Luxemburg, 26/06/2007 (Agence Europe) - According to the Court of Justice, the directive on money laundering requires lawyers to inform the competent authorities of any money laundering activities which they suspect or of which they have knowledge, when the information is received while they are providing non judicial services. In other words, the services of lawyers and notaries in financial or real estate transactions are not protected by professional confidentiality. The right to a fair trial is not, however, not infringed, since legal services, as such, are expressly covered by professional confidentiality.
In July 2004, several Belgian bar association societies brought an action in the Cour d'arbitrage (the Belgian Constitutional Court) against the national transposition of the directive on the prevention of the use of the financial system for money laundering. They considered that their clients' basic right to a fair trial was dependent on the professional confidentiality between lawyer and client, and that the above-mentioned requirements, by breaking that confidentiality, were an unjustified infringement of that right.
The Court noted that the services provided by lawyers and notaries extend well beyond legal defence and also include financial and real estate transactions, which, in most member states, require the involvement of a legal professional without this being part of legal proceedings. These were the transactions targeted by the directive, in that they were the ones most likely to involve an element of money laundering, and it could not be claimed that these activities were covered by professional confidentiality. In addition, the directive states that it does not apply as soon as there is any question of legal assistance: “There must be exemptions from any obligation to report information obtained either before, during or after judicial proceedings, or in the course of ascertaining the legal position of a client”.
The Court ruling also stated that this statement in Community law, safeguarding the right of defence, was taken up in Belgian law of 12 January 2004, in Article 14 a, §3.
Thus, from the Court's assessment and careful reading of the Belgian texts challenged, it turns out that neither Belgian legislation nor the directive from which it derives, represent an infringement of the basic rights of those subject to trial in Europe. The case has now been returned to the national court, but this ruling will allow it only to reject the Belgian bar societies' action, and to confirm the validity of the current Belgian transposition of the Community directive on money laundering. (cd)