one exception, namely if you are writing a general opinion for the referring firm. For example, on the operation of the national tax system that the referring firm wants to use for various clients. As soon as your work is not aimed at a person or entity you are allowed to refer to the firm as a client. But that is really the only exception... And an exception cannot be the standard.